Alberta trucking fleets insured through the industry’s insurer of last resort are facing a steep rate increase that reflects deeper challenges in the province’s commercial auto insurance system.
Facility Association (FA), the residual market that provides insurance for high-risk or hard-to-place operators, is implementing a 28.23% rate increase for interurban vehicles in Alberta. The change takes effect March 1, 2026, for new policies and April 1 for renewals.
Interurban vehicles generally include longhaul and regional trucking operations traveling between municipalities. The increase highlights the financial pressures affecting Alberta’s commercial auto insurance market.
“Alberta has been the epicenter of Facility Association’s commercial vehicle growth for nearly a decade,” said Samuel Elkins, founder and executive chairman of Strategic HSE Systems.
Residual market exceeds 10% in Alberta
According to data from the Alberta Insurance Rate Board, the residual market now represents 10.3% of the province’s commercial auto insurance market, up from 3.9% in 2017.
“That’s concerning for what’s supposed to be the insurer of last resort,” Elkins said.
Facility Association does not operate like a traditional insurer. Instead, it functions as a statutory insurance pool made up of every company licensed to write automobile insurance in the province. When a driver or fleet cannot obtain coverage in the voluntary market, their policy is placed through FA.
Premiums, losses and expenses are pooled and shared among insurers based on their market share.
“If an insurer writes 10% of the auto insurance market in Alberta, they absorb 10% of Facility Association’s results whether they want to or not,” Elkins explained in an interview with trucknews.com.
Policies are administered by servicing carriers. In Western Canada, Ontario and Atlantic Canada, those policies are currently handled by Nordic Insurance, a subsidiary of Intact Financial.
But insurers do not voluntarily choose to insure these risks.
“The short answer on incentive is there is none,” Elkins said. “Facility Association exists because mandatory auto insurance requires a backstop.”
Several factors have combined to make Alberta one of the most challenging commercial auto insurance markets in Canada.
The province operates under a tort-based legal system that allows injured parties to pursue lawsuits with no cap on non-minor injuries. That tends to produce larger settlements and longer claim timelines than systems with stronger no-fault components.
Insurers losing money in Alberta
At the same time, insurers have been losing money in the province. The Insurance Bureau of Canada reports Alberta auto insurers lost $1.2 billion in 2024, paying out roughly 18% more in claims than they collected in premiums.
Commercial trucking claims have also climbed sharply. Between 2017 and 2022, claim costs nearly doubled, rising from about $150 million to $274 million.
“The voluntary market has retreated,” Elkins said. “Three carriers have exited the province entirely.”
Driver training standards have also been part of the discussion.
Alberta’s previous mandatory entry-level training (MELT) program required roughly 120 hours of instruction for new commercial drivers, significantly less than programs in provinces such as Quebec.
The province replaced MELT in April 2025 with a new Class 1 Learning Pathway, aimed at improving driver preparedness. But insurance claims often take years to fully develop and impact claims.
“The damage from years of underprepared graduates entering the industry is still showing up in claims data,” Elkins said.
Trucking companies typically end up in the Facility Association when insurers are unwilling to offer coverage in the standard market. Common reasons include poor claims history, incomplete driver qualification records, weak safety management systems, or a lack of insurance history for new carriers.
But fleets are not necessarily stuck there permanently.
‘You earn Facility’
Roy Craigen, president of Transcom Fleet Services, said companies can earn their way out of the residual market — just as they earned their way in — but it requires major changes.
“You earn Facility,” Craigen said. “The owners and managers have to accept the fact that they did this to their company, and what they need is an intervention.”
He said there is no quick fix for fleets trying to escape the pool.
“They need wholesale change. There’s no silver bullet to go from Facility back to the regular insurance market.”
Craigen said one company he worked with was facing the loss of its operating authority due to safety and compliance problems. After restructuring its operations and improving safety performance, the fleet dramatically improved its regulatory audit score and was eventually able to return to the voluntary insurance market.
“In about 12 months, their insurance dropped by tens of thousands of dollars, and they got back with a commercial insurer,” he said.
But that level of turnaround requires rebuilding how the company operates.
“You have to restructure the whole business,” Craigen said. “You have to redo the safety programs and change how the company is managed.”
He said many fleets rely too heavily on technology or third-party training systems rather than actively managing drivers and safety performance.
“Most companies aren’t managing their driver teams,” Craigen told trucknews.com. “They’re letting technology platforms manage them, and that’s not how it works.”
For carriers hoping to return to the voluntary insurance market, safety and documentation remain critical. That includes maintaining complete driver qualification files, implementing active safety management systems and demonstrating improvements in claims performance.
Insurers increasingly want evidence that fleets are actively managing risk rather than simply reacting after incidents occur. Technology is also becoming part of the underwriting conversation.
Facility Association launched a video-enabled telematics program for Alberta interurban vehicles in 2023 that can offer participating fleets premium discounts. But technology alone will not fix deeper operational problems.
“The fleets that get out of Facility are the ones that change everything,” Craigen said. “It starts with management.”
And it starts with accountability from that management, he added, recalling his approach to one such carrier.
“When we started with that company, we said to the owner, we said to the vice president of operations, we said to the manager of safety and compliance and the maintenance guy, ‘For the next three weeks, you’re not going to do any of your jobs’,” he recalled. “You’re going to go into the conference room, and you’re going to have one-on-one meetings with your 70 drivers and apologize to them. That’s what we started doing.”
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