Alberta Proposes No-Fault Auto Insurance System with Rate Hikes

The changes, set to take effect in 2027, aim to reduce litigation costs and lower premiums but include annual rate increases for drivers starting in January.

• Alberta plans to transition to a predominantly no-fault auto insurance system by 2027, where insurers will provide compensation at government-set rates, limiting most victims' ability to sue at-fault drivers.
• The government estimates the new system could save drivers up to $400 annually on insurance premiums by reducing litigation costs.
• Starting January, insurers will be allowed to raise rates for good drivers by up to 7.5% annually, more than double the current cap of 3.7%, to address rising costs and natural disaster impacts.
• Victims will still be able to sue at-fault drivers in cases involving criminal offenses, such as impaired or dangerous driving, or for out-of-pocket expenses exceeding standard benefits.
• The shift away from the current system could lead to the loss of 650–800 legal support jobs, and critics argue it will result in higher premiums for Albertans in the short term.

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