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How Alberta’s Care-First 2027 auto reforms open door to shopping for better rates
For the first time insurers will price risk individually and variations in car insurance rates become more visible under Alberta’s new Care-First system when auto reforms take effect Jan. 2027. Consumers have a unique opportunity to shop around and compare competitive options in the market.
Alberta’s independent auto insurance regulator forecasts average premium savings of nearly -$300 or -13.7% under the Care-First package of benefits it has modelled. But premium impacts aren’t a one-size fits all. For Alberta’s 3.1 million insured private passenger vehicles (PPV), the Automobile Insurance Rate Board (AIRB) predicts a wide of range of potential premium adjustments: average annual savings as high as -$860 to increases of nearly +$1,450.
Drivers who face higher rates with one insurer can shop around for better quotes from other providers, encouraging competition in the market, AIRB’s Care-First consumer impact report notes. Alberta’s previous grid rating system capped prices insurers could charge for mandatory auto insurance coverage. Low-risk experienced drivers had been subsidizing high-risk motorists.
From Jan. 1, 2027, auto insurance in Alberta is poised to become more customizable: defined by insurer-specific rating programs, vehicle characteristics, coverage selections, driving history, and other risk factors.
Why Alberta is shifting to Care-First reforms
Care-First reforms are a product of provincial passenger vehicle insurance premiums that rose approximately 57% over 10 years, to $1,817 in 2024 from $1,153 in 2015. To address affordability concerns, the Alberta Government capped insurance rates which resulted in premium inadequacies for insurers to cover claims losses, expenses, and profit.
Resultant market instability combined with high costs of litigation via the grid tort-based system of suing for accident compensation led to several insurance firms phasing out of the Alberta Market.
AIRB commissioned an independent actuarial analysis firm to estimate expected claims costs under the new Care-First system. The Costing Report was also informed by an Actuarial Advisory Committee.
At the end of June 2025, the Costing Report notes industry weighted-average premiums in Alberta were $1,848. But their analysis estimates that average premiums would need to increase 26% to achieve rate adequacy. For 2027, the industry-weighted average premium under the current tort product would require to spike as high as $2,945 to cover underlying claims costs.
What base rates AIRB used to calculate revised rate forecasts?
Based on the Costing Report recommendations, here are AIRB’s benchmarks that reflect average premiums required to cover expected costs of Care-First's benefit structure for various vehicle segments:
Coverage category | Private passenger | Commercial | Motorist |
|---|---|---|---|
Bodily injury | $70.84 | $222.07 | $30.27 |
Accident benefits | $606.62 | $394.25 | $637.66 |
Underinsured motorist | $0.64 | $2.28 | $6.43 |
Source: AIRB’s Care-First Consumer Premium Impact Report 2026
How much does AIRB expect premiums to change under Care-First coverage?
AIRB estimates average premium changes would be different for various vehicle classes. Their estimates are based on updated rate plans that provincial insurers filed for AIRB to review and approve. Insurers set those new rates at or below benchmarks from AIRB’s Care-First Actuarial Costing Report and Bulletin of April 2026.
Based on approved filings collected from insurers, AIRB projects the following premium adjustments in each vehicle class, ranked by dollar amounts of estimated rate changes:
Vehicle class | Estimated rate change ($) | Estimated rate change (%) |
|---|---|---|
Taxis & limousines | -$621 | -13.7% |
Private passenger | -$297 | -13.7% |
Motorhomes | -$102 | -14.8% |
All-terrain & off-road | -$62 | -24.2% |
Commercial & interurban | -$56 | -3.1% |
Trailers & utility trailers | -$11 | -4.7% |
Snow vehicles | +$33 | +12.5% |
Antique & collector | +$41 | +10.7% |
Motorcycles & mopeds | +$445 | +100.1% |
Service & public | +$446 | +59.9% |
Source: AIRB’s Care-First Consumer Premium Impact Report 2026
How are estimated premium savings distributed across Alberta’s PPVs?
Premium savings are expected to be broadly distributed across Alberta drivers based on updated rate plans that 34 insurers submitted to AIRB for 3.1 million insured vehicles. AIRB expects premium decreases for 88.2% of insured PPVs.
The largest group of about 720,000 vehicles could expect average premium reductions between 10–15%. Average rates could drop 5.1–10% in the second major set of 604,000 vehicles. Savings could be as high as nearly -$860 for over 551,000 PPVs, AIRB’s report shows.
On the flip side, AIRB expects premiums to rise for 9.8% of PPVs. As a result, some drivers who were previously capped by the province’s grid rating system, may have to pay up more for coverage under Care-First.
A group of about 17,250 vehicles are expected to face the highest average premium increase of nearly +$1,450. AIRB forecasts only a small proportion, or about 24,120 vehicles, could potentially face average premium increases of +$372.
More than 62,630 Alberta drivers can expect no change to their insurance rates, according to AIRB estimates.
Are forecast premium savings guaranteed after Alberta's auto reforms take effect?
Even as AIRB’s average premium reductions of -13.7% or -$297 align with Insurance Bureau of Canada (IBC) messaging, these estimates can't be verified yet, cautions David Mayer, Rates.ca Director of Insurance and Underwriting.
“The Costing Report does mention there is significant uncertainty in pricing a new product with no claims experience, and its assumptions include ‘a prudent level of conservatism’,” he says.
“Expect the [AIRB premium changes] estimates to be reasonable but unproven.”
Customers can look forward to renewal notices priced under Care-First to start going out Nov. 1.
Is there risk of rate increases once actual claim data starts to flow in?
It’s possible for insurance rates to increase with incoming claim data under Alberta’s new benefit structure. But Mayer expects near-term room for increases to be limited. “The Costing Report says transition and adaptation costs can’t be reasonably estimated and weren’t included,” he notes.
AIRB has stopped accepting new filings that raise premiums until updated guidelines arrive by year-end. The report also projects that collision and comprehensive premiums will rise as insurers correct current rate inadequacy, Mayer says.
“Whether increases follow once the freeze lifts is a forecast, not a fact.”
The independent analysis cautions that projected savings relative to an insured driver's 2026 premiums would differ. Individuals would experience different levels of savings based on their "risk characteristics and renewal timing".
Given AIRB’s Costing Report estimates were derived without underlying claims data, there could be discrepancies in some assumptions. To track performance, Mayer says the AIRB is adding new claim data fields to their statistical plan starting Jan. 1, 2027.
Which group of drivers could face premium increases in 2027?
Some drivers whose rates Alberta’s grid rating system previously capped may face higher premiums, as they would now pay their insurer’s own rate, Mayer says. Individual factors such as insurer, driving record, and coverage would still apply.
Drivers who are expected to have higher medical costs than they might cause, and high-risk drivers who are also significantly subsidized by the grid, could face premium increases above $500, AIRB notes in the report.
“Every insurer repriced at once against the same benchmarks under Care-First, and removing the grid makes price differences between insurers visible,” Mayer explains. Drivers who could face premium increases in 2027 should shop around for better rates and obtain quotes from other insurers.
Learn more: Alberta drivers can compare car insurance rates online
What are main differences between Care-First and Alberta’s grid rating system?
Alberta’s grid system capped premiums and allowed fault-based lawsuits for most injuries, while Care-First prices risk individually. The province's new model shifts focus from litigation to unlimited medical care and income support regardless of fault.
Policy area | Grid system (current) | Care-First system (Jan. 1, 2027) |
|---|---|---|
Rate setting | Caps maximum premiums based on driving record and years of experience | Insurers price risk more individually, rates based on AIRB benchmarks |
Fault model | Fault-based; not-at-fault drivers can sue in most circumstances | No-fault for most injuries; right to sue limited to serious criminal offences (e.g. impaired driving, dangerous driving) |
Medical coverage: common injuries | Up to $50,000 for up to two years | Unlimited treatment as long as it supports recovery |
Medical coverage: serious injuries | Must sue at-fault driver for additional treatment beyond approved limits | Unlimited treatment for life if needed; no maximum or time limit |
Income replacement | Lesser of $600/week or 80% of gross earnings, for up to two years | 90% of net income up to gross annual income of $125,000; additional coverage available for purchase |
Permanent impairment benefit | None | Catastrophic injuries: Up to $298,520 |
Claim resolution | Legal claims can take months or years | Treatment and benefits begin within weeks; disputes handled by new Care-First Tribunal |
Pain and suffering damages | Maximum $6,061 for minor injuries; higher through courts for serious injuries | No pain and suffering for most injuries; out-of-pocket expenses claimable |
Benefit indexing | Not indexed for inflation | Adjusted annually for inflation |
Source: A comparison of accident benefits in Alberta
When reforms take effect, Care-First benefits will become the baseline on every policy, and only higher-limit top-ups will be optional, Mayer explains. Furthermore, he says, lawsuits would be barred for bodily injury and benefit disputes handled by a new Care-First Tribunal rather than the courts.
In AIRB’s view, the province’s new auto insurance pricing model emphasizes “treatment, recovery, and standardized injury benefits over litigation-focused compensation”.
Read more: Will an at-fault collision always increase my car insurance premiums?
What should drivers do to prepare for Jan. 1 reform rollout?
All policies automatically switch to Care-First on Jan. 1, 2027, so no immediate action is required, Mayer says.
“Drivers should wait for their renewal notice with Care-First pricing, then compare quotes rather than cancel early on a guess they will go down.”
Anyone who renewed early should ask their insurer, he says, about moving to the new Care-First pricing without a penalty.
He advises those drivers who think the grid was capping them to check rates in the market first. The province's à la carte insurance marketplace will be open for business as early as Nov. 1, 2027, when insurers post first renewal notices.
Frequently asked questions (FAQ)
Will auto insurance rates increase or decrease after Care-First reforms in 2027?
Alberta's insurance regulator AIRB expects average annual premium reductions of -13.7% or -$297. It forecasts premium decreases for 88.2% of insured passenger vehicle drivers and increases for 9.8%.
What to do if you face a significant premium increase next year?
Drivers who could face premium increases in 2027 based on their vehicle class and type, driving history, and other individual risk factors should shop around for better rates and compare quotes from other providers. As insurance rates are no longer capped in Alberta, for the first time insurers will price risk individually and variations in car insurance rates become more visible.
Will current policies automatically switch to Care-First?
Yes. All policies automatically switch to Care-First on Jan. 1, 2027. Renewal notices priced under Care-First start going out Nov. 1.
What should Alberta drivers do before Jan. 1, 2027 auto reforms?
Alberta drivers should look out for car insurance renewal notices priced under Care-First from Nov. 1 and compare rates with other providers. Anyone who renewed early should ask their insurer, about moving to the new Care-First pricing without a penalty, recommends David Mayer, Rates.ca Director of Insurance and Underwriting.
Can drivers still sue if injured in a car accident under Care-First?
If injured in a car accident under Care-First coverage, your right to sue is limited to serious criminal offences such as dangerous operation of a vehicle, drunk driving or fleeing law enforcement. Care-First provides unlimited treatment that supports recovery under a no-fault model for most injuries.
Save on Alberta auto insurance
Standard car insurance policies are one year long. If your renewal date is approaching, remember that comparing car insurance rates is the best way to save money you never know how much you'll save until you comparison shop. Another great time to look for a new car insurance policy is when you buy a new vehicle or move to a new neighbourhood.
To make sure you're getting the most competitive rates, compare Alberta car insurance quotes today!
Joan Pinto
Joan Pinto, Managing Editor
Joan Pinto is a Managing Editor at Rates.ca. She is a seasoned publisher with over 15 years of experience managing and developing multi-asset financial markets content across platforms at leading Canadian banks. As a financial research analyst with a cross-asset strategy team, she specialized in energy markets. She also worked as a journalist/regional editor covering the volatile global environmental policy landscape for three years.
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