What Does No Fault Insurance Mean?
Posted on Tuesday, January 16, 2018
No-Fault Insurance is one of the most misunderstood terms in insurance.
A common misconception is that it means that no one can be considered at-fault for a motor vehicle collision. However, that is not the case.
No-fault insurance was introduced in Ontario in 1990. The purpose of this legislation was to expedite access to treatment for victims who were injured in an automobile accident.
Before No-Fault Insurance, the insurance company of the at-fault party was responsible for payment of automobile claims. Unfortunately, this led to a lot of arguments, leaving people tied up in the court system. Many people who required treatment and couldn't afford it, had to wait until thier case was settled to gain access to the care they needed.
Now, with No-Fault Insurance legislation, every driver goes to his or her own insurance company to claim for damages, whether for auto repairs or Accident Benefits, which speeds up the payment of claims and ensures that no one has to wait long for repairs or treatment.
In terms of fault, this is still determined and is legislated in the Fault Determination Rules in Ontario. Fault is apportioned between drivers, which means you can be found to be anywhere from 0% to 100% at-fault for an accident. This information is used to determine which part of your auto policy responds to the loss, what (if any) deductible applies and the impact (if any) on your insurance premiums.
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