Canadian Underwriter

What a ‘made-in-Alberta’ no-fault auto insurance regime would look like

March 13, 2020   by Adam Malik

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Moving to a no-fault system would help alleviate the pressures being put auto insurance costs in Alberta, and would be a unique model in the Canadian market, according to the head of the province’s brokers.

“We feel this will kick some of the costs out of the system and also make the physical damage repairs happen a little quicker and a little more efficiently,” George Hodgson, CEO of the Insurance Brokers Association of Alberta (IBAA). “It means people get repairs and those sorts of things done to their car quicker, because you don’t have to have a fight between two insurance companies. If you get into an accident, whether it’s your fault or not, your insurance company will work at repairing your car.”

The Alberta solution calls for policyholders to be able to buy-up for tort. “You have to pay extra to have the right to sue outside of the catastrophic injuries,” Hodgson told Canadian Underwriter. “The idea is that it will reduce claims costs while at the same time giving people the right to sue if they feel they need to.”

While the Insurance Corporation of British Columbia recently announced measures to move to a no-fault style system, Hodgson emphasized that his group’s move was made independent of his neighbouring province. In fact, they looked out of the country for the best solution for Alberta.

“It’s kind of going on our own here to a certain extent,” he said. “The one that comes closest to what we’re proposing is New Jersey. They have a no-fault for basic and you can buy up for tort.”

That makes what Alberta is proposing unique. “From a Canadian perspective, anyway, it’s a ‘made in Alberta solution,’” Hodgson said.

How much money it will save the system is unknown at this time. But Hodgson pointed out that “Alberta auto is in trouble. Premiums are going up in a large part because of claims costs. Up to 71% of the increase in claims costs are due to bodily injury. It’s important to get that under control. It’s important to get people the care they need as opposed to paying out cash.”

That ‘care-not-cash’ theme is top of mind for him. Rather than cutting a cheque for an injured party, a revised system would ensure that the person is receiving the care they need to recover. Or, if recovery is not possible, policyholders would be provided with “the best quality of life,” the white paper says.

“For bodily injury, there will be less cash in the system and more care,” Hodgson said. “In other words, it will point people to recovering from their injuries rather than taking a cash payout.”

That’s another one of the 20 recommendations outlined in a new white paper from the IBAA. The Framework: Fixing the Alberta Auto System, has been sent to Alberta’s Auto Advisory Committee (AAAC) to be included with submissions from other groups on how to combat the rising cost of auto insurance in the province.

Other than the removal of the 5% rate cap, there hasn’t been much change to the system yet, Hodgson noted. He believes that, rather than small changes here and there, the provincial government is looking to make wholesale changes at once. “This particular government seems to move pretty quickly, so I would expect that whatever they do…they’re going to do it as quickly as they can.”

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14 Comments » for What a ‘made-in-Alberta’ no-fault auto insurance regime would look like
  1. Steve Kendal says:

    but what about a victim’s pain and suffering. I agree we should get proper treatment and care but I also want the bad driver who hurt me pay me for my pain and suffering – that is why we have the court system to figure that out. Why should bad drivers be allowed to get away with hurting others and not pay for the victims pain and suffering just so they can save a few bucks in insurance – that sounds very unfair

  2. Michael MacNeill says:

    I don’t get how cash makes a difference to the pain and suffering of someone injured. Maybe a trip to Hawaii with the proceeds of a $20,000 lawsuit? Does that make the pain go away? The “bad drivers” do not pay the “victims “, their insurer does. Let’s make sure the injured people get proper medical attention and rehabilitation, and cut back on court costs and litigation.

  3. Theo van Besouw says:

    It is obvious that the insurance system needs to be fixed, but what is missing is why are there not more rigorous measures taken against people who cause accidents? Why do people who have a clean driving record for decades have to pay for those who repeatedly forget to keep distance from the vehicle in front of them? It would benefit everyone if repeat offenders are faced with a steep (let’s say double) rate for each accident they cause. That would go to the root of the problem: let those who cause the problem in the first place pony up their share.

  4. Maggie Popal says:

    If the Insurance goes as a “ No Fault Insurance “ we in Alberta will be going to a NDP system
    like B.C . and I didn’t Vote for the Conservatives for them to allow a Socialist Auto Insurance
    to be brought in . Time you rethink this Premier Kenney . This is what Rachel Notley and her NDP Party would do .
    Call 780 427 2711 and ask for the Premier’s Office and tell him to stop this insane idea . We already got a increase in our Auto Insurance and it was a substantial amount .
    Also go online and sign the Petition at “ FAIRAB.CA “ make your voice heard .
    Fair Alberta Injury Regulations
    This is not right to Albertans , stop it before it’s passed .
    Call the Premiers Office remind
    Albertans Voted in Conservative Government not a NDP Socialist Government . Enough is a Enough ! We stood behind you now please stand behind us Albertans on this matter !!!!

  5. RON says:


  6. Roger says:

    This is a very poorly through out system and like Ontario it’s Totally against the clients and drivers. If you use the weight of evidence then you may have pages by paid lobbyists saying“everything is just great”. On the other side of the scale there is a lot stacked up against this system. I recall 62 pages with excellent points that was written by David Marshall in 2017. I A few weeks ago you the Canadian Underwriters tried to lessen his findings and he was 100% correct and you still need his 30 recommendations being put into action. No wonder the Ontario system after 30 years Is still is mess and needs tweaking every couple of years. Keep it out of Alberta.

  7. Richard Logan says:

    No fault insurance is a joke used it when lived in BC .This should and hope never will be in Alberta it’s unfair and unjust in my option . NO FAULT NO THANKS

  8. Randy Ormel says:

    No fault insurance as described above sounds good. Double or triple the rates of bad drivers and leave the good ones alone. Why should everyone’s rates keep climbing to pay for vacations, or whatever. Too much of the awarded money goes to lawyers anyway. No fault sounds more like a Canadian solution then becoming more like the get rich “sue’em” mentality in the states.

  9. Lynne McCullough says:

    No fault insurance – NO WAY
    The driver at fault should be made to pay for what happened. Too often the guilty driver gets a slap on the hand and goes out and does it again which results in people who have never had a accident paying for the ones who do. I voted Conservative not NDP – I guess this United Conservative party is a faulty name. Seems to me that you are putting things through without the general public knowing. I don’t trust you anymore Mr Kinney!

  10. clarence Critch says:

    I’m tired of being ripped off by insurance companies if you don’t insure for a couple of years they treat you as though you are a new driver with no experience and charge you outrageous premiums, this is not fair

  11. Marcia says:

    So ridiculous the thought that the government on behalf of insurance companies would take away our right to sue! ABSURD!

  12. Kim says:

    This is completely unfair system as demonstrated by the BC insurance for years. Why is Alberta going in to the No Fault insurance other then saving Large insurance company. We pay premium insurance to protect us when an accident occurs but, instead the No Fault system will take away our individuals rights and all the insurance company will ignore who is at fault. The insurance company will no longer be protecting our rights of the injured individuals with pain and suffering or loss of income or loss of ability after the accident. The only thing they are protecting are people who caused the accident and no one will be accountable to for the accident. NO THANK YOU for NO FAULT

  13. Caryn Jennings says:

    This is a conservative policy. Steve (Stephen Harper) is behind this whole mess. Ironically our Premier did not mention this as part of his mandate during the election. Have to ask yourself why they are trying so hard to keep it under the wire, while most people are still dealing with C-19 issues Jason and Steve are trying make insurance companies even more money.

  14. L. Priest says:

    The problem with no fault insurance is two fold:
    1) What happens if the person is so hurt with a soft tissue damage that they can no longer work. With no fault insurance the person hurt goes into poverty and can no longer support themselves and has to go onto welfare.
    2) As a side note I was hit by someone in a no-fault province – no one was hurt in our vehicle but my insurance company at the time, The Personal, would only pay $13K for the vehicle even though I could not buy a replacement for under $26K I said fix it and they said not my call. I arbitrated and got $18K, but still could not replace the truck – this was a result of someone hitting me. Think about what you are getting into with no-fault insurance.

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