The province says lawyers take 30% to 40% of a typical injury settlement. That is the case Alberta built for Care First, and the final regulations came out this month.
Key facts
- The Government of Alberta says Alberta replaces its auto insurance system with Care First on January 1, 2027.
- Income replacement reaches $125,000 a year, permanent impairment payments reach $295,000 and the spousal death benefit reaches $600,000.
- The right to sue narrows to collisions with serious offences and to out-of-pocket expenses a policy does not cover, according to the Insurance Bureau of Canada and the province.
- The Insurance Bureau of Canada, an industry association, estimates average savings of $260 a year starting January 1, a projection no one can promise yet.
On January 1, 2027, Alberta replaces the auto insurance system rather than amending it. The new model pays benefits where the old one ran on lawsuits.
What the new rules give you
Income replacement runs up to $125,000 a year until retirement age. Permanent impairment payments reach $295,000. A spousal death benefit goes as high as $600,000. Medical treatment carries no visit cap for as long as it supports recovery, replacing a system that currently limits common injuries to roughly 10 to 21 visits.
What the new rules take away
The right to sue narrows sharply. It survives for collisions where the at-fault driver is convicted of a serious offence, including impaired driving, dangerous operation or fleeing police, and drivers can still sue to recover out-of-pocket expenses their policy does not cover. Every other claim resolves through the benefit schedule instead of a courtroom.
On the merits, that trade holds up. Litigation overhead treats nobody, so removing it is the clearest route to a lower premium that does not pretend the underlying costs disappeared.
The part still unproven
The premium itself is the piece nobody can promise yet. The Insurance Bureau of Canada estimates average savings of $260 a year starting January 1. Alberta drivers just absorbed the sharpest personal auto rate increase in the country, up 22.6% year over year in the second quarter, according to the Applied Rating Index. A projection carries no obligation, and drivers who have watched premiums climb have earned the right to be skeptical until the first renewal notices actually arrive.
Ask your broker before your next renewal notice arrives what changes on January 1, 2027, and what the new price is built on.
