A new report from consulting firm MNP warns that Alberta’s plan to retain a limited right to sue in its proposed Care-First auto insurance system could cost drivers up to $136 more annually.The report, commissioned by the Insurance Bureau of Canada (IBC), suggests that allowing lawsuits for certain driving offences or out-of-pocket expenses will significantly drive up premiums, threatening the province’s promise of a more affordable insurance model. The Care-First system, which is expected to launch in 18 months, is intended to move Alberta toward a care-based model that prioritizes medical support over litigation..“Litigation in Alberta’s auto insurance system creates significant costs for Alberta drivers,” said Aaron Sutherland, IBC’s vice-president for Pacific and Western Canada. “No other province with a care-based system permits the ability to sue as envisioned in Alberta because of the significant costs it adds for drivers, while doing nothing to improve care for those injured in collisions.”Under the proposed framework, injured drivers would still be able to sue if the at-fault driver committed specific Criminal Code or Traffic Safety Act violations, or to recover certain costs not covered by insurance. According to IBC, this deviation from other care-based models puts the success of Alberta’s Care-First system in jeopardy..The report comes as Alberta’s auto insurance market faces intense pressure. Legal costs are rising by 9.7%, accident benefit costs by 11.9%, and vehicle damage claims by more than 15%, according to recent data from the province’s Automobile Insurance Rate Board (AIRB). Insurers are also losing 20 cents on every dollar of premiums due to a 7.5% rate cap imposed by the government, further straining the system.“The Alberta government is trying to deliver significant savings under the new system, but current auto insurance rates are under tremendous pressure,” said Sutherland. “A significant course correction is needed.”IBC is urging the province to drop the proposed tort access in order to stabilize premiums and focus on improving care for injured drivers.
