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Will Alberta Expand Its No-Fault Auto Insurance System?

March 17, 2020
4 mins
Professional couple in grey vehicle

The Insurance Brokers Association of Alberta (IBAA) is recommending Alberta’s government expand its no-fault insurance system to find more affordable and sustainable auto insurance for Albertans.

The IBAA published a white paper in early March entitled, “The Framework: Fixing the Alberta Auto Insurance System”. In the document, the IBAA says the current state of auto insurance in Alberta “has serious deficiencies that have led to an unsustainable system for the insurance industry, and ultimately, the Alberta consumer.”

The IBAA paper states consumers deserve more choice in benefit plans based on social and financial circumstances. It highlights the increasing costs of vehicle repair due to onboard technology as being beyond control, which will get more expensive over time once driverless vehicles are on the road. To that end, the IBAA recommends the government focuses on controlling areas it can, such as moving to a no-fault system for physical damage to vehicles.

Alberta has no-fault provisions in its regimen, but the system is primarily tort-based. The IBAA proposes the cost of repairing a damaged vehicle be covered by the company insuring it, and eliminating all costs associated with recovery and investigation where liability is an issue, or the other party is unknown.

Clamp Down on Distracted Driving

In all, the IBAA white paper makes 20 recommendations. The association also encourages the provincial government to:

  • Implement higher penalties for distracted driving offences. Distracted driving is among the most serious threats to road safety across the country. Alberta Government data states 23,546 Albertans were convicted of distracted driving between 2014- 2018. In Alberta, if you are convicted of distracted driving, you face a $287 fine and three demerit points on your licence presently. The IBAA recommends stiffer fines and penalties, especially for repeat offenders, and recording statistics for accidents where distracted driving was a factor.
  • Expand and standardize territories. Establish criteria that accurately reflect a drivers’ risk exposure by properly representing the distinction between the exposure faced by metropolitan, urban, and rural areas to eliminate rating disparity. For instance, a motorist living and driving in Edmonton or Calgary faces a greater chance of getting into a collision than someone in a rural town like Galahad where the population is only 119. They should not be paying the same premium.
  • Disallow cash settlements for unresolved injuries. Integrate and coordinate ongoing medical treatment with a driver’s Accident Benefits portion of their policy, and ensure ongoing medical treatments are based on impartial medical advice as a mandatory part of any settlement.
  • Launch an awareness program to cut down on vehicle theft. Statistics suggest Alberta has the second-highest rate of auto theft in Canada. The Insurance Bureau of Canada data shows 24,800 vehicles were stolen in the province in 2017, with Calgary holding the dubious honour of leading the country among cities with the highest number of vehicles stolen. Police estimate that 25% of these thefts are the result of drivers getting out of their vehicles but leaving them idling with the keys in the ignition.
  • Up the use of technology in vehicles to assess risk. Usage-based insurance (UBI) and dash-cams, for example, can help with loss prevention and identifying drivers’ habits behind the wheel to assess risk more effectively – a measure squarely aimed at lowering premiums and offering consumers incentives to drive defensively.

What Is Influencing the Cost of Car Insurance in Alberta?

There are several factors influencing the cost of auto insurance in Alberta. These range from the cost of repairing vehicle damages to fighting insurance fraud. When the Automobile Insurance Rate Board permitted 20 insurers to hike their rates in January 2020, it was responding to the industry’s need to try to keep pace with the factors driving costs up.

What’s Next for Car Insurance in Alberta?

An auto advisory committee appointed by Alberta’s provincial government is exploring options for a fair, affordable, and sustainable car insurance system for Albertans through a private-sector delivery model. Part of the committee’s research included launching an online survey for Albertans to participate in up until March 6.

It is possible the committee will recommend expanding the province’s no-fault insurance coverage. This is a system which limits the conditions under which an injured person can sue an at-fault driver for pain and suffering stemming from a crash. The committee delivers its recommendations to the government in June.


The RATESDOTCA editorial team are experienced writers focused on sharing stories and bringing you the latest news in insurance and personal finance. Our goal is to provide Canadians with the information and resources they need to make better insurance and financial decisions.

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