What we know about court access, dispute resolution in Alberta’s Care First insurance system

Alberta has provided new details about its proposed Care First auto insurance reform, spelling out the limited cases in which Albertans can pursue legal action, and introducing a new tribunal system allowing Albertans to dispute their auto insurers’ benefit decisions. 

The province held a media briefing Wednesday announcing the release of an intentions paper that outlines Alberta’s new Care First auto insurance system. The Care First system will come into force upon proclamation of the new Automobile Insurance Act, anticipated Jan. 1, 2027. 

The Care-First model will provide two categories of benefits: 1) comprehensive medical and recovery, and 2) income replacement. Benefits under Alberta’s Care First program will be delivered by private insurers, intended to help preserve consumer choice. 

“Alberta will be moving to a care-first auto insurance system that will provide faster, better and more accessible care,“ Alberta Minister of Finance Nate Horner said in a statement. “At-fault drivers will still face higher premiums while accident victims will have access to the best medical benefits of any insurance system in Canada.”

Horner added he expects the new model will stabilize insurance premiums when the system is fully implemented in 2027. In 2025 Q1, Alberta’s Automobile Insurance Rate Board (AIRB) reported the average annual auto insurance premium for an Alberta driver exceeded $1,700 during the first half of 2024.

“We are sharing Care-first intentions paper to help Albertans better understand how the care-first auto insurance system will work for them, their families and businesses. The intentions paper will help guide auto insurers, people in the health-care industry and other stakeholders as they prepare to transition to the care-first auto insurance system.”

Medical and recovery benefits 

Under Care First, insurers will provide comprehensive recovery support to their consumers with the goal of returning individuals to pre-accident function, or as close as possible. 

Under the Care-First system, all injured parties in an accident involving a motor vehicle with an auto insurance policy will have access to the medical and rehabilitation they require, including cyclists and pedestrians, regardless of whether they have insurance coverage. 

Medical and rehabilitation benefits will include unlimited coverage for all reasonable and necessary expenses, until maximum medical recovery (and potentially for life). If personal care is needed, the payout would be $6,781 per month for catastrophic injuries and $5,671 per month for non-catastrophic injuries. 

The paper notes the definition of a ‘catastrophic’ injury will be defined in regulations once the auto reforms are passed in legislation.

Those with a permanent impairment could receive a lump sum payment up to $298,520 for catastrophic injuries and up to $189,055 for other injuries, based on their specific nature.  

If someone has a catastrophic injury, they can receive up to $6,781 a month for personal care assistance. Non-catastrophic injuries are eligible for up to $5,671 a month. 

And if someone dies because of an accident, benefits cover funeral costs up to $10,308 and up to $4,310 per person for grief counselling. Payments can also be made to the family based on the deceased’s gross income. 

Income replacement benefits 

Income replacement benefits coverage will include 90% of net income, up to a maximum of $125,000 a year. In contrast, the current maximum benefit is $31,200 a year for two years following an accident. 

Caregivers can receive weekly payments starting at $547 for one dependant, increasing with additional dependants. 

Injured parents can also be reimbursed for childcare costs, with weekly amounts progressively increasing based on the number of children they have. 

A lump sum may also be given to injured minors or students based on their education level: Up to $6,427 for elementary school, $11,910 for high school, and $23,824 for post-secondary. 

Off-the-shelf approach 

According to the province, benefits under the new system will be set at Manitoba levels, except for the income replacement benefit, which will be based on annual income and is $5,000 higher than Manitoba to reflect Alberta’s higher average income. After the implementation of the new system, benefits will be indexed annually for inflation. 

Benefits in Alberta’s Care First system mostly reflect an off-the-shelf approach seen in other “Care-based” provinces, including B.C., Saskatchewan, Manitoba and Quebec, although the latter province has a unique approach to insuring bodily injuries. 

Government says Albertans injured in an accident will be able to access these enhanced benefits more quickly, with more certainty, and without the need to sue in court. 

But, unlike other Care-based models, Alberta’s will still include access to court in certain cases. And that has the Insurance Bureau of Canada concerned. 

Insurers can still be taken to court, tribunal 

Under Care First, injured Albertans will still be able to sue an at-fault driver in certain cases:  

• For pain and suffering where the at-fault driver is convicted of a driving or murder-related offence under the Criminal Code or convicted of impaired driving or failing to stop for a peace officer under the Traffic Safety Act. 

• For out-of-pocket expenses exceeding benefit limits provided by their auto insurance policy, which are not otherwise covered by Care-First. 

In a new wrinkle to its proposed reform, Alberta says it intends to launch a new service called the Alberta Automobile Care-First Tribunal, where Albertans can dispute benefit decisions made by their insurer. 

The Tribunal will have the ability to conduct an inquiry into the insurer’s decision, request new medical information if necessary, and undertake efforts to assist the parties to settle the matter, including mediation. 

Disputes within the Care-First model will be addressed through a comprehensive dispute management process. Government is still considering whether an applicant must pay a fee to be able to appeal to the Tribunal. 

Additional details about the dispute resolution process are expected to be spelled out in regulation. 

Government will also create two additional support functions meant to further assist “consistent insurance decisions.” These include:  

• Consumer support: Care First creates a legislative requirement for insurers to advise and to assist their customers. Government will also be creating a “consumer support function” for additional help. It will respond to consumer complaints, inquiries and provide materials to help Albertans navigate the new system. 

• Medical assessment: Care First will also establish a process for insurers to require claimants to attend expert medical assessments when recovery is not progressing as expected.  

How industry feels about court access

Government acknowledges the single largest cost driver in Alberta’s auto insurance system is litigation expenses from bodily injury claims. They specifically cite litigation expenses make up around 30% of bodily injury claim costs.

On June 17, the Automobile Insurance Rate Board released their 2025 Annual Review Notice, which found the average cost of a bodily injury claim in 2024 was almost $180,000 — far more than the average claim amount ($8,300 in 2024) for property damage.

In contrast, the average cost of a bodily injury cost was just over $91,000 in 2020. This represents a growth of over 96% in five years. (In the same period, average property damage claims were estimated at $6,000 — a 40% growth in five years.)

“Reducing litigation is the only real way to lower bodily injury claims costs, and to stabilize the price that Albertans pay for their auto insurance while improving accident benefits,” the Wednesday intentions paper reads. 

However, the industry is concerned court access under the new Care First model could continue to drive up excessive claims costs. 

The Insurance Brokers Association of Alberta published a statement in July, before the intentions paper was released. “In light of the fact that costly court access remains a feature under the new system,” the statement reads, “IBAA is concerned that Alberta will end up having the most expensive care-based model of any jurisdiction in Canada. 

“We strongly recommend adoption of reforms that focus on care, while improving premiums cost and accessibility for consumers whether or not they are involved in collisions.”