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The no-fault insurance system has been adopted in Ontario and many provinces across Canada to help simplify the claims process. Let’s be clear about one thing, it does not mean you won’t be found at-fault if you are involved in an accident. Since you deal solely with your insurer, the claims process is quicker, and you are paid out for losses almost immediately. There is also no need to go to court and sue the at-fault drivers for compensation, saving you time and the hassle of escalating court proceedings.
No-fault insurance (also known as the Ontario Motorist Protection Plan) is a system outlining how claims are handled by insurers and simplify the claims process for drivers involved in a collision. No-fault means that, regardless of who is at fault for an accident, each driver’s insurer will handle their claim.
Prior to 1989, this system did not exist. It was introduced to offset the issue of growing liability costs - those making an insurance claim often had to place multiple claims from an accident. This caused issues with drivers, small municipalities and charities. In September 1989, following extensive research and consultation, the government announced its intention to introduce it - no-fault insurance came into effect June 22, 1990. A variety of reforms to the system have been introduced over the years to address new issues, such as insurance fraud.
Ontario does have a no-fault system in place to help determine fault in the case of an automobile accident. If you are injured or your vehicle is damaged, you will deal directly with your provider regardless of who is at fault.
No-fault insurance is built into all basic Ontario car insurance policies. If you are insured, you don’t need to speak to a provider to add it to your policy, it is added automatically.
The term applies to the process of how each person will handle their claim. Someone will always be fully or partially to blame, and it is the insurer’s responsibility to determine each person’s risk to determine how policies will be impacted. This happens by each driver taking a percentage of the fault – known as Fault Determination Rules. Insurers will use these guidelines when examining a scenario by referencing the rules and fault to each party involved with the factual circumstances of the event. Fault will not affect the eventual payout of the claim, if the policy will cover damage caused by the accident.
Many Ontario drivers misunderstand what the term “no-fault” means and how it impacts their policy.
Misconception 1 : You will not be found to be at-fault if you are involved in an accident.
Misconception 2 : If no one is to blame for an accident your insurer will not determine who caused it.
Misconception 3 : After an accident, a no-fault accident will not go on your driving record.
These misconceptions are false. Despite the misleading name, insurers will always investigate a claim to determine who was responsible according to the Ontario Insurance Act. You may be found to be fully, partially, or share fault with the other driver.
As part of the no-fault system, your insurer will handle all aspects of the claim and reparations. They will :
The main reason why no-fault benefits drivers is that it simplifies and speeds up the process of submitting claims. Here are some of the other benefits of the no-fault system for Ontario drivers :
Despite the benefits to the system, some drivers oppose no-fault claiming that it protects hazardous drivers because the injured person’s insurer must pay for repairs even though their driver was not accountable.
Under the Ontario no-fault system, you will deal directly and be paid out by your insurer for all types of coverage claims, including :
Whether you are found to be at fault or not for an accident, your insurer will pay out the claim. You deal directly with your provider for all accident claim payments.
If you are deemed to be at-fault, and you have collision coverage, you’ll have to pay the deductible to repair damage to your automobile before your provider pays. Your will likely see an increase, unless you have extra protection such as accident forgiveness. It will also stay on your driving record for up to six years. If you are not at-fault, you will likely not see any increase on your policy cost from the claim.
No-fault insurance is meant to simplify the car insurance claims process and speed up paying compensation to drivers involved in accidents.
Other than Ontario, there are four additional provinces that have a the system in place, including :
The
Alberta car insurance system uses a variation of the no-fault system. Drivers get compensation from their own insurers, but only moderate amounts. Other provinces in Canada have some form of no-fault, but how it works varies by province.
No-Fault Insurance And How It Works In Ontario
Jun 14, 2021
What You Need To Know About No-Fault Insurance
What Is No-Fault Insurance?
Why Was No-Fault Introduced?
Does Ontario Have No-Fault Insurance?
Is No-Fault Insurance Mandatory In Ontario?
How Does No-Fault Insurance Work?
Common Misconceptions About No-Fault Insurance
What Are The Benefits Of No-Fault Insurance?
What Is Covered Under No-Fault Insurance?
How Does A No-Fault Claim Affect My Insurance?
No-Fault Insurance FAQs
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