Understanding no-fault insurance

Like many others, Ontario drivers may be confused by the term “no-fault insurance.” It does not mean that a person who causes an accident pays no penalty. The term means that regardless of fault, the insured person will receive compensation no matter who caused themotor vehicle accident. However, the at-fault driver may face increased future premiums and a notation in his or her insurance record.

The main difference between no-fault insurance and other kinds of insurance is that the claimant deals with his or her own insurer. In most cases, an injured person would have to pursue the at-fault driver for compensation to pay for lost income, suffering and other benefits. With a no-fault insurance policy, an injured person will have instant access to compensation from his or her own insurance carrier.

After an auto accident, the insurance companies need to determine the percent of fault for each driver so that the drivers’ insurance premiums can be adjusted. In Ontario, this is done using government issued fault determination rules. Depending on the circumstances of the accident, more than one driver may share responsibility.

A personal injury lawyer might help an injured person in the event that there is a dispute about a driver’s responsibility in an accident. In most cases, a settlement can be reached by way of negotiation with the insurance companies. However, if there is any dispute about who is at fault, the case might require litigation.

If the case moves forward into the litigation phase, the lawyer may present accident photos, expert testimony and eyewitness testimony to support the claim that the defendant is at fault for the collision in court. If the jury is convinced, it may decide to award compensation to the plaintiff.

Source: Insurance Bureau of Canada, “No-fault Insurance: What’s it All About?“, July 21, 2014