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Understanding No Fault Insurance in Canada

Ontario operates under a no-fault auto insurance system. So do several other Canadian provinces. Does that mean no one is responsible when car accidents occur in provinces with no fault insurance? 


no fault insurance

The term “no fault” auto insurance is confusing. People who’ve been seriously hurt in a vehicle accident may mistakenly believe “no fault” means no one is to blame, so they aren’t entitled to financial compensation.  


No fault insurance doesn’t mean no one is at fault or no one is responsible. Instead, it means that you deal with your own insurer to get coverage for your injuries and losses, irrespective of fault for the car accident. Let’s have a look at how the no fault insurance system works. 


How does no fault insurance work in Canada? 


To understand how no-fault insurance works, it’s helpful to first know about the alternative: a fault-based automobile insurance system.  


Under a fault-based system, when two vehicles are involved in a crash, the drivers’ respective insurance companies fight with each other over who was at fault, and to what degree, as that determines which company pays the claim(s) and how much. While the insurance companies are battling it out, the people hurt in the accident are stuck waiting to find out if their claim will be paid. That is certainly not ideal when you need prompt medical care, have mounting rehabilitation and treatment expenses, and are missing work due to your injuries.  


Compare that to the no fault system: in the provinces that have adopted no fault insurance—including Ontario—each person injured in a car accident makes a claim to their own insurance company for coverage for damages and injuries, regardless of who caused the accident. The no fault insurance system speeds up the time it takes to pay out claims for medical bills, income loss, etc. because it eliminates the back-and-forth battle to determine fault that would otherwise be necessary between insurance companies.  


Another key benefit of the no fault insurance system is that it lessens the costs associated with having to sue an at-fault driver in court to get compensation (though as you will see below, sometimes legal action in court is necessary to get full and fair compensation).  


What are no fault accident benefits?  


As an Ontario resident, you’ve likely heard of no-fault accident benefits. How do these benefits fit with what we just discussed? No-fault accident benefits are a key component of the insurance system in our province. These are mandatory benefits that a person hurt in a car accident can claim, no matter who caused the accident. In fact, an injured person is entitled to no-fault accident benefits even if they were 100% responsible for the crash that caused their injuries. Drivers, passengers, pedestrians, and cyclists are entitled to claim no fault benefits, as are those who’ve been hurt in a snowmobile, ATV, or motorcycle accident.  


No fault accident benefits, which are also known as Statutory Accident Benefits or “SABS” in Ontario, help cover out-of-pocket medical expenses (psychological treatments, physiotherapy, chiropractic treatments, massage therapy, exercise therapy and programs, gym memberships, etc.), housekeeping expenses, childcare expenses, income replacement for wages lost as a result of the accident injuries, and other costs associated with injuries sustained in the accident. 


Does that mean you don’t need a personal injury lawyer?  


You can navigate the insurance process on your own, but there are many reasons to have a personal injury lawyer on your side:  

  • The insurance claim process, paperwork, and legislation are complicated.  

  • There are tight deadlines that must be met to make a claim.  

  • Insurance companies are notoriously difficult to deal with. Insurance company representatives are supposed to be serving you as the customer, but the truth is that their primary goal is to protect the company’s bottom line. They want to get your claim off their books as quickly as possible, while paying as little as possible.  

  • Insurance companies are not obligated to tell you about all of the types of compensation and treatments you’re entitled to.  

  • Insurance companies often try to pressure accident victims to accept early settlement offers, before knowing how injuries will heal, and without knowing if they’ll cause life-long impairments.  

  • The insurance company may wrongfully deny or unfairly delay paying accident benefits.  


Our personal injury lawyers in Sault Ste Marie have a proven track record of standing up to auto insurance companies. We ensure our clients are treated fairly, and we have successfully negotiated resolution of claims—some in the millions of dollars for individuals who are entirely at fault for the accident. 


A personal injury lawyer from our law firm can review your case, advise you of all your legal rights and options, and ensure claim deadlines aren’t missed. We can push back against delay, evaluate the fairness of any settlement offers, and negotiate aggressively on your behalf to get the compensation you deserve.  


Does that mean you can’t bring a car accident lawsuit in Ontario? 


The no fault insurance system is intended to reduce the need for personal injury lawsuits, but it does not eliminate your right to dispute a rejection by your Insurance Company for no-fault benefits if you’ve been hurt in a car accident. It may be necessary to bring an application to the Licensing Appeals Tribunal ( LAT ) when your insurance company is being unreasonable or have wrongfully denied your no-fault accident benefits claim.  

In addition, if the car accident caused severe injuries or permanent injuries,  including serious connective tissue injuries ( whiplash ) , fractures , brain injury, psychological impairment,  death  or other serious  injuries, it may be necessary to sue the at-fault driver so you get awarded damages for pain and suffering, loss of earning capacity, housekeeping/home maintenance, caregiving , attendant care and  future Care costs beyond 5 years for which your own Insurance Company is responsible or other types of damages that aren’t available in a no-fault accident benefits claim.  


CONSULT WITH A CAR ACCIDENT LAWYER IN SAULT STE. MARIE 


If you’ve been hurt in a car crash, your injuries and the complications they cause in your life can quickly become overwhelming. Navigating the no fault insurance system can add to your stress level. Why go it alone when you can trust the Feifel Gualazzi team to take care of all the details?  


Our dedicated personal injury lawyers specialize in helping car accident victims like you get the full range of financial support you need. If you’re in or near Sault Ste. Marie, contact us today to schedule a free consultation with a personal injury lawyer at our law firm and find out if you have a case! 

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