The Alberta government introduced a no-fault auto insurance system, effective at the beginning of 2027, which advocates say could leave victims in vulnerable positions, something Premier Danielle Smith had once opposed in 2003.Smith wrote an opinion article for the Calgary Herald in 2003, noting that protecting injured people’s rights should come first, while criticizing a government's plan to fix the province’s car insurance system. At the time, then-finance minister Pat Nelson and co-chair Jack Donahue suggested putting a $4,000 cap on payments for pain and suffering for people who have minor injuries from car accidents. That means if you get hurt but your injury isn’t considered "major," the most you could get for pain and suffering is $4,000.Smith criticized the plan, saying instead of capping payouts to injury victims, the government should either let the new insurance system run without cuts, even if it means slightly higher premiums (about $120 more per year), or find better ways to save money that don’t hurt accident victims.Advocates say "the minor injury cap is a bit different than no-fault, but what she took issue with remains the same." They say the newly introduced Care-First Auto Insurance model could take away victims’ rights, leaving them in vulnerable positions and putting an extra strain on the health-care system..Advocates say a no-fault insurance model in Alberta could take away victims’ rights, put a strain on the healthcare system.The new system will provide unlimited treatment coverage for victims for life, but bar victims of accidents from suing for damages, such as pain and suffering, an associate lawyer at Crash Lawyers, Tyler Van Vliet, told the Western Standard.“The way it works right now is: If you get hurt in a car accident, you get treatment coverage from your own insurance for up to two years after the car accident, and then once we hit that two-year mark, you're suing the at-fault insurance company — the insurance company for the driver who caused the accident — to make sure that you have the cost of your future medical expenses as well as compensation for any lost income, loss of ability to do housekeeping chores around your house, and the pain and suffering that you've dealt with along the way,” Van Vliet explained.“The way it works under the new system is that once you're hurt in a car accident, you'll have what they're saying is unlimited treatment for life, but then no ability to sue for those other financial aspects. You'll get your treatment covered, but you won't be able to sue for your pain and suffering and things of that nature. So essentially, you're extending the treatment side of things from your coverage, but you're not being made whole financially for the impact of the accident.”Insurance companies cut victims off treatment "all of the time, even before they get better," added van Vliet.According to van Vliet, the new system is going to be similar to the Workers' Compensation Board (WCB), where victims who lose the ability to work would be getting part of their lost income, but not all of it.When asked about the percentage of the lost income that will be covered, he said insurance companies will have the sole power to decide. The current system, on the other hand, allows victims to sue insurance companies and get their lost income covered in full..Alberta brokers, IBC urging government to remove rate cap, citing high premiums leaving drivers uninsured.In an email to the Western Standard, the premier’s office said the opinion piece was written 22 years ago, noting that “a lot can change over two decades.”The email referred us to a news conference held in November 2024, where Smith was asked by reporters about the new insurance model. Smith defended the new no-fault system by saying it promises more generous payouts and rate reductions.“One of my understandings is that 20% of the cost of payouts right now is the cost of litigation, and so we believe that not only by making everyone have the same benefits payout across the board, that we'll be able to give those more generous payouts, but it will also allow us to deliver the rebates by taking out that additional 20% cost,” she said.But van Vliet said: "If litigation is solely responsible for the high cost of premiums, how does removing litigation from the system lead to even higher costs? Insurance companies are already incentivized to end treatment early – the Alberta Government is just removing the only check and balance that remains in the system while premiums continue to rise."Van Vliet added that: "The Insurance Bureau of Canada (IBC) has already stated that auto insurance premiums could increase for Albertans under care first rather than decrease..‘Price controls create shortages’: Albertans feeling the pinch as some insurers pull out, rates increase.According to van Vliet, the government's auto insurance reform includes a rate cap. The rate cap, now in its third year, states that insurance premiums will increase by 7.5% each year when the policy is up for renewal, before they go back to the 2024 levels at the beginning of 2027, when the Care-First Auto Insurance model takes effect, according to van Vliet.The Insurance Brokers Association of Alberta (IBAA) and the IBC note that more drivers are now finding it difficult to get affordable auto insurance coverage, citing the rate cap.When asked about the high rates, the office of the Ministry of Treasury Board and Finance said in a statement:"Alberta is implementing a Care-First Auto Insurance system that will deliver better, faster, and cheaper care for Alberta drivers."Until that system is implemented, the rate cap will keep rates from increasing too rapidly."
