What the 2027 Auto Insurance Changes Mean for You
Alberta is moving to a “Care-First, Privately Delivered” auto insurance system on January 1, 2027. The goal is faster access to treatment and more predictable costs by shifting the focus from court battles to care. The new framework was announced in late 2024, with legislation advanced in March 2025 and ongoing implementation through 2026.
The short version
When it starts: January 1, 2027.
What changes most: Injured people get benefits first, without needing to sue, and coverage amounts increase materially.
Who delivers it: Private insurers (so you keep your company/choice), under government-set rules.
Why it’s happening: Cut delays and legal costs that have driven up premiums and slowed care.
What’s improving (and by how much)
Bigger medical and recovery benefits
Today, treatment dollars can run out quickly for serious injuries. Under Care-First, reasonable and necessary medical and rehab have no dollar or time cap as long as treatment provides measurable benefit. For catastrophic injuries, ancillary supports can continue for life.
Stronger income replacement
Income replacement moves from a typical maximum of $600/week for up to two years to up to 90% of net income, to a maximum tied to a gross yearly income cap and payable until age 65. Government examples cite up to $125,000/year and indexing over time. Income replacement starts after a 7-day waiting period, is indexed annually for inflation, and sits behind workplace disability programs (meaning your car insurer pays last).
Permanent impairment benefit
Where recovery isn’t possible, a lump-sum “permanent impairment” payment replaces traditional pain-and-suffering awards for most cases.
Faster timelines
The province says benefits can begin within weeks rather than months or years tied up in litigation.
Active participation required
Under Care-First, claimants have a responsibility to follow prescribed treatment plans and attend medical assessments. If someone skips treatment or assessments without a valid reason, benefits like income replacement or permanent-impairment payments can be temporarily suspended. The idea is to keep recovery on track and ensure benefits are used properly.
What stays the same (or close)
Accountability for at-fault drivers: At-fault drivers still see higher premiums. Fault still matters for rating, even if medical/rehab are handled through your own insurer.
Private delivery, consumer choice: Insurers, not a government monopoly, continue to deliver benefits, within the new rules.
Can you still sue?
Sometimes, yes. The province’s intentions paper and industry summaries indicate limited court access remains, including where the at-fault driver is convicted of serious Criminal Code or Traffic Safety Act offences, and for out-of-pocket costs beyond benefit limits. Disputes about benefit decisions are expected to go to a new Care-First Tribunal first, rather than straight to court. Details will be finalized in regulation.
Industry reporting has highlighted the same two pillars:
Two benefit categories: medical/recovery and income replacement, delivered by private insurers.
A new tribunal path plus limited right to sue for specified situations.
Some broker and industry voices support the care-first focus but flag that keeping some court access could pressure costs versus fully no-fault models.
Expect continued debate as regulations are finalized.
Will premiums drop?
The government’s thesis is that less litigation = lower system costs = more stable premiums.
Actual 2027 pricing will depend on final regulations, claim trends and how the tribunal works in practice.
Frequently asked questions
Is this the same as “no-fault”?
Functionally, it’s a care-based model that looks a lot like no-fault for injury benefits: your own insurer pays medical/rehab/income support regardless of fault. Limited court access remains for serious offences and some out-of-pocket costs.
Will my choice of insurer matter?
Yes. Benefits are privately delivered, so service, claims support and digital tools still vary by company. We’ll help you pick the right fit.
What about timelines for care?
Government materials emphasize weeks, not years, to start treatment, with unlimited medically necessary treatment if it delivers measurable benefit.
Our take
If implemented as described, Care-First significantly increases benefits and aims to reduce delays, especially for serious and catastrophic injuries. The open question is how limited court access and the new tribunal will balance fairness with cost control. We’re tracking those files closely for you.
Talk to a broker who actually reads the fine print
The province is also developing a detailed Care-First Guidebook for insurers and brokers, expected in 2026. It will outline claims workflows, best practices, and examples to help the industry adapt before launch. If you want plain-English answers and an action plan before January 2027, we’ll walk you through coverage options and what to expect as the rules finalize.