June 4, 2026 — The Alberta government is adjusting its cap on auto insurance premium rate increases, extending it to more drivers as the province moves to the new ‘Care First’ no-fault model.

As of Jan. 1, insurers will not be able to raise their average overall rates by more than 5%, and all individual drivers will see their renewal premium increases capped at 10%.

The updated approach will replace the current ‘Good Driver Rate Cap,’ which limits increases for eligible drivers to 7.5% — including a 5% rate hike cap and a 2.5% allowance for natural disaster costs.

The new Care First system is designed to lower costs by restricting lawsuits and to provide faster, enhanced medical benefits to injured drivers.

The government cited an analysis by consulting firm Oliver Wyman that estimated drivers with basic coverage will save an average of $366 per vehicle under the new system.

The province said drivers with at-fault accidents or relevant convictions will continue to face higher premiums.

Meanwhile, Alberta’s Automobile Insurance Rate Board is requiring insurers to include specific wording in renewal communications as the province repeals its grid rating system as part of the move to the new model.

In a bulletin to insurers last week, the AIRB said all renewal notices must include an explanation of premium changes linked to Care First and the end of grid rating.

The board said insurers must use prescribed language, without alteration, describing the new system and its expected effects, including faster access to benefits, continued accountability for at-fault drivers and greater premium stability.

For policyholders whose premiums increase after having been grid-rated in 2026, insurers must also include separate prescribed language explaining that the grid had capped premiums for inexperienced drivers but, over time, had also subsidized some experienced drivers with poor driving or claims records.

After the grid is repealed, premiums will be based solely on each insurer’s rating program.

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