On July 30, 2026, the Lieutenant Governor in Council approved fifteen Orders in Council that together represent the most comprehensive overhaul of Alberta's automobile insurance system in a generation. At the heart of this transformation is a shift away from the tort-based system that's governed auto insurance for decades toward a care-first no-fault model under the new Automobile Insurance Act. But calling it a pure no-fault system would be misleading because one of the most important things these orders do is define precisely when Albertans can still sue in tort. Understanding those carve-outs is essential to understanding what the new system actually is. Most of the substantive changes don't take effect immediately. They're tied to the coming into force of section 2 of the Automobile Insurance Act, expected on January 1, 2027, and that timing matters enormously when reading these orders.
The cornerstone of the new system's relationship with civil litigation is O.C. 285/2026, which creates the Exclusions and Tort Bar Exceptions Regulation. This regulation answers the question that every injured Albertan and every defence lawyer will be asking: when can you still sue?
Under the new Automobile Insurance Act, the default position is that injured Albertans receive structured no-fault benefits and they don't sue for those losses. The tort bar closes the courthouse door for claims that are covered by the no-fault system. But the regulation carves out significant exceptions to that bar, and those exceptions define the real boundaries of the new system.
The most significant tort carve-out allows injured Albertans to sue for non-pecuniary damages, meaning pain and suffering, against drivers who've committed specific serious offences. The prescribed offences that open the door to a non-pecuniary tort claim are drawn from the Criminal Code and the Traffic Safety Act. On the Criminal Code side they include criminal negligence causing bodily harm or death, manslaughter, dangerous driving causing bodily harm or death, all three levels of impaired driving causing bodily harm or death, failure to stop after an accident causing bodily harm or death, and flight from police. On the Traffic Safety Act side they include street racing under section 157(1)(a) and any of the administrative penalty provisions under sections 88, 88.01, 88.02, 88.03 and 88.1, which cover things like excessive speeding and other serious driving violations.
When these offences are committed, the tortfeasor's insurer doesn't have to defend them or indemnify them in the tort proceeding. This is a crucial point. The at-fault driver faces a tort claim and faces it alone, without their insurer stepping in to pay the judgment or fund their defence. The injured person suing also can't recover a judgment against their own insurer in this type of proceeding. The tort action runs directly against the wrongdoer.
There's a timing dimension here too. If a driver is merely charged with one of these offences rather than convicted, benefits can be reduced or suspended in the meantime under Part 2 of the regulation. If they're ultimately acquitted or if charges are withdrawn, full compensation resumes retroactively. The regulation also deals with the Limitations Act interaction, making clear that the limitation period for a tort claim based on a prescribed offence doesn't start running until the person is actually found guilty or issued an administrative penalty notice, not from the date of the accident.
The second major tort carve-out allows claims for pecuniary losses that exceed the no-fault benefit maximums. This is where the concept of excess compensation coverage becomes critical. Insurers are required to offer excess compensation options on motor vehicle liability policies, and insureds can choose to buy additional coverage that raises the ceiling on their no-fault benefits. If an insured buys that coverage and their losses still exceed it, they can sue in tort for the excess. If an insured was offered the excess coverage and declined it, however, no tort action is available for those additional losses. The regulation is explicit: declining an excess compensation option forecloses the tort action for what that option would have covered. This applies to the initial policy offer and to every renewal. Crucially, no one can sue an insurer, agent, broker or certificate holder for an insured's decision to decline the excess option unless that insurer or agent was grossly negligent in how the declination was handled.
For claims involving the death of an insured, the regulation prescribes the classes of relationship that entitle a claimant to bring a pecuniary damages action, and those classes mirror the grief counselling relationship categories in the Income Replacement and Monetary Benefits Regulation, covering spouses, adult interdependent partners, parent-child relationships, siblings, grandparents, and familial-like relationships.
Any damages awarded in a pecuniary tort action must be reduced by no-fault compensation already received for the same losses. Tort damages can't be awarded for amounts that were already reduced, suspended, terminated or denied under the no-fault rules. And during a period when no-fault benefits are suspended, the tort bar exception doesn't apply either, meaning the suspension of no-fault benefits doesn't automatically open the door to a tort claim for those same losses during the suspension period.
The regulation also identifies certain persons against whom tort actions can always be brought regardless of the general no-fault framework. These include insureds who stole the vehicle involved in the accident, and voluntary occupants who knew or ought to have known the vehicle was uninsured or was being used for an illegal purpose. Minors are presumed not to meet the knowledge standard for the voluntary occupant exclusion, placing the burden on the insurer to prove otherwise.
Taken together, these provisions reveal that the new Alberta system isn't pure no-fault. It's a hybrid. The no-fault benefits replace tort for ordinary accidents. But when a driver commits a serious criminal or quasi-criminal driving offence, they can be sued personally for pain and suffering. When losses exceed the no-fault ceilings and the insured bought or was offered excess coverage, tort remains available. The regulation essentially prices access to the tort system: if you want protection for losses above the no-fault maximums, you buy the excess coverage. If you don't, you accept the no-fault limits as your ceiling. And if someone hurts you through criminal conduct, you can still hold them personally accountable for the non-economic harm they caused.
The changes fall into three timing buckets. Changes to the AIRB fees, Insurance Agents and Adjusters, Insurance Councils, and Recovery of Insurance Administration Costs regulations are effective immediately as of July 30, 2026. Changes tied to the old automobile insurance system take effect on the coming into force of section 2 of the Automobile Insurance Act. The five new Automobile Insurance Act regulations each come into force on specific subsection proclamations under section 101(1) of that Act. The overall effect is a fundamental reorientation of Alberta's automobile insurance system, one that trades broad tort access for structured benefits and defined care pathways, while preserving the ability to hold truly blameworthy drivers personally accountable for the pain and suffering they cause.
There are still a lot unanswered or unaddressed questions remaining:
For Insurers:
What are the actual dollar amounts? The regulations reference benefit amounts "established by the Minister" dozens of times across income replacement, permanent impairment, caregiver benefits, death benefits, and daily living assistance, but none of those amounts have been published yet. Insurers can't price their products, build their reserves, or model their financial exposure until the Minister sets these numbers.
What does the Care-First Program of Care Guideline actually say? The Benefits, Treatment and Care Regulation incorporates the Guideline by reference and it governs the entire treatment authorization framework, but the Guideline itself hasn't been published. Insurers don't know what injuries fall within the program of care, what treatments are authorized, or how many visits are included.
How will the AIRB approach rate filings under the new system? There's no historical claims data for a care-first benefit structure in Alberta, which means every rate filing in the first years of the new system will be based on assumptions rather than experience. What actuarial methodologies will the AIRB accept when there's no credible loss history to anchor the numbers?
Who are the designated medical assessment service providers and what are the criteria for selecting medical assessors? The Benefits, Treatment and Care Regulation creates a critical role for these entities but doesn't identify them or establish the criteria the Superintendent will use in selecting them, leaving a significant operational dependency completely undefined.
How will the parallel operation of the old and new systems be managed in practice? With the Minor Injury and Diagnostic and Treatment Protocols regulations running for two years alongside the new framework, insurers need clear operational guidance on how to handle edge cases, particularly claims where the accident date is disputed or where ongoing treatment crosses the transition boundary.
For Consumers:
How much will I actually receive if I'm seriously injured? The regulations establish the framework for income replacement, permanent impairment, and other benefits but the actual dollar amounts are set by the Minister and haven't been published. Consumers can't meaningfully evaluate whether the new system provides adequate protection until they know what the benefits are actually worth.
Do I need to buy excess compensation coverage and how much is enough? Declining excess coverage forecloses tort rights for losses above the no-fault ceilings, but consumers don't yet know what the no-fault ceilings are, what excess coverage will cost, or how to assess whether the base coverage is sufficient for their circumstances. This is one of the most consequential financial decisions the new system asks consumers to make and they don't yet have the information to make it well.
What happens if my insurer doesn't respond to my health care practitioner's care-and-treatment request in time? The deemed approval rule sounds consumer-friendly but consumers need to understand what happens in practice when an insurer disputes a deemed approval after the fact, whether their treatment will actually be paid for without interruption, and what recourse they have if the process breaks down.
How do I appeal an insurer's decision and will I need a lawyer to do it? The Tribunal is designed to be accessible but the sixty-day appeal window is short, the process requires a formal notice of appeal, and the proceedings involve medical evidence and benefit interpretation that most consumers aren't equipped to navigate alone. There's no mention of consumer assistance or legal aid provisions anywhere in these orders.
If the at-fault driver committed a serious driving offence, what does my tort claim actually look like? Consumers who are entitled to sue for non-pecuniary damages need to understand that the at-fault driver's insurer won't be defending or paying that claim, meaning they may be suing an individual with limited personal assets. The practical value of the tort carve-out depends entirely on the financial means of the person being sued, and that's something consumers need to understand before they make coverage decisions.
Why did my insurance rates go up before the new system even starts? Many Albertans have noticed premium increases in the months leading up to the transition, which can feel counterintuitive when the new system promises improved efficiency and reduced litigation costs. The reality is that insurers face significant uncertainty during this transition period, including the costs of running two parallel systems, implementing new claims processes, training staff, building reserves for untested benefit structures, and absorbing the actuarial risk of a framework with no historical loss data. Until the system is operational and generating real claims experience, insurers are pricing based on projections and worst-case scenarios, and that uncertainty tends to push premiums higher rather than lower in the short term.
If this transformation of Alberta's automobile insurance system interests you, Binder University offers resources to help you understand how these changes may affect business operations. We'd love to hear your thoughts in the comments below.