Alberta uses an At-Fault insurance system to manage car accident compensation and other road accidents in August 2024. But this may change. The Alberta Government is considering how switching to no-fault auto insurance would impact Albertans – and it’s not all good news for those injured in a motor vehicle accident.
Understanding Auto Law: The Current At-Fault Auto System In Alberta
Alberta currently has a fault-based auto insurance scheme in place. In this system, the insurance company of the at-fault party is responsible for covering the damages, including any compensation for personal injury and property damage.
This system means the insurers need to work out who is at fault and whether there was any contributory negligence (meaning whether both parties contributed to the accident and, if so, to what degree). If any disputes arise about who is at fault, a court may be asked to decide.
It also means that disputes may arise over the extent of damages, which is where it’s important to have an experienced personal injury lawyer helping you with your claim. It’s the job of personal injury lawyers to help injured and wronged parties to get fair compensation for their injuries and losses. In cases where your legal team and the insurer of the at-fault party can’t agree on the compensation for the claim, a court has the power and jurisdiction to determine the appropriate entitlement to compensation.
If you’ve been injured in an auto accident in Alberta, reach out to our team of personal injury lawyers for a free consultation.
Advantages of Alberta’s At-Fault Auto System
Some advantages in a fault-based auto insurance system like the system currently used in Alberta include:
- clear guidelines, laws and court case outcomes that can be used for determining liability and compensation entitlements; and
- incentives for safe driving behavior, as drivers may be more cautious to avoid being deemed at fault in an accident. This can have a direct (negative) impact on insurance premium amounts for unsafe drivers who have caused (or been at fault for) accidents.
The Issues With No-Fault Auto Insurance
No-fault auto insurance promises faster claims processing, reduced red tape, better access to care and resources for all parties, and cheaper insurance. It sounds promising, and it is being more widely adopted in Canada. Ontario, Quebec, Manitoba, British Columbia, and Saskatchewan all have no-fault insurance systems in place.
However, there are significant drawbacks of a no-fault auto insurance system too, including the following:
Limited Ability To Sue
If you are injured in a no-fault system, there are restrictions for what damages you can sue for – even if the other driver is at fault or negligent. This system can be a disadvantage for those who suffer severe injuries or substantial losses as a result of an accident. This is because it can limit the compensation available for these injuries and losses to less than what would have been received under an at-fault system.
Lack of Accountability
Another criticism of no-fault insurance is that this system reduces the level of accountability among drivers. In a no-fault system, drivers do not need to be afraid of being civilly sued for the harm they cause through their negligence. In fact, a no-fault system also means that the insurance premiums of dangerous drivers aren’t likely to increase significantly following an accident either.
Potential for Unfairness
At its core, no-fault systems are designed to provide compensation to accident victims regardless of fault. However, this approach can sometimes result in unfair outcomes. Innocent victims may be penalized if they have to rely solely on their own insurance coverage, even if they were not at fault for the subject accident.
Additionally, some drivers who are responsible for causing accidents may themselves receive compensation without facing any significant consequences for their actions. This can create extremely unfair outcomes following a car accident.
Impact on Insurance Premiums
The evidence about whether no-fault insurance leads to lower insurance premiums is debatable.
An April 2024 Report to the Alberta Government suggested that the “required average premium would be around $1,250 [in a no-fault environment], rather than an anticipated average premium of $2,015 if no changes are implemented and the current [at-fault] system is maintained. This reduction in average premium is driven by lower anticipated claim costs and lower operational expenses.”
However, it’s unclear whether the Canadian provinces with no-fault systems have seen lower premiums. It’s also worth noting that most Albertans support measures that would reduce premiums while still keeping the at-fault system, according to FAIR Alberta.
Complex Claims Process
Navigating the claims process in a no-fault system can be challenging, especially when it comes to determining eligibility for benefits and understanding coverage limits.
There are examples where the no-fault system has resulted in outcomes that are extremely unfair. For example, a motorcyclist in BC was reportedly hit by kayaks that flew out of a truck bed. Since his motorcycle was registered in Alberta and BC has a no-fault scheme, a local newspaper has reported that he has been left in ‘no-man’s land’ following the accident.
No-Fault Auto Insurance in Alberta
Our perspective is that the the cons of introducing a no-fault auto insurance system in Alberta far outweigh any potential benefits. However, if Alberta does choose to adopt a no-fault insurance system, you can rest assured that our personal injury lawyers will still be ready and available to fight for your rights to compensation if you’re injured at no fault of your own.
