Alberta drivers paid an average of $1,903 for auto insurance last year as premiums climbed 8.7%, while insurers lost money selling coverage in the province, according to a new regulatory report.The Automobile Insurance Rate Board (AIRB), the independent agency responsible for overseeing and approving auto insurance rates in Alberta, released its 2026 Market and Trends Report last week outlining the state of the province's insurance market.The report found average premiums increased from 2024 levels while third-party liability costs, largely associated with legal and litigation expenses, accounted for 58.2% of premiums paid by drivers.The Insurance Bureau of Canada (IBC) said the findings demonstrate problems with Alberta's existing insurance model and bolster the case for the province's planned Care-First system.“The AIRB’s 2026 Market and Trends Report reinforces what drivers already know: Alberta’s auto insurance system is broken, as the availability and affordability of coverage continues to decline,” said Aaron Sutherland, IBC vice-president for Western and Pacific Canada.Sutherland said the combination of an 8.7% premium increase and continuing losses for insurers shows the government's planned changes cannot arrive soon enough.“Not everybody is feeling the financial pain, however,” he said. “As in previous years, the AIRB’s report highlights that legal costs remain the most significant cost pressure underlying drivers’ premiums and trial lawyers continue to play a costly role in the current system.”IBC maintains the Care-First model will reduce legal costs and what it describes as lawsuit abuse, potentially saving drivers hundreds of dollars annually while increasing benefits available to people injured in collisions.The AIRB report also found comprehensive vehicle damage claims, which are often linked to severe weather such as hailstorms, declined year-over-year.However, inflation has pushed the cost of repairing vehicles for those claims up by approximately 27% in recent years.Vehicle theft costs remained comparatively stable at $39.50 per policy.Despite higher premiums, insurers lost nine cents for every dollar of auto insurance coverage sold in Alberta in 2025, according to the report..Data from MSA Research, an insurance industry analytical research firm, shows insurers lost money selling auto insurance in Alberta every year from 2013 through 2024 except 2021 and 2022.Those two profitable years coincided with a sharp decline in insurance claims during the COVID-19 pandemic.Alberta's Care-First system is intended to shift the emphasis from litigation to medical treatment, rehabilitation and recovery benefits for people injured in vehicle collisions.
