The Alberta government says drivers will continue to receive protection from rising auto insurance costs under a new adjusted rate cap that will take effect with the province’s Care-First auto insurance system on Jan. 1, 2027.
Under the new rules, insurance companies will not be allowed to increase average rates by more than five per cent annually, while individual drivers will face a maximum premium increase of 10 per cent at renewal. The province says the updated model replaces the previous Good Driver Rate Cap and is intended to provide savings to a larger number of Albertans.
Finance Minister Nate Horner said the government’s priority is ensuring the Care-First system delivers meaningful savings for drivers. An independent report by Oliver Wyman estimates Alberta drivers with basic coverage could save an average of $366 per vehicle once the new system is fully implemented.
The Care-First model will focus on faster medical care and recovery following collisions rather than lengthy legal battles, which the province says have contributed to rising insurance costs. Drivers will still be able to sue in serious cases, including impaired driving and certain Criminal Code offences. The government says it will continue monitoring insurance companies to ensure rates remain stable and affordable.
