Calgary Legal Guidance

Required Motor Vehicle Insurance in Alberta

The topics in the Dial-A-Law series provide only general information on legal issues within the province of Alberta. This service is provided by Calgary Legal Guidance funded in part by the Alberta Law Foundation. The purpose is to make you aware of your legal rights and responsibilities. This is not legal advice. If you require legal advice, you should contact a lawyer.

This topic will discuss the required motor vehicle insurance in Alberta. The information contained in this topic is not intended to be nor should it be used as a complete explanation of motor vehicle insurance in Alberta.

Alberta Insurance Policies

All vehicle owners are required to have insurance on their vehicles in Alberta. Insurance is required for any vehicle that may be driven on streets or highways in Alberta. Even if a vehicle is not being driven or used, if it is parked on a public street, it must have valid insurance. Motor vehicle insurance helps cover the cost of any injuries or damage to property if a driver causes a motor vehicle accident.

All drivers must tell the insurance company of any new developments about their policy to keep the insurance valid. For example, you must tell your insurance company if you finance the sale of a vehicle, or if you put the car up as “collateral” for a loan.

The basic terms and conditions of motor vehicle insurance are the same for all policies in Alberta. The amount of coverage and the cost of insurance can differ between different insurance providers and policies.

There are 3 sections to Alberta Insurance Policies:

  • (1Section A covers injury and damage to other people and their property;
  • (2Section B covers medical expenses of anyone (including yourself) injured in a motor vehicle accident;
  • (3Section C covers damage to your car.

In Alberta, every person must have Section A and Section B insurance, and Section C insurance is optional.

Section A

Section A is called “Public Liability and Property Damage” (PLPD) or Third-Party Liability.

This is the amount that the insurance company will pay to protect you from claims by other motorists if you are at fault. The lowest amount of this type of coverage that a person can legally carry is $200,000. For example, if you are covered for $1,000,000 and are at fault in a motor vehicle accident, which causes injury to another person, your insurance company will pay for the damage to the other vehicle and personal injury expenses. Only up to a maximum of $1,000,000. If the injured party sues you and the Court awards more than $1,000,000, you could be responsible for the rest of the expenses.


Section A also covers injuries to non-paying passengers in a car if the driver was driving negligently. It also covers anyone the driver allows to drive the vehicle. For example, if you lend your car to a friend or family member and they have an accident, your insurance will cover damages to the other party. You should let your insurance company know if you frequently allow someone else to drive your vehicle, such as a child or friend. The insurance company may deny coverage if they are not properly advised.

Section B

Section B is often called “Accident Benefits Coverage” or “No-Fault Benefits.”Section B insurance covers injuries to yourself or another person in the event of a motor vehicle accident. For example, if you hit a pedestrian with your vehicle, Section B insurance will cover the pedestrian’s medical expenses.


Medical expenses include ambulance charges, rehabilitation, required medical treatment, death, or funeral expenses. The insurance company will pay a lump sum or payments to any dependent relatives for up to 2 years. It might cover certain income replacements to accident victims who are fully disabled, for up to 2 years.

Section C

Section C is often called “Physical Damage Coverage.”

Section C insurance covers the damage to your vehicle, whether you cause a motor vehicle accident or not. This is optional coverage.

Section C insurance is a good idea if a person owns a valuable car (or they still owe money on their car). Your bank or financial institution may insist that you carry Section C insurance if you still owe them a large sum of money for the vehicle.

There are 4 categories of coverage under Section C:

  • (1) Collision Coverage is for physical damage, such as a collision with another vehicle, or a roll-over of your vehicle;
  • (2) Comprehensive Coverage is for physical damage not related to a collision with another vehicle, such as theft, vandalism, or hail;
  • (3) All Perils Coverage combines Collision Coverage and Comprehensive Coverage;
  • (4) Specified Peril Coverage is for whatever hazards are specified in the policy. For example, fire and theft, damage caused by lightning, earthquake, hail, explosion, or attempted theft. This is not as extensive as comprehensive but is more than collision.

An insurance company may refuse to pay for any damages to a vehicle if the driver allowed someone to drive the vehicle without a valid driver’s license or with a suspended driver’s license. Also, an insurance company may refuse to pay for any damages to a vehicle if an accident was caused when racing a vehicle or using the vehicle for an unlawful trade.

An insurance company must pay for the damage to other vehicles or any injuries done to other persons. However, the insurance company can sue a driver for any amount they pay on their behalf. If you are being sued by an insurance company, you should consult a lawyer, or use the Lawyer Referral Service, toll-free at 1-800-661-1095.

Traffic Infringements and Accidents

All drivers must inform their insurance company of any traffic infringements or speeding tickets. Failure to inform an insurance company may result in the denial of insurance coverage in the future.

All drivers are required to report any motor vehicle collisions or accidents to their insurance company, right away. When informing an insurance company, do not take any responsibility for the accident or settle any claim without the approval of your insurance company. The driver must cooperate with their insurance company in any settlement negotiations or legal proceedings. For more information, visit the Government of Alberta website at

Driving Without Insurance

If you are is caught driving an uninsured vehicle, the first offense may lead to a fine of between $2,875 up to $10,000. A failure to pay can result in 45 days to 6 months in jail. A second time caught within 5 years of the first offense, you may face a further penalty of between $5,000 up to $20,000. A failure to pay will result in 60 days to 6 months in jail. These sanctions will likely increase your insurance rates. This is not a criminal offense.

If you cause an accident while driving without insurance, you will be personally responsible for any damages to the other person, their vehicle, and their property. This may become a criminal offense, depending on the circumstances.

Alberta License Plates

License plates are purchased at the Motor Vehicles Registry and may only be issued when valid proof of insurance for that vehicle is shown.

An insurance policy only applies to a vehicle named on the insurance policy. If a new vehicle is purchased, the old plates can be transferred to the new vehicle by a Motor Vehicles Registry agent. This transfer requires a new insurance policy for the new vehicle.

If plates are transferred from an old vehicle to a new vehicle, without informing the insurance provider, the owner of the vehicle can be charged with driving without insurance. Also, if the vehicle is in a motor vehicle accident, the insurance company will deny insurance coverage.

No person, at any time, can use someone else’s license plates on their vehicle. This includes if the plates were on the vehicle before it was purchased.

More information about motor vehicle insurance, and checking current policies can be found at, followed by clicking the PDF for “Standard Owner’s Automobile Insurance Policy.”

Dial‑A‑Law is a Calgary Legal Guidance public service project funded in part by the Alberta Law Foundation.

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