Understanding No-Fault Auto Insurance: What it Means for Albertans

April 14, 2025

As Alberta prepares to transition to a no-fault auto insurance system at some point in 2027, many Albertans are left wondering what this means for their legal rights and the ability to seek fair compensation after a motor vehicle accident. At Hammer Injury Law, we understand the complexities of this change and are here to advocate for accident victims, ensuring they are aware of their current rights and future implications.

What is No-Fault Auto Insurance?

No-fault auto insurance is a system where individuals injured in car accidents primarily seek compensation from their own insurance companies, regardless of who caused the accident. Unlike Alberta’s current system, which allows injured parties to sue at-fault drivers for damages, no-fault insurance limits this legal recourse.

Here’s a breakdown of the key features of no-fault insurance:

Claims Are Handled by Your Own Insurer: Instead of suing the at-fault driver’s insurance company, you will rely on your own insurance for benefits like medical care, rehabilitation, and income replacement.

Limited Ability to Sue: Lawsuits for pain and suffering or other damages will only be allowed in exceptional circumstances, such as when the at-fault driver is convicted of a criminal offence like impaired driving.

Standardized Benefits: Compensation for injuries and expenses is predetermined by the insurance system, leaving little room for negotiation or individual circumstances.

While the government argues that this model reduces litigation and speeds up access to care, experiences in other provinces, such as British Columbia and Saskatchewan, suggest that no-fault systems often lead to frustration and inadequate compensation for injured parties.

Implications of Alberta’s Move to No-Fault Insurance

The shift to a no-fault model is more than a change in how insurance claims are processed—it represents a fundamental shift in the rights of Albertans. Here are the potential impacts:

Reduced Legal Rights

Under the no-fault system, injured individuals will largely lose their ability to seek fair compensation through the courts. Claims for damages like pain and suffering, lost future income, and long-term care will be limited to what the insurance company deems reasonable.

2. Insurers Gain More Control

For-profit private insurance companies will decide what benefits you receive and how much you are entitled to, leaving injured Albertans navigating a process similar to the Workers’ Compensation Board (WCB). This raises concerns about accountability and fairness.

3. Questionable Savings

While the government has promised that this system will lower premiums by up to perhaps $400 annually, history suggests these savings may be short-lived. Other provinces that adopted no-fault systems initially saw modest premium reductions, but costs quickly rose. Additionally, in other provinces the insurance provider is a public entity and thus any profits are issued to the province as a dividend. Whereas, in the proposed Alberta system, the profits are taken by the private multi-national insurance corporations.

What This Means for Albertans Right Now

The current legal system in Alberta allows injured parties to seek compensation from at-fault drivers’ insurance for damages such as pain and suffering, loss of income, and medical expenses. This system remains in place until at least January 1, 2027, meaning if you are injured in an accident today, you still have the right to pursue a claim under the existing rules.

If you’ve been injured, acting quickly is essential to ensure your case is handled under the current system. Hammer Injury Law is here to provide expert guidance every step of the way.

Rick Mallett: Advocating for Albertans’ Rights

Rick Mallett, the founder of Hammer Injury Law and former President of the Alberta Civil Trial Lawyers Association (ACTLA), has been deeply engaged in addressing these changes. With over three decades of experience, including a background in insurance defence, Rick offers a unique perspective on the potential impact of no-fault insurance on injured Albertans.

Rick’s leadership in the legal community reflects his commitment to protecting the rights of accident victims and holding insurers accountable. At Hammer Injury Law, this advocacy is the foundation of everything we do.

What Can You Do?

While the no-fault system isn’t here yet, staying informed and proactive is crucial. We encourage Albertans to:

Know Your Rights: Understand the current system and the implications of no-fault insurance.
Advocate for Change: Reach out to your MLA to voice your concerns about the proposed system. Tools like FAIR AB can help amplify your voice.
Seek Legal Advice: If you’ve been injured in an accident, consult an experienced injury lawyer to ensure your rights are protected.
Stay Informed: Follow organizations like FAIR AB for updates and resources on how to protect your rights.

Hammer Injury Law: Here to Help

At Hammer Injury Law, we stand by Albertans during this period of uncertainty. We are committed to providing the support, knowledge, and representation you need to navigate the current system and prepare for the changes ahead. Whether you’re seeking fair compensation for your injuries or have questions about your legal options, we’re here to help.