Albertans Are About to Save Hundreds of Dollars on Auto Insurance

Why Are Personal Injury Lawyers Trying to Stop It?

Alberta’s new Care-First auto insurance system is expected to save drivers $260 annually beginning January 1, 2027. What’s more, it will provide those injured in collisions with the highest level of treatment and recovery benefits in the country.

But the advocacy of Alberta’s personal injury lawyers, if successful, would prevent those changes and the savings they would bring.

Why are personal injury lawyers pushing against the changes? Because they favour a system based on litigation.

Today, up to 40% of an auto insurance claim settlement goes straight to a personal injury lawyer, and soaring lawsuits and legal fees are pushing up premiums for drivers. The result is Albertans pay some of the highest auto insurance premiums in Canada.

How Care-first Helps

By taking action to reduce costly legal battles, Care-First is expected to save drivers $260 every year on average. With 3.2 million drivers, that’s $830 million in savings for Albertans – money that currently goes into the pockets of personal injury lawyers.

Care-First will prioritize care over courts. People injured in collisions will receive faster access to treatment and support, as guided by medical professionals (not their insurer).

Your Savings are at Risk

If Alberta’s personal injury lawyers are successful, Care-First and its associated savings will disappear, costing you more year after year.

It’s critical that these reforms move forward as intended.

The province must prioritize the needs of its 3.2 million drivers over the wants of 700 personal injury lawyers.

Here are the facts:

FACT #1: LEGAL COSTS ACCOUNT FOR ROUGHLY 20% OF WHAT DRIVERS PAY FOR AUTO INSURANCE.

A 2023 report found that legal fees associated with insurance claims have soared 31% in Alberta since 2018 and now account for about 20% of a driver’s premiums for mandatory coverage. Between 2018 and 2022, over $1.2 billion of the premiums that drivers paid went to legal costs associated with claims.

Payouts for legal settlements following collisions have grown faster and are now three times higher in Alberta than anywhere else in Canada.

With Alberta drivers footing the rising cost of litigation, the province announced reforms aimed at reducing these fees and improving affordability for drivers.

FACT #2: ALBERTANS RECOGNIZE THAT LEGAL COSTS ARE DRIVING THEIR AUTO INSURANCE PREMIUMS HIGHER.

Following a collision, the vast majority of drivers make a claim and receive a reasonable settlement. However, an increasing number of legal claims are being made, creating delays and driving up costs for everyone.

Albertans recognize this, and when asked about the main factor behind the challenges in Alberta’s auto insurance market, 74% of Albertans agreed that legal costs are driving up the price of auto insurance premiums.

A more recent 2026 survey found two-thirds of Albertans support Care-First, and 57% support a decrease in the ability to sue in exchange for the savings and improved benefits that Care-First provides. In sharp contrast, just 13% said they wanted to maintain the right to sue at current levels.

FACT #3: LEGAL COSTS MAKE UP AS MUCH AS 40% OF AUTO INSURANCE SETTLEMENTS.

Auto insurance premiums should be used to help those injured in a collision get the medical treatment they need to recover. Yet, an increasing amount of the premiums drivers pay are going to the payment of personal injury lawyers.

Today, approximately 38% of settlements paid to people injured in an accident go towards the legal costs resulting from litigation. That’s more than twice the share that goes to the claimant to account for pain and suffering.

FACT #4: NEW ALBERTA GOVERNMENT REPORTS IDENTIFY THE IMPACT OF LEGAL COSTS ON DRIVERS.

On April 26, 2024, the Alberta government released two reports that provide further evidence of how much drivers would save on premiums by removing court involvement and personal injury lawyers from the auto insurance system.

This analysis found drivers can save hundreds if legal costs are brought under control. There was no longer any debate as the best way to deliver savings to Alberta drivers.

A few months later, government announced the province would move to a Care-First system.

Alberta’s Auto Insurers Are Here to Help

Alberta’s auto insurers – the people who live and work in this province – are working with government to help ensure Care-First is implemented effectively.

As an industry that plays a vital role in Alberta’s economy, we want to see a system that delivers the right balance: better care for those who need it, and more affordable premiums for drivers.

Care-First can deliver both.

But only if it’s implemented as planned. And if care – not personal injury lawyers and litigation – remains at the centre.