What is No-Fault Car Insurance?

No-fault insurance is a type of coverage whereby each person’s insurance coverage will pay for his or her injuries or damage – no matter who is deemed “at-fault.” Manitoba and Quebec are both no-fault provinces and Ontario works under a threshold system. The Insurance Brokers Association of Ontario (IBAO) website states that Ontario’s no-fault system “only applies up to a certain threshold of liability.” If the injuries you sustain are not considered permanent or serious then you will be paid out by your own insurance company.

You Are Not “Off the Hook”

The term “no-fault” is a bit misleading in this instance. Having no-fault insurance doesn’t mean you’re off the hook – it just means that each person will make a claim through his or her own insurance company. If you are found to be at-fault in an accident then it will go on your insurance record. When you go to renew your auto insurance you can expect to see more expensive premiums this time around. Sometimes it can take years to improve your premiums, even just to get them back to where they were, before you were found responsible for an accident.

How Much Liability Coverage Should I Get?

The Insurance Brokers Association of Ontario suggests that you purchase at least $1 million in liability insurance. If you are Canadian but you spend a lot of time driving in the United States then you will want to consider increasing your coverage. Settlements in the United States are typically more expensive so this is a good precaution. Higher coverage amounts should also be considered for those people that are car pooling or driving around a large group of children or adults. A good way to determine your liability coverage amounts is to speak with an insurance agent about your specific needs.

How is Blame Determined in an Accident?

There is always someone at-fault in a car accident and in some cases the insurance company will consider more than one driver negligent. Sometimes court action is the only way to resolve a dispute over responsibility of a collision.

If you have further information for the insurance company then they may reconsider their decision. For example, you might have forgotten to mention to the claims adjuster that there had been an eyewitness that had seen the accident. If you have contact information for the eyewitness then you can give that to the adjuster and they may review your case. Ask about the fault determination regulations used in your case and why they determined that you were responsible. If you still disagree with their ruling then you can contact the complaint officer at the insurance company to see what further steps might be available to you.

Other Things to Consider

  • When you buy insurance make sure to ask how an at-fault accident might affect your premiums.
  • It could take years to wipe the slate clean on your insurance record.
  • Practice safe driving no matter what type of insurance system you are under.
  • If someone borrows your car and gets in an accident then it will go on your insurance record if the driver of your car is deemed at-fault.
  • If you have two at-fault accidents in a five-year period then your insurance premiums will likely skyrocket.
  • Some people that have been driving for many years without an accident may be allowed one at-fault collision before their insurance premiums increase. Or their premiums may only slightly increase in price. Coverage increase increments will vary depending on your insurance company so ask before you renew your auto insurance.