Horner introduces five per cent cap on auto insurance increases

By Your Southwest Media Group

Drumheller-Stettler MLA Nate Horner has introduced a cap on auto insurance rate increases as part of Alberta's new Care-First insurance system, set to take effect Jan. 1, 2027.

Horner, who serves as Minister of Finance and President of Treasury Board, said the adjusted rate cap will limit how much insurers can raise premiums. Insurers will not be able to increase average rates by more than five per cent across their full customer base. Individual drivers will not see premiums rise more than 10 per cent at renewal.

The two limits replace the province's previous Good Driver Rate Cap, which the government says excluded drivers with even minor infractions and could be lost if a driver switched insurers, moved or replaced a vehicle.

"Our priority is ensuring the care-first system provides notable savings," Horner said. He said the province will continue to monitor how the system is implemented.

The government says auto insurance costs have risen because of legal expenses, inflation, vehicle theft, natural disasters and tariffs.

An independent report by consulting firm Oliver Wyman projects that premiums will be lower on average once the new system is in place. The government says drivers with basic coverage are expected to save an average of $366 per vehicle.

The Care-First model shifts the system toward faster access to medical care after collisions and away from litigation. The government says Alberta's current system relies heavily on lawsuits, which drives up costs passed on to drivers.

The province says Care-First is not a no-fault model. Drivers will still be able to sue an at-fault driver convicted of Criminal Code driving offences or certain Traffic Safety Act offences, including impaired driving. They can also sue if injury costs exceed their policy limits.

Drivers with an at-fault accident or conviction would still see their rates rise.

The Automobile Insurance Rate Board will continue to monitor insurer profitability during the transition.