Danielle Smith warns auto insurers, public auto insurance back on the table

Is she playing hardball? Is she calling their bluff?

“We’re challenging the insurance companies and we’re challenging the trial lawyers. Make this work because if you don’t there’s the next logical step.

“I don’t want to do that. I prefer free enterprise.”

The words are those of Alberta Premier Danielle Smith.

What the premier is talking about is the government’s plan for a new auto insurance system in 2027, one laying out the amounts to be paid out for injuries and other costs because of auto accidents but allowing fewer opportunities to sue.

The Smith government hopes there will be big savings for drivers in 2027. This is her solution for the auto insurance premium mess.

The next logical step for Smith if her solution fails. Government-run public auto insurance.

Meanwhile, insurance companies continue to bellyache. They are pressuring the government to allow higher premiums right now.

Let us talk about 2027 first.

Smith says if her auto insurance overhaul doesn’t work “the next logical step” the premier points to is public auto insurance, as other provinces like Saskatchewan and Manitoba have.

Smith says she doesn’t want to go that route but will if there is no other way to achieve more reasonable premiums for good drivers going forward.

“We are attempting to make this market work. The end of the line here is if the trial lawyers and the insurance companies can’t make the new market work the next step is a public insurance model.”

Smith adds the insurance companies know full well some of the advice her government is getting is “to go full public insurance” with no fighting out in court whatsoever after an accident.

A look-see paid for by the Alberta government found average premiums would be hundreds of dollars lower a year with public insurance though the government would have to fork out a lot of dough in start-up costs to make that change.

Public auto insurance in Alberta. Now that would be one hell of a headline.

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In the summer of 2024, Smith said there was no appetite for government-run public auto insurance.

In the fall of 2024, Smith issued her first warning to insurance companies, to play ball and get premiums for good drivers down or face the prospect of public insurance.

Smith told the insurance companies to take her seriously.

This past summer, the insurers said the government’s new insurance system in 2027 will still result in premium hikes for drivers.

Clearly, Smith is losing her patience, particularly since the premier vowed to make auto insurance premiums in Alberta more affordable.

Let us now talk about the present and the new year. 2026.

Right now, auto insurance companies are singing the blues. They always sing the blues. They claim they can’t make a buck in Alberta.

On Tuesday an insurance company I’ve never heard of says it won’t be selling auto insurance in Alberta come the new year. They tell us it’s just not worth it.

Premier Danielle Smith confirms there are those in her UCP government who talk about maybe allowing insurance companies next year to hike auto insurance premiums by more than the 7.5 per cent the government allows, the so-called rate cap.

Talk about sticker shock.

Allowing insurance companies to hit us with more than a 7.5 per cent hike could see good drivers facing premium increases of $400 or so in 2026. I wrote about this last month.

Nate Horner, Smith’s budget boss and the one riding herd on the auto insurance file for the Smith government, will tell you insurers are taking in less coin than they are paying out.

Horner will also tell you current premiums are artificially low and putting a cap on premium hikes this year and next year has made the insurance system “more vulnerable.”

Smith herself says she is inclined to keep rate hikes to 7.5 per cent in 2026, hoping when a new insurance system allowing far fewer lawsuits kicks in by 2027 Alberta drivers will see premiums go down and it will be noticed.

Of course it could all be BS.

“We’re trying to find the balance,” says Smith, telling us she is not cutting trial lawyers entirely out of the system.

“Maybe we will have slightly higher insurance rates than the rest of the country but the insurance companies and lawyers have to figure out a way to make that work.”

Let’s see if that lights a fire under the appropriate behinds.

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