Technically speaking, “no-fault” automobile insurance describes a system of insurance where an accident victim is injured or their car is damaged, and they make a claim to their own insurance company; regardless of who caused the accident. In Ontario, accident victims can make no-fault claims (also called “first party” claims) for property damage and accident benefits.[/caption]
Entitlement to Benefits Despite Causing the Accident
As an example, imagine a driver fails to stop at a stop sign, drives into an intersection, and gets into an accident with another vehicle causing damage to both vehicles and personal injuries to himself and the other driver. Assuming he has collision insurance, our driver – whom we’ll call Dennis – can make a property damage claim to his own auto insurance company to repair his vehicle. He can also make a claim to his insurer for accident benefits, which includes, among other things, payment for medical and rehabilitation expenses and income loss. Dennis is entitled to make these claims despite the fact that he caused the accident.
Being at Fault For An Accident Can Raise Your Insurance Premiums
No-fault insurance permits Dennis to make a claim for benefits, but Dennis is not completely off the hook, as insurance companies always determine who is at fault for an accident, whether partially or completely. After each party reports the accident to their insurance companies, their insurers will investigate the accident and make a determination as to who was at fault or responsible for the accident using the “fault determination rules”, which set out common accident scenarios and describe how to attribute fault in each scenario. Unless he has accident forgiveness as part of his policy, Dennis’ insurance premiums will likely go up when it is time to renew his policy. Next time Dennis is shopping for auto insurance, he’ll certainly remember to ask how an accident may affect his premiums (and you should too).
In addition to his premiums going up, Dennis is now exposed to a possible negligence claim for pain and suffering, loss of income and other damages brought by the driver he hit. Assuming he was not in breach of his policy and cooperates with his insurance company, the insurer will hire and pay for lawyers to defend him in this action, and the insurance company will ultimately pay the claim out, subject to the liability limits on Dennis’ policy.
In this lawsuit, the fault determination rules are irrelevant. The other driver’s lawyer will have to prove anew that Dennis was a negligent driver. Of course, under these circumstances, there is little doubt the accident was his fault. However, the other driver may have contributed to her own misfortune; she may have not been wearing a seat belt or had her signal on. If so, this is called “contributory negligence”. You can be sure that Dennis’s lawyers will do their utmost to find instances of contributory negligence, which would reduce the amount of money Dennis’ insurance company would have to pay the other driver.
In sum, no-fault insurance means that regardless of fault, an accident victim – even a person who causes an accident – may have access to certain benefits from their own insurance company. The issue of fault remains relevant both with respect to a person’s insurance premiums, and the rights of others to sue an at-fault driver for damages.