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article imageWhat drivers need to know about no-fault insurance

The term has little to do with who's at fault in an accident. Someone is always at fault. Fault is determined by an accident’s circumstances. If you rear-end someone, you are at fault. No matter what circumstances lead up to rear-end collision, the insurance company usually deem the person who did not leave a safe distance between cars at fault.
According to the Insurance Bureau of Canada (IBC), "No-fault insurance really means that if you are injured or your car is damaged in an accident, you deal with your own insurance company, regardless of who is at fault."
So how does that help keep insurance rates down? The expectation is no-fault insurance will hold down rates or at least keep them stable. Ontario never saw this drop, according to Trillium Automobile Dealers Association.
In theory, insurance companies can keep administration costs down by not sending cheques back and forth to each other and paying out only to their known clients. The lower administration and research expenses that are needed to determine if there are fraudulent claims from clients would be passed on to clients in the form of lower premiums.
But TADA says there has been systemic fraud from lawyers, rehabilitation centers, tow trucks and repair shops which have kept costs high and increasing in Ontario.
People with no fault insurance may still sue the at-fault driver for additional costs over medical and property paid out by an insurance provider. Payouts from insurers for direct damage to property are determined by charts or rules, but injury and medical is determined based on the extent of the injury.
Ontario's at-fault rules are government-regulated and can be found here.
For economic losses, death of a family member, loss of earning capacity, and health care expenses for more permanent injuries, an individual can sue an at-fault driver. There are strict rules on what one can sue for in Ontario as a way to ensure the no-fault insurance system limits payouts and lawsuits. You must meet the criteria for “permanent serious impairment of an important mental, physical or psychological function” to be allowed to sue.
Leonard Parker of Orillia, Ontario, said he twice claimed through his no-fault insurance when his car was written off. In one accident he was at fault, and one he was not present when a drunk driver hit his legally parked car.
So how long did it take to settle the at-fault accident claim compared to the non-at-fault claim?
“Four days settled the at-fault claim, two weeks for the drunk driver hitting my car,” he said.
Parker says his premiums increased with the second non-at-fault claim due to the number of claims now submitted.
CBC reports the current Liberal Government hopes to bring Ontario auto insurance premium rates down on average 15 percent in its next budget with some new regulations that will help limit claims and systemic fraud. Rates will still be higher if you have at-fault accidents or tickets.
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