Alberta eyes auto insurance overhaul; no-fault model likely

Alberta’s government is poised to overhaul the province’s auto insurance system, with a no-fault model emerging as the most likely, offered to counter rising premiums.

Finance Minister Nate Horner expressed concerns about the current system, saying it is not working for either consumers or insurers right now.

“The system is in peril right now. Changes will have to be made,” Horner said.

Horner confirms changes to Alberta’s insurance system will be announced Thursday.

A no-fault system would shift the focus from assigning blame to providing compensation for injuries and property damage, regardless of who caused the accident.

Proponents like Jonathan Brown, former president of the Insurance Brokers Association of Alberta, argue this would streamline claims and potentially lower costs.

“Everyone can access care and benefit at the same level, regardless of who's at fault in the accident,” said Brown.

“We want to see better rates, if not cheaper than, at least not continuing to climb.”

Critics worry about reduced compensation for serious injuries and the loss of the ability to sue for damages.

FAIR Alberta is a collective of injury lawyers, medical professionals and consumer rights advocates that opposes a move to no-fault insurance.

“Private insurers would be deciding whether you get treatment or not,” said Jackie Halpern, an injury lawyer and member of Fair Alberta.

“With no recourse to go after them if they cut you off, that’s it. You’re done.”

Nicole Obermajer, a crash victim who suffered a brain injury in 2017, says had it not been for the help of a lawyer fighting on her behalf, she would not have received the treatment she needed to recover.

“After 16 treatments, my insurance company cut me off,” said Obermajer. “So, the only way I could get better and the only way I could move forward with my life was to call a lawyer.”

While a no-fault system could theoretically lead to lower premiums, the province is also considering lifting or raising the current 3.7 per cent rate cap, which could result in steep short-term increases.

Alberta NDP Leader Naheed Nenshi says the only winners will be insurance companies.

“You’ll be paying exactly what you are paying today or more four years from now, and you won’t have the ability to sue. It’s a terrible, terrible outcome,” he said.

Nenshi advocates for a move to a public insurance system, similar to what is in place in neighbouring British Columbia and Saskatchewan, where insurance rates are substantially lower than Alberta.

Alberta Premier Danielle Smith has repeatedly said a public insurance model is not on the table.

Horner maintains that the goal of his upcoming changes is to ultimately reduce rates for Albertans, who currently pay the highest auto insurance premiums in Canada.