No-Fault Insurance And How It Works In Ontario

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.

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 :

• Compensation : All parties involved in an accident are entitled to compensation for damages and injuries.
• Payment : Payouts happen immediately through your insurer.
• Process : You deal directly with your insurance company for claims.
• Claims : The claims process is quick. You don’t have to wait for a fault determination to be made in order to get compensation.
• No court : No need to sue for compensation.
• Limits : There are limits to the amount of compensation paid out to accident victims.
• Rates : The at-fault driver will likely see an increase on their next car insurance quote.

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 :

• Accident benefits : You receive health care and rehabilitation expenses post-accident.
• Direct compensation property damage (DCPD) : Under DCPD, you receive compensation for damage to your vehicle and loss of contents.
• Protection from uninsured drivers : You receive compensation when involved in an accident with an uninsured motorist.

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.