Calgary 
Alberta is setting new limits on auto insurance increases as it prepares to roll out its Care-First system in 2027, a shift aimed at stabilizing premiums and reducing costs for drivers.
The province says rising insurance prices in recent years have been driven by factors such as legal expenses, inflation, vehicle theft, natural disasters and tariffs. In response, it will introduce an adjusted rate cap starting Jan. 1, 2027, alongside the new system.
Under the updated rules, insurers will not be allowed to raise overall rates by more than five per cent annually across their customer base. At the same time, individual drivers will see their premiums capped at a 10 per cent increase when they renew. The two limits are designed to work together, controlling system-wide increases while preventing sharp spikes for individuals.
The change replaces Alberta’s previous Good Driver Rate Cap, which excluded some drivers over minor infractions or life changes such as switching insurers or moving. The new cap is intended to extend protections more broadly.
Finance Minister Nate Horner said the focus is on ensuring the system delivers noticeable savings, adding the government will monitor results and adjust if needed.
Per the news release, independent analysis from Oliver Wyman suggests premiums should decline once Care-First is in place. Drivers with basic coverage are expected to save about $366 per vehicle on average.
The province says the Care-First model shifts emphasis from litigation to medical care after a collision. Alberta’s current system relies heavily on court processes, which adds administrative and legal costs. The new approach aims to streamline recovery and reduce those expenses.
Lawsuits will still be allowed in certain cases, including Criminal Code driving offences or when costs exceed insurance coverage. Premiums will also continue to reflect individual risk, meaning drivers with at-fault incidents may still face higher rates.
Oversight will remain with the Automobile Insurance Rate Board, which will monitor insurer pricing and profitability during the transition.
