No-fault insurance may sound too good to be true and as the adage goes – if it sounds too good to be true, it probably is. No-fault insurance is a more efficient way of handling auto claims. Let’s explore the fundamentals of No-fault insurance in Ontario.

What is no-fault insurance?

No-fault insurance in Ontario doesn’t mean that you can’t be found responsible for a car accident. You will face charges if you violate the law. In the past, each driver involved in an accident could argue against being at fault and having to pay for damages. This was costly for Ontarians and frustrating for drivers who just wanted to settle the claim for a payout.

With No-Fault Insurance, your insurance company will always take responsibility and pay for any damages and injuries to you, your car, and your passengers. This system allows insurance companies to focus on what’s most important: getting you and your vehicle back on the road.

How do we determine “fault” in Ontario?

Each insurance company will investigate the accident to determine fault. The Fault Determination Rules they will use are province-wide, and all insurance companies must use them. These regulations are laid out by the province’s Insurance Act.  As a driver in an accident, you can be found responsible anywhere from zero fault to 100% at fault.

How does no-fault insurance benefit me?

By only having to claim with your own insurance company, the claims process becomes simplified allowing for a claim settlement with lower administrative costs – which means premium savings for you!

Will my insurance premiums increase if I am found not at fault?

Several factors can affect the cost of your car insurance. However, if you are in an accident and not at fault, it won’t typically affect your premiums. You may lose a “claims-free discount” or Accident Forgiveness, but only if it was offered by your insurer, though.

What is accident forgiveness?

If you’ve been accident-free for the last 6 years (no at-fault or partially-at-fault accidents) and you have accident forgiveness coverage on your policy, insurers will “forgive” you for your first accident. It is a rider that good drivers can add to their car insurance policies to protect themselves from a rise in rates due to an at-fault accident. This means that when your policy renews, your premium won’t feel an impact from your at-fault accident.

What is the difference between no-fault and at-fault insurance?

In Ontario, your insurance company will handle your claim payout. In a traditional at-fault system, the driver found to be at fault would be responsible for paying for the damages to both drivers! Resolving and settling the damages could take months. The No-Fault system in Ontario allows everyone to receive compensation for their losses quickly. The purpose of No-Fault Insurance is to simplify the claims process because your insurer deals with your claim. Regardless of fault, you are entitled to compensation for your losses.

If you’re wondering about coverage and how your policy would respond in the event of an accident, connect with your isure broker today. Be sure to ask about common car insurance discounts that you may already qualify for.

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