People often make the mistake of thinking that if they have no-fault car insurance that they will never be considered at fault in an accident. This simply isn’t true.
“No-fault” has a specific meaning in the insurance world. It actually relates to how a claim is paid, rather than to which driver is at fault. In a no-fault system, each driver deals with their own insurance company to make their claims, regardless of who caused the accident. This simplifies the claims process and ensures that when you are injured in a collision, you will receive compensation (such as for medical costs and lost earnings) from your own insurance regardless of fault. In some cases, such as in Quebec, the medical costs are handled separately through a government agency.
The advantage of a “No-fault” system is that it avoids long delays and litigation that would likely occur if you had to try to collect from the other party’s insurance company. Ultimately this means lower insurance costs when legal expenses are removed from the system.
Where is the Fault?
In a “no-fault” system, drivers are still assigned fault in car accidents. “Fault” is based on the laws and rules of the road which are overseen by police, and can even lead to criminal proceedings depending on the nature of the collision. Ultimately, insurance companies investigate and determine the degree of fault of each driver in a collision. It is also possible for the fault to be shared to some degree by both or all drivers involved.
The determination of fault will affect how the vehicle damages are compensated for under the policy and fault is applied to the driver’s record in future policy rating.
If you are found to be at some fault, there will be consequences, such as an increase in your insurance premiums. If you are found not to be at fault, the accident won’t typically affect your insurance premiums.
Various provinces have a no-fault system and some have a system that combines no-fault with some ability to take legal action after an accident. Contact your insurance broker for guidance to make sure you will be protected. But always remember that “no-fault” doesn’t mean that you will not be found at fault…so always drive safely!