Understanding The No-Fault Principle Vehicle Insurance

January 3, 2018 · Posted in General Articles on Car Insurance 

With the no-fault principle vehicle insurance, the insured is under an insurance contract which stipulates that indemnification is not based on who was at fault. This is possible because the insured gets compensation from his insurance company. This type of insurance was mainly introduced to deal with long litigation processes trying to determine who was at fault and reducing premiums. With the introduction of this principle, simplicity was introduced assuring motorists could get quick payment for injuries.

However, this insurance type does not offer the same level of justice as presented in normal cases of plaintiffs and defendants in common law practices. It offers level justice for anyone who might be involved in vehicle accidents. The main advantage is prompt justice especially when considered on an economic level.

One distinct property of the no-fault principle vehicle insurance is that it does not prevent the aggrieved parties from taking legal action against the defendant in order to recover additional amounts. However, the provision to sue is influenced by various factors key among them being the province where the accident occurred. In addition, certain requirement regarding the case must also be fulfilled. Normally, major disfigurement, monetary threshold and death are the major considerations. However, you should realize that it is possible to sue for economic loss but not pain and suffering in some provinces.

Although elimination of compensation delays is one of the main advantages of the principle, this was not the major consideration when it was set up in some regions in Canada such as Saskatchewan. The main aim was to trend back then, when only a small percentage of motorists carried liability insurance.

Before you go for this type of insurance cover, there are certain things you should have in mind. First, you should realize that the term no-fault does not mean that you will never be at fault when an accident occurs. Insurance companies have to find someone at-fault fully or partly whenever an accident occurs.

The second thing is that when one is found at-fault, the occurrence is noted in your personal insurance records. This has a direct effect of hiking your insurance premiums since the insurer now classifies you as a higher risk.

One of the best things though about no-fault vehicle insurance is the standardization of the rules in fault assigning within a province. This means that all insurers use the same standards. However, different provinces apply different standards. A good example is that if you rear-end another car on an icy Ontario road, you will be at fault. This is because the fault determination rules in Ontario stipulate that drivers should consider road conditions while driving.

The fault percentage applied with this insurance is used to determine the amount of deductibles you have to pay. Motorists should also note that although not all provinces use No-Fault Principle auto Insurance, all provinces have a certain level of no fault accident benefits coverage. These benefits compensate drivers, pedestrians or passengers injured or killed during the accident. With such compensation, the victim can cater for rehabilitation costs, medical expenses and any loss of income as a result of disability. With all this information in mind, one should understand this type of Car Insurance better.

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