If you’ve ever been in an auto accident, then you may be wondering how fault is determined when filing an insurance claim. Determining who was at fault following an accident might seem simple, but it’s usually far more complex than you think. Keep reading to learn more about what to do if you are in a car accident, how fault is determined, and how no-fault insurance works in Ontario.
What is an at-fault accident?
An at-fault accident occurs when there is a car accident involving two or more cars. In such a scenario, investigators must determine whether one driver was more at fault for the accident than the other. This is vital as whichever driver is deemed to be at fault may be on the hook for financially compensating anyone else impacted by the accident.
In Ontario, a driver is considered to be at fault if they are found to be more than 50% responsible for the accident, assuming the accident involved two vehicles. If the accident involved more than two vehicles, then the threshold for liability may be lower. Examples of common car accidents in which fault must be determined are as follows:
- A fender bender accident caused by a driver driving over the speed limit
- A head-on collision caused by a distracted driver who was checking their phone
- A broadside accident caused by an intoxicated driver
What is shared liability?
Shared liability is another term that often comes up in relation to at-fault accidents. Since more car accidents are far from straightforward, it’s possible for more than one driver to be found liable. When two or more people involved in a car accident share fault, it is referred to as shared liability.
Ontario’s no-fault car insurance system
Ontario is just one of several Canadian provinces that employs a no-fault car insurance system. This means that no matter who is found liable for the accident, all drivers involved deal directly with their own insurance company. No-fault insurance was introduced in Ontario in 1990 as a way of minimizing the long, drawn-out insurance process that often involved one party having to deal with another party’s insurance company following an accident.
Note that despite the name, Ontario’s no-fault car insurance system does not mean that no one was at fault for the accident. Rather, accident investigators are still tasked with assigning fault in an accident. It is these determinations that ultimately impact how much money each accident victim is entitled to receive and how much money a policyholder must pay following an accident.
Who is responsible for determining fault in an accident?
After an accident, there is a team of people who are generally tasked with determining fault. The most common people who are asked to determine fault are as follows:
- The insurance companies of those involved in the accident (their adjusters and appraisers)
- The police officers investigating the car accident
- The attorneys representing the people injured in the car accident
- A jury ruling on a lawsuit that was filed in relation to the car accident (if applicable)
It’s worth noting that insurance companies often have the biggest say when it comes to assigning fault. This is because their findings often dictate which party is responsible for financially compensating the victim(s) for various expenses, including medical and repair bills.
How fault is determined
Understanding how fault is determined following an accident is crucial, especially when you consider that the at-fault driver could be on the hook for paying the damages. Below, we outline the methods used to determine fault after a car accident:
The police report
Reporting a car accident to the police is one of the first steps you should take after you are involved in a collision. In fact, you might even have to report a car accident in Ontario depending on the circumstances. However, even if it’s not a legal requirement, it’s still a good idea. When you report a car accident to the authorities, a police officer should arrive on the scene shortly thereafter. They will create a police car accident report, which is a document containing details about the collision, including witness statements and photos. This document will also contain the policy offer’s interpretation of who was at fault for the accident. For example, if one driver was speeding or ran a red light while the other was obeying the rules of the road, this will be noted, which can subsequently be used to determine fault.
The insurance company's findings
Following an accident, each party’s insurance company will hire insurance adjusters to conduct an independent investigation to determine fault. Based on the behaviour of the drivers, each insurance company will assign each party a percentage of fault. For example, if there were two drivers involved in the crash and both were speeding, but one was driving 20 km/hour over the speed limit and the other was only driving 10 km/hour over the speed limit, the driver going 20 km/hour over would likely be assigned a higher percentage of fault. The percentage of fault would also be assigned based on other circumstances surrounding the accident, such as local laws. For example, in Ontario, texting and driving is illegal, so if one of the drivers was found guilty of an illegal act like texting and driving, this would also be considered when determining fault. Ultimately, each insurance company’s findings will play a major role in how fault is determined following an accident.
Please note that when trying to determine fault after an accident in Ontario, your insurance company must use the Fault Determination Rules published in Ontario’s Insurance Act. In accordance with the Financial Services Commission of Ontario, once a policyholder reports a vehicle collision, it is the insurance company’s duty to investigate the circumstances surrounding the accident and then make a fault determination using Ontario’s Fault Determination Rules.
An attorney’s advice
One last way that fault may be partially determined is with help from an attorney. If the drivers involved cannot reach an agreement based on the insurance adjusters’ findings, the drivers are within their rights to seek legal advice from an attorney. An attorney can provide legal advice on the matter and help you fight to be assigned less fault and therefore receive more compensation. However, if an agreement between the insurance companies and the attorneys cannot be reached, the issue could go to court, where a jury will ultimately decide.
Factors impacting fault in Canada
There are several factors that can influence the way that fault is determined in Canada. Read more about each below:
Provincial regulations around no-fault insurance
The degree to which the province you reside in is no-fault varies and can impact how fault is determined. Even though Ontario, British Columbia, and more have no-fault insurance systems, meaning that no matter who is found to be at fault for the accident, drivers deal with their own insurance companies, there are a few exceptions. For example, despite having no-fault insurance, drivers in some circumstances can sue for economic losses that are above the threshold set by the province. Manitoba and Quebec have the only true no-fault insurance systems, where under no circumstances are drivers allowed to sue another driver, or their insurance provider, for personal injury in the form of economic losses or pain and suffering.
Pure contributory negligence
Provinces have different pure contributory negligence laws, which also impacts fault. Contributory negligence is the percentage of fault ascribed to the plaintiff’s own actions. In other words, it is the extent to which the plaintiff was at fault for the injuries that ensued. In some provinces, such as Ontario, if you bear any liability for a car accident, you cannot recoup any compensation, which means your only option is to file an insurance claim with your own insurance provider.
What types of compensation are available to accident victims in Canada?
If you are in a car accident anywhere in Canada, such as in Ontario, and it resulted in bodily injury or property damage, you might be able to obtain compensation through your insurance coverage. The amount that you are compensated and through which part of your policy will depend on the circumstances surrounding the collision and what type of insurance coverage you have. Below is a list of ways that accident victims are most commonly compensated by car insurance coverage in Canada:
Accident benefits
Accident benefits is a form of mandatory car insurance coverage, and it can compensate policyholders if they sustain an injury following an accident. Specifically, it can cover medical expenses not covered by our health insurance, such as prescription medications, rehabilitation, or physical therapy. It can also cover income replacement if your injury prevents you from working. Accident benefits may come into play no matter which driver was found to be at fault for the accident.
Direct compensation - property damage
Direct compensation - property damage coverage can also provide you with compensation following a car accident. However, in this case, you will be compensated for any applicable vehicle repairs or replacement costs. The amount of money your insurance company will reimburse you for will likely depend on the percentage that you were found to be at fault for the accident. Direct compensation - property damage coverage is always claimed directly through your insurer.
Third party liability
Third party liability insurance is one final type of compensation you may receive as the victim of a collision. This type of compensation is usually granted to a person who was injured in an accident as a result of a lawsuit filed against the at-fault driver. In addition to this, if your car insurance coverage contains third party liability insurance (and it should, since it is a mandatory component of car insurance in Canada), then your coverage should also help pay for legal fees, including defence and settlement fees, if the lawsuit is brought against you. Unlike accident benefits coverage and direct compensation - property damage coverage listed above, third party liability coverage will only be awarded to an accident victim under someone else’s insurance coverage. Lastly, with liability coverage, the amount you receive will be directly proportional to how at fault you are found to be. The compensation you are entitled to will likely be reduced by how at fault you are deemed to be for the accident.
Ways to keep insurance rates low following a car accident
Many drivers wonder how an accident affects car insurance rates. The reality is that an accident, especially an at-fault accident, can lead to an increase in your insurance premium. This reality can be a difficult one to swallow, especially if you are on a tight budget and want to keep car insurance rates low. Thankfully, there are a couple of steps you can take to minimize how much your insurance rates increase following a car accident. Check them out below:
Enrol in an approved driving program in your province
The first way that you can reduce your insurance premium if it increases after a collision is by enrolling in and graduating from an approved driver’s education course. There are all kinds of approved driver’s training programs, including defensive driving programs, that can lower your policy premium in subsequent years. If you attend such a program and can show proof that you graduated, you might be eligible for a driving school certificate insurance discount. Insurance companies will appreciate the effort you went to and will feel more confident in your driving skills if you can prove that you completed a driving course taught by a professional. They will see you as less of a risk and may be willing to lower your rates.
Add accident forgiveness coverage to your auto insurance policy
Another way to keep insurance rates low after a car accident is to update your policy so that it includes accident forgiveness coverage. Adding accident forgiveness coverage to your policy prohibits an insurance provider from increasing your rates after your first at-fault accident. Accident forgiveness is a type of optional coverage that can be added to your car insurance policy as an endorsement, to protect your driving record and to help prevent your insurance premium from increasing if you have an at-fault accident claim. Note: coverage varies by province.
A step-by-step guide to filing an auto insurance claim with your insurance company
If you got into a car accident, then it might be time to file an insurance claim with your insurer. Note that calling your insurance company after a minor car accident is just as important as a major one. Further, if you don’t report a car accident, you could be in breach of the law. Plus, you may be missing important evidence, such as a police report, that can help you with your claim. Read through the list below to learn how to file an auto insurance claim:
- Call the local authorities to report the car accident.
- Contact your auto insurance provider or insurance broker as soon as possible following the accident.
- Gather the necessary documents and information about the accident and send it to your insurance agent or broker. Examples of key documentation include photos and videos of the scene, as well as information about the other drivers involved (name, address, phone number, driver’s licence number, licence plate number, etc.), as well as information about anyone else involved in the accident or any witnesses.
- Submit a claim with your insurance company (which can usually be done online) and be prepared to answer a few questions about the accident from the insurance adjuster assigned to your case.
- Obtain an estimate from an auto body shop for the cost of any applicable vehicle damage and repairs, if necessary.
- Locate an auto body shop near you or make an appointment at the one that your insurance company recommends and schedule the repairs.
- Close the claim and receive compensation from your provider, if applicable.
How long does it take to file an auto insurance claim following an accident?
The process of filing an auto insurance claim is relatively straightforward and nowadays, can be completed online from the comfort of your home. Therefore, it does not take long. In fact, the entire process may take between 15 and 60 minutes. It will go even quicker if you enlist the help of a licenced insurance broker who can walk you through the entire process. Once the claim is filed, you will likely need to answer some questions from an insurance adjuster, which shouldn’t take too long either. Next, is the longer wait during which the insurance adjuster conducts the investigation. You should expect to hear from your insurance provider in the month following your claim. We recommend asking upfront how long the claims process takes as it varies between insurance providers and times of the year.
What causes an auto insurance claim to be denied?
If you are preparing to file a claim following an auto accident, then you might be concerned about the odds of your claim being denied. Unfortunately, there are some cases in which car insurance claims are denied by insurance companies. However, if you know what causes a claim to be refused, you will have a better idea of whether your claim is likely to be accepted or rejected prior to submitting it. A few of the most common reasons that auto insurance claims are denied in Canada are as follows:
- The policyholder provided misleading or false information in their claim
- There was an unauthorized person driving the car at the time of the accident
- The policyholder was using their personal vehicle for business purposes at the time of the accident
- The car was being driven by someone impaired or under the influence of substances at the time of the accident
- The policyholder committed an illegal act, which is what caused the accident
- The policyholder has failed to make their insurance payments
- The policyholder does not have adequate insurance coverage (i.e. they are underinsured or uninsured)
Contact BrokerLink to learn more about how fault is determined in auto insurance accidents
If you are ready to learn more about how fault is determined for auto insurance in Canada, including whether fault can be shared, contact BrokerLink today. We know car insurance like the back of our hands, meaning we can explain any aspect of it, including how fault is calculated by insurance companies. More than that, we can help you find a brand new car insurance Toronto policy, renew an existing policy, or answer questions, like “Does insurance cover for towing?” Whatever your car insurance questions, we’ve got answers. Contact us today to speak with a licenced broker or request a free auto insurance quote. BrokerLink can be reached by phone, email, or at any of our 200+ locations across Canada. We can’t wait to meet you and help you on your car insurance journey!
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