Alberta auto insurance consists of mandatory and optional coverage. Drivers must have basic auto insurance, which includes accident benefits and third-party liability. They can also purchase comprehensive and collision insurance to cover damage to their own vehicle.
For more details, our team reviewed Alberta’s automobile-insurance reform page to confirm the Care-First timeline, its official automobile-insurance overview to check the current coverage framework, and the Automobile Insurance Rate Board’s 2025 Annual Market Report to review Alberta-specific premium, claims and market-participation data.
What Is Changing in Alberta Auto Insurance?
In 2024, the Government of Alberta reviewed the province’s auto insurance system and asked Albertans for feedback. Over 16,000 people participated.
The province has chosen a Care-First system, which will begin on January 1, 2027. It will provide increased medical, rehabilitation and income-support benefits while reducing the need for lawsuits.
Read More: Alberta Auto Insurance Reforms
How Does Car Insurance Work in Alberta?
Alberta requires basic automobile insurance, including accident benefits and third-party liability. Collision and comprehensive coverage are optional.
Accident benefits are available to eligible people regardless of fault. Under the current system, some injured people may also be able to make a claim against an at-fault driver.
For property damage, Alberta uses Direct Compensation for Property Damage. This generally means you claim through your own insurer for the portion of vehicle damage for which you are not at fault. Collision coverage may cover the at-fault portion if you purchased it.
What’s Wrong With the Alberta Auto Insurance System?
Alberta’s main challenge is balancing affordable premiums with claim costs, adequate benefits and continued insurer participation.
What the 2025 AIRB Report Shows
The Automobile Insurance Rate Board releases an annual report on Alberta’s auto insurance market, including premiums, claims and market participation.
Alberta paused private-passenger rate increases in 2023. A good-driver rate cap began in 2024.
For eligible drivers in 2026, the good-driver cap is 7.5%. This includes a 5% cap and a 2.5% rider for natural-disaster costs.
The AIRB report also points to rising vehicle-repair costs and bodily injury claims. These costs can make it difficult to keep premiums down while maintaining insurer participation.
What Will Change Under Care-First?
The new system will continue to hold at-fault drivers accountable through higher premiums. It will also restrict most lawsuits over collision injuries, although some exceptions will remain.
Eligible injured people will have access to increased medical, rehabilitation and income-support benefits without having to sue the at-fault driver.
Instead, people injured in a collision will file a claim with their insurance company.
The system will follow a set schedule of benefits, outlining compensation for different types of injuries and losses, such as medical expenses, rehabilitation and income replacement. The goal is to make the process faster and more predictable than the current litigation-driven model.
The effect on individual premiums will depend on factors such as driving history, coverage choices, claims and insurer pricing.