May 21, 2025 — The Alberta government has passed legislation to implement a new auto insurance system designed to provide better and faster access to care for those injured in vehicle collisions.

Bill 47, the Automobile Insurance Act, received royal assent in the Alberta legislature on May 15.

The new system will limit lawsuits to cases  where the at- fault driver is convicted of a serious offence. Injured individuals will still be able to sue for out- of-pocket expenses that exceed policy limits.

The government says the change will reduce costly litigation and help lower auto insurance rates over time.

With the legislation now passed, Alberta will move forward with introducing what the province says will be Canada’s most comprehensive benefits system for medical care and rehabilitation following a collision.

The new system includes income support and retirement benefits for those unable to work or attend school due to injuries, permanent impairment benefits for those severely injured, and death benefits for families of those killed in crashes.

An independent Automobile Care-First Tribunal will be established to resolve disputes between Albertans and insurers.

The government will continue consulting with the healthcare and insurance sectors as it drafts the regulations, which are expected this fall.

The new Care-First system will take effect on Jan. 1, 2027.

Aaron Sutherland, the Insurance Bureau of Canada’s Pacific and Western VP, said that for the system to be successful and deliver savings to Alberta drivers, the government will need to strike a balance between the benefits provided to those injured in collisions and the amount of litigation that remains in the system.

“To ensure long-lasting affordability, the government must remain steadfast in eliminating the sky-high legal costs plaguing the current system,” he said in a press release last week.

“Fixing the challenges in the current system will be critical to the success of the new auto insurance model.”

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