Alberta's Care-First Auto Model Starts January 1: 90% of Net Income Replaced, Up to $306,580 for Catastrophic Injuries, and a Projected Average Saving of About $297

Alberta is about to change the way people injured in car crashes are compensated, and the change reaches every driver in the province. Under the Care-First model, which takes effect on January 1, 2027, the court-based system for injury claims is replaced by a no-fault benefits system that applies automatically to Alberta collisions from that date. Insurance Business Canada, in a report published on October 28, 2026, set out the numbers brokers will need to explain, and renewal notices priced under the new model have been going out since November 1. This article summarises that report. Individual outcomes will depend on the policy and the circumstances, and the official government and insurer materials are the authoritative source.

Income replacement

Under the current system, an injured driver receives the lower of $600 a week or 80% of average gross earnings, for up to two years, and longer claims have to go through the courts. Under Care-First, income replacement is 90% of net income, subject to a maximum gross yearly income that is adjusted every year, and it is payable until age 65. The report cites Intact's estimate that the 2027 cap will be $128,000. After age 65 a retirement income benefit applies, and higher earners can buy additional income protection. For someone who earns more than the cap, the benefit is calculated on the capped amount, which is why the report lists the question of whether the cap leaves high earners underinsured as one that brokers should expect, and suggests that optional additional cover or disability insurance may be relevant.

Medical and rehabilitation care

The current system limits medical and rehabilitation benefits with a cap. Care-First replaces the cap with coverage for necessary treatment until maximum medical recovery. Benefits also cover personal care assistance and travel and accommodation connected with treatment. Caregiver benefits, childcare expense reimbursement and death and funeral benefits are also part of the package. This matters for people with serious injuries whose treatment costs can exceed a fixed cap, but the report does not describe how disputes about what is necessary will be decided.

Permanent impairment payments

For lasting, life-altering injuries, Care-First provides a one-time payment. The government describes it as serving a purpose similar to pain and suffering damages in the court system. Intact's estimates for 2027 maximums are $306,580 for catastrophic injuries and $194,159 for non-catastrophic injuries. These are maximums, not typical payments, and the report does not state the payments for lesser impairments or how the amounts are assessed.

A rough comparison with the current system

The report's figures allow a simple comparison for the income benefit. Under the current system, the maximum weekly benefit is $600, and it lasts up to two years. Multiplying $600 by 52 weeks and two years gives a ceiling of $62,400 in total, which is arithmetic on the reported terms and not a figure from the report. Care-First's benefit, by contrast, is a percentage of net income, up to a cap on gross yearly income, and it can continue until age 65. For a younger worker with a long-term injury, the difference in duration could be considerable, while for a person with a short recovery the difference may be small. The report does not model these cases, so individual outcomes will depend on income, age and the nature of the injury.

The same logic applies to treatment. A cap on medical and rehabilitation benefits can run out before treatment ends, whereas cover until maximum medical recovery depends on what is judged necessary. Neither system is risk-free for the injured person: one limits the amount, the other relies on the decisions made about what treatment is needed.

Fault and driving records

Moving away from lawsuits does not mean fault disappears. At-fault drivers can still face higher premiums, demerit points and charges. The change is in how injured people are compensated, not in the consequences of causing a crash. A client may ask what happens if they are injured and the other driver is at fault; the report lists this as a question brokers should be ready for, since under a no-fault model the injured person generally claims benefits from their own policy, but readers should check the official explanation for the exact rules.

What will drivers pay?

The Automobile Insurance Rate Board projects average savings of about $297 per private passenger vehicle, with larger reductions for young drivers. The report stresses that individual premiums depend on driving record, vehicle and coverage choices, so a client's renewal can differ from the advertised average. Readers should check the rate board's latest materials for the current projection.

The Alberta Civil Trial Lawyers Association has questioned the savings projections and argued that limiting lawsuits reduces access to full compensation. That disagreement is central to the policy debate: supporters point to lower premiums and faster access to treatment, while critics say people lose the right to seek full damages. The report presents the criticism without assessing it, and this article does not take a side.

Three questions brokers should expect

The report highlights three client questions. First, why does a client's renewal differ from the advertised average? The answer lies in the individual rating factors. Second, what happens if the client is injured and the other driver was at fault? Third, does the income cap leave high earners underinsured? Brokers should prepare clear answers, documents and examples, and clients should ask them before January.

Practical steps for drivers

Drivers can compare their renewal with last year's, ask their broker how the change affects each coverage, check whether they have disability or critical illness cover that would complement the benefits, and review whether optional additional income protection is worth buying. Families should ask about benefits for dependants and caregivers. Self-employed drivers and those with irregular income should ask how net income will be determined.

This article is a summary of one trade-press report and is general information, not insurance or legal advice.