Have you ever heard the term “no-fault insurance” and wondered what it meant? How can an accident be no one’s fault? And if it’s no one’s fault, who is responsible for the damages? The truth is, there are a lot of misconceptions when it comes to no-fault car insurance in Ontario. A lot of people don’t really understand what it means. That’s where we come in! Keep reading to learn what at-fault insurance means in Ontario and how it can affect you.
What is no-fault insurance?
The term “no fault insurance” can be a bit misleading in Ontario. It doesn’t mean that no one is at-fault or responsible for an accident. No-fault insurance in Ontario means all drivers involved in an accident deal with their own insurance companies no matter who caused the accident. If you need to file a claim, you’ll do so with your own insurance company, no matter what the circumstances of the accident are. Depending on the policy you have, your insurance company may cover costs like repairs, medical bills and legal fees.
The Ontario provincial government introduced no-fault insurance in 1990. Prior to that, if an accident took place, it often led to a long and drawn-out process to determine who would pay for the damages. People who experienced damages or injuries would have to wait months to receive compensation.
Despite the name, insurance companies will still determine who was at-fault in an accident. The person who caused the accident may see their insurance premium increase (e.g. they may have purchased accident forgiveness coverage). If you are not at-fault, you likely won’t see an increase in your premium.
How do insurance companies determine fault?
At-fault insurance in Ontario means you will deal with your own insurance company when it comes to filing a claim and getting compensation for damages. However, the insurance companies involved will still need to determine who was at-fault if an accident occurs. The person or people responsible for the accident will have that noted on their insurance record.
Insurance companies have claims experts who are experienced in figuring out who is at-fault. There are a set of rules they must follow, called the Insurance Fault and Determination Rules (We suggest reading these rules if you ever have a hard time falling asleep.)
Insurance companies use diagrams, police reports, weather reports, witness testimonies, the point of impact of the vehicles and more, to determine who is at-fault in an accident in Ontario.
Sometimes, more than one person is at-fault in a car accident. According to the Financial Services Regulatory Authority of Ontario (FSRA), which is the body that regulates insurance in Ontario, you can be anywhere from zero to 100 per cent at-fault in an accident. If you are determined to be at-fault, you will most likely see an increase in your insurance rates.
Common myths about at-fault insurance in Ontario
There are many misconceptions when it comes to at-fault insurance in Ontario. Even though it simply refers to the process of dealing with your insurance company after an accident, people often confuse it with actual coverage you can purchase, such as accident forgiveness.
Here are a few of the most common myths about at-fault insurance in Ontario.
|No-fault insurance means no one is to blame for an accident.
||No-fault insurance in Ontario simply means if there is an accident, people deal with their insurance company directly, regardless of who is at-fault. In the event of an accident, insurance companies will determine who was at fault. Whoever is at-fault will likely see an increase in their premium. Keep in mind that more than one person could be at-fault.
|No-fault means the accident will not go on your insurance record.
||If you caused an accident, it will go on your insurance record.
|No-fault means the insurance company will not try to determine who caused an accident.
||An insurance company will always determine who was at-fault in an accident.
Did you know? No-fault insurance in Ontario helps keep insurance premiums down by discouraging costly legal battles.
Benefits of no-fault insurance in Ontario
The main benefit of no-fault insurance is simplicity! If you are involved in an accident, you don’t have to deal with the added stress of tracking down someone else’s insurance company or filing a lawsuit to be compensated for damages. Simply contact your insurance company and they’ll take care of everything.
Another benefit of no-fault insurance in Ontario is you’ll receive compensation faster. No need to wait for the insurance companies or the courts to determine who is at-fault.
Get in touch with BrokerLink for the right insurance
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FAQs about No-Fault Insurance in Ontario
Do insurance rates go up after a no-fault accident in Ontario?
No-fault insurance in Ontario means you deal with your insurance company directly, regardless of who caused the accident. If you are determined to be at-fault, you may see in increase in your rates. Ask a broker about adding Accident Forgiveness coverage to your policy.
Do I have to pay deductible if I was not at-fault in Ontario?
If you were not at-fault, you do not have to pay your deductible.
Who pays in a no-fault accident in Ontario?
If you’re involved in a no-fault accident, you will be compensated by your own insurance company as long as you have the right coverage.