What does “no-fault auto insurance” mean in Alberta?

Alberta is changing the way auto insurance works. Beginning on January 1, 2027, the province will switch from the current tort-based system to a no-fault insurance model. This change will have a major impact on how people receive compensation after a car accident.

Definition of No-Fault Insurance

“No-fault” insurance means that if you’re injured in a motor vehicle accident, you will seek compensation from your own insurance company, regardless of who caused the crash. Fault is not the main factor in accessing benefits.

This is different from the current system, where injured people can pursue claims against the at-fault driver.

Key Differences From the Current System

• Current system (tort-based):
  • You can sue the at-fault driver for pain and suffering, lost income, long-term care, and other damages.
  • Settlement amounts are based on the specific facts of your case and are often negotiated with legal support.
• No-fault system:
  • Each driver turns to their own insurer for benefits.
  • Compensation is set by law and typically capped.
  • Lawsuits against the at-fault driver are eliminated in most situations.

What Benefits Will Be Available Under No-Fault?

Under the new no-fault model, your insurance company will provide:

• Medical and rehabilitation coverage
• Income replacement benefits (up to certain limits)
• Support for serious or catastrophic injuries

What you won’t receive under no-fault in most cases:

• Compensation for pain and suffering
• The ability to sue for future income loss or loss of enjoyment of life

Why Does This Matter?

While no-fault is designed to simplify claims and reduce insurance costs, it also means that many Albertans will receive less compensation after an accident than they would under today’s system.

Until December 31, 2026, however, accident victims still have the right to pursue a full personal injury claim under the existing rules.

Key Takeaway: No-fault insurance shifts responsibility away from suing the at-fault driver and instead relies on pre-set benefits from your own insurer. For injured people, this means fewer rights and more limitations on recovery.