Fault Still Exists With No-Fault Car Insurance

The term no-fault insurance is widely used, but many motorists don’t completely understand what it means. Although we’d all like to be exonerated of fault, fault always finds at least one driver an any collision.

These are common questions in a no-fault insurance environment. Many people remain confused about how the system works, how fault is assigned, and how compensation is handled. We’ll cover these and other issues below.

Fundamentals Of No-Fault Auto Insurance

This form of insurance system is improperly named. Whenever an auto accident occurs, insurers assign fault, even in cases where a single driver is involved (e.g. driving into a ditch). Fault is usually assigned as a percentage, and may be split among several parties. Given this, what does “no-fault” actually mean?

Rather than the involved parties seeking compensation for injuries and property damage from the at-fault driver’s insurance company, they do so through their own insurers. This is believed to be a more efficient process. Each driver gains quicker access to accident benefits, which can be used to pay for medical treatment and rehabilitation as well as auto repairs.

As noted earlier, this does not imply that all drivers involved in the accident are free of blame. This doesn’t imply that nobody’s insurance rates will increase. These details are addressed by the province’s fault determination rules.

Fault Determination Rules And Their Effect On Your Rates

In provinces that maintain a no-fault insurance system, there are clearly-defined rules that dictate where culpability lies. Each auto insurer in a given province adheres to the same set of rules, making fault determination simpler. These rules account for the most common scenarios, including circumstances surrounding each event.

For example, Ontario’s fault determination rules describe a scenario in which two cars are traveling in the same direction, and in the same lane. One vehicle is struck from behind by the other. Here, the rules specify that if the first car is moving forward or stopped, the driver of the second car is 100 percent at fault. This conclusion may seem intuitive, but many situations are less clear. Fault determination rules spell out scenarios in order to eliminate ambiguity.

This assists auto insurance companies in adjusting the rates of motorists. If you are involved in an accident caused by another driver, your rates should remain at their present level. The other driver’s rates would likely increase to reflect the accident. Should you be involved in a car accident where both drivers are assigned blame, one can expect both drivers to suffer a rate increase.

Filing A Lawsuit In A No-Fault Environment

Given how no-fault car insurance works, there seems to be no reason to sue at-fault parties for compensation for injuries and property damage. After all, drivers have quick access to accident benefits through their own insurers. The problem is, costs related to medical care, rehabilitation, and car and property repairs may exceed the accident benefits of the at-fault driver’s coverage. A lawsuit is always an option in this circumstance.

Not all provinces give drivers the right to sue, and when the right to do so is available, limits usually apply. Manitoba and Quebec each maintain a “pure” no-fault insurance environment, and thus do not allow drivers to sue for additional accident benefits. By contrast, British Columbia and Nunavut do allow it. Other provinces maintain limited no-fault systems, and allow motorists to sue as long as certain conditions are met.

The discussion thus far may appear to suggest that auto insurers work by the same rules, and therefore extend the same rates to all policyholders. In reality, premiums continue to vary across a wide range. Comparison shopping for insurance quotes is always worth a small time investment. Only then should you choose a company from which to purchase coverage.

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Created on May 14th 2020 03:10. Viewed 234 times.

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