CALGARY -- The Alberta government has introduced Bill 41 Thursday, proposing changes to the auto insurance industry the province says will make it more affordable and fair for consumers. 

If passed, the bill will change the definition of a ‘minor injury’ to include more conditions and will allow insurance companies to offer a pay-per-kilometre policy option to Albertans who don’t drive often. 

“Sprains, strains and whiplash, not resulting in serious impairment, constitute a minor injury under the current definition,” says Finance Minister Travis Toews. 

“We’re broadening that definition to include ‘conditions arising’ from sprains, strains and whiplash that do not result in serious impairment.”

But Toews describes the proposed changes in Bill 41 as “interim measures” and a committee tasked with examining the province’s auto insurance regulations recommends an overhaul of the system, including moving Alberta to no-fault insurance. 

No-fault insurance is when both insurance companies pay damages in collisions where multiple drivers are involved, regardless of who caused the crash. Alberta currently operates on an at-fault system in which the insurance company for the driver deemed at-fault pays damages.

“The committee recommends the replacement of the existing system with a pure no-fault accident care and compensation model,” says Shelley Miller, a member of the Automobile Insurance Advisory Committee.

The government plans to launch even more public engagement on the matter, putting the committee’s 536-page report to Albertans to allow for feedback before making a final decision. Toews says a decision on future changes could come in the middle of 2021. 

The advocacy group FAIR Alberta, which is made up of lawyers, medical professionals and consumers, has been critical of proposed changes to minor injury regulations and the idea of Alberta changing to an at-fault system. 

“Alberta’s insurance system should not be designed to protect industry profits at the expense of consumers,” the group’s website reads.

“When someone is injured in an accident, they deserve to have their rights protected and to hold bad drivers and insurance companies accountable through the court system.”


The finance minister says the cost of insurance should go down by an average of $120 per year for Albertans. The news of proposed savings comes as auto insurance premiums soar in the province.

According to a new report from Lowest Rates, the average monthly cost of Alberta car insurance is up 24 per cent from the beginning of 2019 to the second quarter of 2020. 

New data from the Insurance Bureau of Canada also places Alberta as having the third-highest average rate of insurance premiums with an average yearly premium of $1,316. British Columbia and Ontario rank first as both have seen yearly increases of $300 since 2015.

The Alberta insurance industry has warned repeatedly that sharply rising payouts in recent years had put it in a financial squeeze. Those problems were exacerbated when a five per cent ceiling on rate hikes was imposed by the former NDP government two years ago.

The UCP lifted that cap in August of 2019, stating that the previous model just wasn't working because some Albertans weren’t able to access certain non-mandatory coverages or payment plans. The move granted 27 insurers in the province the ability to implement rate hikes, ranging from one per cent all the way up to 30 per cent according to the Automobile Insurance Rate Board.