Here in Ontario, our government chose to switch to what is known as no fault insurance. The term “no fault insurance” causes some confusion. New drivers may have the impression that it suggests there is no responsibility in the accident. However, in an accident, there is always responsibility. Someone is at fault; sometimes both parties involved in the collision.
If you’re in an accident, let’s say one on icy roads where the police officer reports no charges and the drivers were not at fault in the incident, that doesn’t mean your insurance provider will accept no fault.
Your insurance company will determine through Fault determination rules your degree of fault in an accident. That could be anywhere in between 1% and 100% responsibility.
The Ontario government could have have given a different name to the no fault insurance legislation and that might mitigate some of the misunderstandings.
No fault insurance rules affect your financial responsibility, level of premiums, level of benefits provided under your regular auto insurance policy.
When you’re involved in a collision, you will deal directly and immediately with your own insurance coverage provider. Before 1990, you had to pursue the at-fault driver for vehicle damage reports, along with health care and income replacement benefits. Having to wait until after a court case determined fault, or until the other driver’s insurance company paid your claim was a significant annoyance for some. You can read the fault determination rules here. If you feel your insurance company’s decision was unfair, you can appeal to them. If your insurer doesn’t alter their decision, you could choose to hire a lawyer and pursue the matter in court.
Will your benefits cover you?
Even if you were responsible for the collision, you would be able to receive benefits to certain limits.
If you are even 1% responsible, you will have an “at fault” accident on your insurance record. That may affect your premiums in the following year when you renew, depending on the conditions in your specific auto policy.
The intent of no fault insurance is to reduce the costs of auto insurance for all Ontario drivers and to encourage safer driving habits. Whether it is or can achieve these goals is still up for debate. US jurisdictions have discovered that no fault insurance did not reduce insurance rates.
It has reduced the waiting time inconvenience for receiving benefits and may have reduced costs for policing and court cases. Costs for medical treatment may have risen, since claimants don’t have to fight in courts to get money from the other driver’s insurance company. Some believe it raises rates because drivers may have less power to negotiate discounts on their insurance.
Coverage provided under a basic no fault insurance policy may not be sufficient to cover all your risks and potential needs. You may purchase extra coverage.
The minimum liability requirement is $200,000* however this may not be sufficient. Higher limits are recommended for your policy. Income replacement limits are set at 70% of your income*. For catastrophic injuries, your limit may be up to $1 million*. It’s important to discuss these limits with your insurance agent.
* The information provided above is believed to be accurate at this time, however it is intended for educational and informational purposes and may not be accurate and up to date. Please discuss actual limits and benefits with your insurance provider.
How do you get the lowest insurance rates and still be adequately covered? Calling us at Cornel Insurance Brokers is the best advice we can give. Our agents can discuss your specific insurance needs and match you up with the right insurance provider.
Contact us about insurance for students, insurance for couples and insurance for families, and business insurance. We’d like to help you get the best coverage at a reasonable price. Call direct at 1 888 471-3868.
The US implements no fault insurance a little differently. Here’s some interesting facts.