MNP report raises concerns about cost of retaining litigation in new Care-First model

In November 2024, the Alberta government announced that it will transition the province to a Care-First auto insurance model effective 2027. While based on other care-based systems in Canada, Alberta’s new model will differ in a fundamental way – it intends to maintain the ability to sue at-fault drivers convicted of certain criminal code or traffic safety act offences, and to recover economic losses and out-of-pocket expenses above the coverage amounts.

To better understand the implication this will have for driver premiums, Insurance Bureau of Canada (IBC) commissioned MNP to explore the expected cost impact of litigation in the new model.

MNP has found:

• The estimated cost of tort-access (the ability to sue) as proposed in the new model could add as much as $218 annually to driver premiums in Alberta.
• Limiting the ability to sue to a select set of Criminal Code and Traffic Safety Act provisions, as well as for economic losses above the coverage limits, is still estimated to increase premiums by $136 annually per driver.

Several Alberta insurers have done their own cost estimates which suggest the premium impact to drivers may be much higher than MNP has estimated.

As the government moves toward its Care-First model, IBC has made it clear that court access in the new system will jeopardize both the premium savings promised to Alberta drivers and the long-term viability of the new Care-First model itself.

Learn more and read the report here.