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What is No-Fault Insurance in Canada ?

Oddly enough, no-fault insurance almost makes it sound like you’re not responsible for the accident. However, it’s more about the general insurance claim process rather than reducing the blame against either party.

In simple terms, this policy was created to overcome the expensive and frustrating process of hiring a lawyer to deal with a claim after a collision. Instead, the insurance company will compensate for any damages or injuries that may have occurred in the accident. This depends on certain conditions, which you can find out below.

What is Covered with No-Fault Insurance?

No-fault insurance comes with four critical components that make the claim process much easier than if you weren’t to have it:

  • If you cause an accident, third-party liability insurance will cover the damage done to the other persons’ property and their medical bills.
  • If an uninsured motorist causes an accident or attempts a hit-and-run on you, damages are done to your property, and medical bills will be covered.
  • Within No-fault insurance, they also offer accident benefits coverage. After your accident, if you need to see a physiotherapist, your insurer will cover all costs if the treatment is required because of the accident.
  • Lastly is direct compensation property damage or also known as DCPD. This automatically covers all your repair bills after an accident, even if it’s not your fault, instead of going around in circles and finding a lawyer to file a claim against the motorist that caused the accident. This policy will pay you out without having to go through all the hassle.

Common Misconceptions for No-Fault Insurance

Many drivers misunderstand what no-fault insurance entails, and I can see why because of the name.

The first misconception people have about No-Fault insurance is that nobody will be at fault for the accident. This couldn’t be more false. Both the police and insurance company will conduct a crash determination test. The test identifies who was the likely candidate that caused the accident.

Secondly, people also believe that no one will be to blame for the accident. As suggested above, both the insurer and police will conduct a crash determination test to identify the person responsible for the crash. If it’s you, the likelihood of your no-fault compensation being lower than if it wasn’t is very high.

Lastly, people also believe that it’ll also not go on your driving record because no one is to blame. All accidents reported to the police or the insurer will forever be recorded whether you’re responsible for the accident or not.

Because of the misleading name given to this insurance type, it’s clear to see why people believe these conceptions. However, don’t fool for this!

Being part of a no-fault insurer, they’ll do the following:

  • Manage and handle your claims
  • Pay-out for damages done to your property
  • Pay for any medical bills that have occurred because of the crash (including therapy).
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Jean-Maximilien is an expert in Canada and France about Loyalty programs, Credit cards and Travel. He is the Founding President of Milesopedia.

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