Mon, 2012-11-05 10:05

Fault or No-Fault: What's the Difference?

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Fault or No-Fault: What's the Difference?

By Rick Doust, Insurance Bureau of Canada

Here’s a common myth: that no-fault auto insurance means no one is at fault. Not so. There are still fault-based rules of the road, enforced by police. If you are at-fault in a collision, your insurance premiums will be affected. Depending on the nature of the collision, you may be charged with an offence. These offences are governed by either provincial motor vehicle legislation or federal legislation such as the Criminal Code of Canada.

No-fault insurance exists to ensure that those injured in a collision receive compensation and benefits from their own insurance company, regardless of fault.

It’s designed to reduce the delays of an adversarial legal (or “tort”) system, and to provide treatment and benefits to injured victims as quickly as possible.

Most provinces in Canada have some form of no-fault accident benefits that are paid to all collision victims. The difference is the degree to which tort (the right to sue) or no-fault (access to accident benefits) is emphasized. For example, Quebec has a pure no-fault system that eliminates the right to sue, but provides substantial accident benefits. Ontario has a “hybrid” system, which blends no-fault and tort.

Saskatchewan and Manitoba have either pure or hybrid no-fault insurance systems. British Columbia, Alberta and the Atlantic provinces have tort-based systems. It is interesting to note that BC consistently has one of the highest incidences of highway injuries and fatalities of any province in Canada.

While some argue that a tort system provides a deterrent against poor driving behaviour, there is no correlation between the type of insurance system and the road safety record of the jurisdiction. There is no evidence that no-fault insurance leads to increased numbers of collisions or fatalities/injuries.

*This article was first published on the Insurance Bureau of Canada’s Get in the Know blog. To see the original post, click here or visit getintheknow.ibc.ca.