A Deep Dive Into Alberta’s Bill 47: The End of Auto Insurance As We Know It?
A major shake-up is coming to Alberta’s auto insurance system. Bill 47, officially known as the Automobile Insurance Act, has received Royal Assent and is set to transform how accident benefits and injury claims are handled in the province. Proponents hail it as a “care-first” model that will prioritize the well-being of those injured in collisions, while critics raise alarms about diminished rights and increased power for insurance companies.
The new legislation, which passed on May 15, 2025, will fundamentally alter the landscape of auto insurance in Alberta, with the new system scheduled to take full effect on January 1, 2027. Let’s break down what this means for Albertans.
The “Care-First” Approach: What’s Changing?
At its core, Bill 47 shifts the focus from litigation to a benefits-based system. The government and the Insurance Bureau of Canada (IBC) argue that this will lead to quicker access to better medical care and rehabilitation services for individuals injured in an accident, regardless of who is at fault. However, the government has yet to announce how a care-first system will provide Albertans with quicker and better medical care and rehabilitation over the current Section B model.
Key changes under the new Automobile Insurance Act include:
- Enhanced Medical and Rehabilitation Benefits: The new system promises more comprehensive and timely access to medical treatments, rehabilitation therapies, and other necessary care for accident victims. Of note, Albertans already receive this care for a period of two years under the current model.
- Revised Income Replacement: The rules around income replacement for those unable to work due to an injury will be modified, aiming for a more streamlined process. However, Albertans already receive income replacement for a period of two years under the current model while also reserving the ability to seek income replacement in a lawsuit.
- Significant Limitation on Lawsuits: This is arguably the most contentious aspect of the new law. The ability for an injured person to sue the at-fault driver for pain and suffering will be severely restricted. Lawsuits will likely only be permitted in cases of the most severe and catastrophic injuries.
Proponents, including the Alberta government and the IBC, believe in the new system for its potential to:
- Control Rising Premiums: By reducing the costs associated with legal battles, the government anticipates that insurance premiums will become more stable and affordable for Albertans. However, the government has also announced that each individual’s insurance premium will be rising 7% every year until 2027, for an increase of 14% in a total of two years, having the opposite effect for Albertans.
- Prioritize Health Outcomes: The “care-first” model is designed to ensure that injured individuals receive the treatment they need to recover as quickly and fully as possible, without the delays and adversarial nature of the current system. Again, the government has failed to announce how their “care-first” model will outweigh the current Section B model that Albertans have enjoyed.
Albertans should be critical of Bill 47 as legal experts and consumer advocacy groups, like FAIR Alberta, have expressed significant concerns about:
- Diminished Legal Rights: The restriction on the right to sue is a major reduction of an individual’s ability to be fairly compensated for their pain, suffering, and other non-monetary losses.
- Increased Power to Insurers: Insurance companies will have too much control over determining the type and duration of care an injured person receives, potentially leading to disputes and inadequate treatment with Albertans left with no recourse.
- Lack of Accountability: A reduced threat of lawsuits may lead to less accountability for at-fault drivers and their insurers, essentially rewarding bad drivers for their behavior.
With the Automobile Insurance Act now law, the government and the insurance industry will be working to finalize the regulations and infrastructure needed to implement the new system by the January 1, 2027 deadline.
For Albertans, this means the auto insurance they have known is on the cusp of a dramatic transformation. The coming months will be crucial in shaping the fine print of this new reality. As the transition unfolds, it will be vital for consumers to stay informed about how these changes will impact their coverage, their rights, and what they can expect in the unfortunate event of an accident.