Starting January 1, 2027, injured drivers will no longer be able to sue the at-fault party and will instead navigate a new no-fault, 'care-first' system. Here's what you need to know before the law takes effect.
The Government of Alberta passed the Automobile Insurance Act (the "Act") (formerly known as Bill 47) on May 15, 2025. The Act aims to implement a "care-first" system with a move towards a no-fault model.
The Act does not take effect until January 1, 2027. What that means is any claims that arise between now and December 31, 2026, are not impacted. Any ongoing claims that have already been started will also not be affected.
What is no-fault insurance?
The no-fault system [hyperlink "no-fault system" to previous blog of "what is no-fault"] moves from the previous tort insurance system where the driver deemed at fault in a crash was completely liable and the other driver was able to sue for damages to their car, medical care, and replacement income if they were unable to work as they did prior to the crash as a result of their crash-related injuries.
A no-fault system doesn't mean you aren't at fault. It just means that you only deal with your own insurer who will determine fault for insurance purposes. If your insurance deems you were partially to blame, they may reimburse you for the portion of the claim that you were not at fault for.
Why the change to no fault?
The Act establishes the benefits that Albertan drivers may be entitled to if they are injured in a crash, how to appeal decisions their insurance makes regarding their care and treatment, and under what rare conditions they can sue the at-fault driver.
The justification for taking away injured Albertans' ability to sue at-fault parties is to shift the focus away from a potentially lengthy legal process and high litigation costs that insurance agencies largely paid, towards supporting all injured parties in a crash.
While getting immediate medical treatment and potential replacement income support is good in theory, the reality is that injured individuals are left to deal with their insurance agencies on their own and must jump through any hoops that are put in front of them to receive benefits.
Rather than having a lawyer help and push for a larger, one time, settlement figure, injured individuals are left with having to deal with insurance adjusters, who hold all the power regarding how long they will continue to have benefits paid, themselves. Insurers may require regularly updated treatment plans from medical treaters to show that the treatment is indeed helping.
In short, rather than have a lawyer work for you and removing any ongoing responsibility or communication with the insurers after a matter concludes, you are left to deal with them directly on an ongoing basis for as long as you require treatment.
When do the changes come into effect?
All motor vehicle accidents that occur starting January 1, 2027, will be dealt with under the Act.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
