Alberta is moving ahead with a major overhaul of its auto insurance system, with changes that directly affect how claims are handled, how benefits are delivered, and how medical assessments are conducted.
Bill 27, the Financial Statutes Amendment Act, 2026, passed first reading on April 1 in Alberta’s Legislature. Second reading was adjourned on April 15. The bill was introduced by the Minister of Finance and amends several pieces of legislation, but most significant for those in the insurance business is a comprehensive rewrite of the Automobile Insurance Act.
Medical assessments
One of the most notable changes involves medical assessments. Under Alberta’s current system, insurers can require claimants to undergo medical examinations as often as reasonably necessary. That means if it’s taking a person a long time to overcome an injury, an insurance company can ask for an exam to assist the process.
The proposed framework removes that discretion. Insurers must instead apply to the Superintendent, who will appoint a medical assessor in line with requirements. The assessor will then provide a report that insurers must use for legally authorized reasons, with insurers restricted from seeking any additional injury-related assessments outside this process. This marks a significant shift away from insurer-controlled assessments.
No-fault benefit system
The bill also introduces a restructured no-fault benefits system called “benefits payable regardless of fault.”
Regardless of who is responsible for an accident, insurers will be required to compensate their clients for injuries or death in accordance with the Act, which has a clear hierarchy determining which insurer is responsible for payment. That depends on whether the policy covering the injured person is a named insured, spouse or partner, dependent, or specified driver.
If coverage is not available through those specifications, the responsibility for compensation moves to the insurer of the vehicle the person occupied, then to other involved vehicles, and ultimately to the Motor Vehicle Accident Claims framework.
Excess compensation policies
Insurers may offer policies that provide “excess compensation,” which allow for coverage beyond the limits for certain expenses and benefits. Excess coverage is restricted to the named insured and their immediate household, including spouses or partners and dependents.
Definition of accident
Several key definitions guiding the handling of claims are also being updated. The definition of “accident” is now an event “arising from the use or operation of an automobile,” which changes the previous wording of “caused by.” The term “insured” has also been redefined to focus on entitlement to compensation under the legislative revisions, and “permanent impairment” will now be determined based on injuries described by the legislative framework.
Care recipients
New terminology for young people is also being introduced. Bill 27 defines a “care recipient” as someone under the age of 16 or otherwise unable to maintain employment and is dependent on the insured for care. At the same time, the definition of “non-earner” has been further clarified. Individuals who have not worked in the two years prior to an accident and who are not expected to work in the future will no longer qualify as a “non-earner.”
Denial or limitation of claims
Currently, legislation allows for reduced or denied benefits in cases such as intentional harm, convictions, or providing false information.
Bill 27 allows insurers more authority, in that they may act not only on convictions, but also on charges for designated offences. The new laws will also apply to any vehicle occupant charged or convicted, regardless of fault, and include administrative penalties under traffic laws.
There are also new powers for establishing treatment standards. Those include setting guidelines, protocols, and rules overseeing how specific injuries are diagnosed and treated, as well as defining which health-care services must be covered. Insurers will be asked to follow these standards and fund eligible treatments accordingly.
This is an attempt to help lower insurance rates across the board for Albertans. According to data from the General Insurance Statistical Agency, settlements from accidents in Alberta have blown up by 116% over the past decade. As a result, Alberta drivers now pay more than triple the amount in insurance premiums for legal fees and litigation costs following collisions compared to drivers in other Canadian provinces.
Between 2018 and 2022, the frequency of lawsuits following a collision rose by 48%, with more than $1.2 billion spent on litigation costs. In the cases that went to court, legal costs greatly exceeded the cash payments provided for pain and suffering to those injured (often more than double the amount).
Save on your auto insurance premiums with Lane’s Insurance
Working with a trustworthy insurance broker such as those of us at Lane’s will help keep your costs to a minimum without affecting the quality of your coverage. We work with some of the best insurance providers in the country, and our long-standing relationships with them allow us to find you the very best prices for your coverage. We serve all of Alberta and offer affordable insurance bundles, excellent advice, outstanding claims support and the industry’s best customer service. Contact us at our Calgary, Edmonton, Banff, and Alberta offices.
