No-Fault Insurance

To many, claiming car insurance is a long, tiresome, complicated, and stressful process.

Some would instead back off and miss out on compensation to avoid the entire process.

Unfortunately, you can't run away from insurance and insurance processes (especially if you own an automobile).

Luckily, we're here to help simplify everything so that you no longer have to suffer from the headaches and confusion many people face when they hear "insurance."

We believe that the first step to understanding automobile insurance is understanding the meaning of the term "no-fault."

What is "No-fault" in insurance?

Most people think that "no-fault" means that no driver was found responsible for causing the accident. No, that's a misconception.

"No-fault" means that you remain eligible for compensation from your insurer, regardless of whether or not you were found responsible for causing the accident.

Note: Just because your insurer offers "no-fault insurance" doesn't mean it's claimable for bodily harm and property damage.

For example, here in Ontario, the "no-fault insurance system" only compensates for bodily injuries and not property damage resulting from car accidents. 

How was life before the "no-fault insurance"?

We can travel back to the 1980s when "no-fault insurance" wasn't a thing.

When an accident happened, both parties had to endure a long and ferocious investigative process to determine who was to "blame" for the accident.

This meant that both parties had to wait weeks (or longer) to receive compensation. It's even worse if there were injured drivers and passengers who depended on their claims for medical care.

The driver found to be responsible would then file a claim with his/her insurance company. The insurance company would then go ahead and compensate both parties.

No-fault insurance came and changed all that.
If, unfortunately, an accident were to happen, your insurance company would quickly jump into action and cater to your medical bills and property damage (If applicable in your province).

Note: Your insurance company will only cater to your claim. The other driver will have his/her car accident losses settled by his/her insurance company.
What happens if you're declared at fault after the No-fault Insurance compensation?

You'll still have to face penalties if you're declared "guilty" after the no-fault compensations.

For most, this would mean an increase in their insurance premiums. 

Is the No-fault Insurance policy applicable to passengers?

Yes. Ideally, the passengers need to have their insurance to protect them from such events.

However, there are cases where passengers need more insurance coverage. In such cases, passengers can get compensation from the driver's insurance companies.

Read here to learn more about No-fault Insurance Policies.

Fault Determination

Even with No-fault insurance, it's still crucial for you to understand how insurance companies determine who is at fault—The driver responsible for causing the accident. This way, you'll know what to expect going forward.

The two insurance companies (of the two drivers) are responsible for analyzing the accident and determining which driver is at fault.

Please note that the insurance companies will always find someone at fault (there is no such thing as a "fault-less" accident).

The fault is gauged in percentage (From zero to a hundred percent).

Also, you need to be aware that both drivers can share faults.

Yes, you can either be found to be 100% at fault, 0% at fault, or partially at fault. Nevertheless, each result will have an impact on your insurance record. 

Why is fault determination so important?

Because almost all accidents that happen will result in damage to property or bodily harm.

By the end of the day, someone has to pay for those repair costs and medical bills.

In addition, fault determination also ensures the punishment of the driver found to be at fault (He or she has to be 25% more at fault than the other driver).

As mentioned earlier, punishment (penalty) usually occurs in the form of increased insurance premiums.

The insurance companies follow a set of rules decided by the law.

The Insurance Act has specifically issued "The Fault Determination Rules" for application in the fault determination process. These rules ensure that the fault determination process is fair and consistent. 

What is so special about The Fault Determination Rules?

These rules have taken into account more than 40 different accident scenarios. They even have diagrams, pictures, and illustrations to help map and check for similarities between the accident scenarios in the photos and the accident scene at hand.

It's also important to note that the rules are applied independently of the weather conditioners at the time of the accident, visibility, and interference by roadside pedestrians. 

What happens if the accident doesn't match any of the scenarios illustrated in The Fault Determination Rules?

In such a case, the degree of fault of each driver is determined by the rules of negligence law.
Do police charges/convictions influence fault determination?

Not necessarily.

The police can convict you for an offense, while at the same time, the insurance companies proclaim you "innocent" of any insurance faults.

The opposite is also possible.

Note: Did you know that when you lend out your automobile, you also pay out your insurance?

If the temporary driver is involved in a car accident and found at fault, the penalty will be recorded in your insurance books even if you weren't present at the time of the accident.
Can you dispute an unfavorable fault ruling?

You can follow up on the matter and seek clarification from the claim adjuster.

He or she is responsible for taking you through the fault determination process and explaining how "The Rules of Determination" were used in your case.

However, insurance companies will only revisit a fault ruling if additional information is provided.

In case of any irregularities, contact your company's complaint handler. 

Benefits of No-fault Insurance

Compensation is quickly issued to both drivers before fault determination. This reduces the waiting time on claims. It's a relief for the party dependent on his or her compensation for medical bills caused by the accident. 

Cons of No-Fault Insurance

Some people feel that the no-fault insurance system protects bad drivers since both parties will have to reimburse them for the claims paid to them by their insurance companies.

They feel that the insurance company of the driver at fault should be fully responsible for paying both claims.