What is No-Fault Auto Insurance?
In Canada, no-fault auto insurance is indemnity coverage for losses by an insured’s insurance company. No-fault liability provides a policyholder with guaranteed reimbursement of expenses after an accident, no matter the designation of liability. While such policies restrict insured rights to recovery of damages in tort litigation, criminal charges and convictions may be referenced by the courts.
Terms and Conditions for No-Fault Policies
Exemption from individual culpability for bodily injury liability in an automobile accident is a key feature of a no-fault insurance provision. Insureds receive the benefit of bodily injury coverage regardless ofthe responsible party. This deviates from standard common law tort rules, which generally assign strict liability to tortious violations of the law. With no-fault insurance, drivers can avoid the more expensive detriments associated with litigation in an accident case. This fact makes no-fault auto insurance in hot demand. Assured coverage of injury and property loss is critical immediately following a road or highway accident.
How does it work?
No-fault auto insurance coverage pays for stated losses. This may include some or all of the insured’s loss in an auto accident. Drivers carrying no-fault insurance are paid by their insurer. The rationale for selecting no-fault insurance is compelling in Canada, where road accidents are often caused by weather and other external factors beyond a driver’s control. For the insured, this means that collateral damages and personal injury are covered by their insurer, regardless of any negligence or liability found during the investigation of the case. Replacement of finances disbursed to pay for medical and auto repair bills is generally faster with no-fault policies. Insureds should check the terms and conditions of their policy to determine the exact rules of coverage and compensatory recovery of losses.
Negligence Calculus
Most liability lawsuits require application of the negligence calculus. Once someone is deemed at fault in an auto accident, the court will review whether the cost or risk of prevention outweighs the cost or risk of taking an alternate action. Omission to act on repairs is a good example of how drivers can be cited as negligent, and therefore culpable in an auto accident. In traditional tort lawsuits where there is an injured party, the establishment of the degree of fault narrows duty to a standard of reasonable care in road conduct, as well as defines the proportionality of the monetary damages owed. Quebec and Ontario adopt a positivist, or civil law, approach to this calculus, applying charts and rule indices to measure fault and responsibility in direct compensation for property damage. Injury claims fall outside of this calculus and are afforded review for unlimited compensation.
If a collision indicates that one or more drivers were negligent in the incident, several insurance companies may become involved to settle the case. This can require additional time and money, resulting in the insured incurring far more costs than would otherwise be attributed to a policy in premium payments. Not surprisingly, no-fault insurance policies remain popular. Receiving a direct response to losses from an auto accident can be painful. No-fault puts you in the driver’s seat without delay.
Establishing Fault in Joint and Several Liability Claims
Court discovery of evidentiary proceedings addresses the facts of a case. Enforceability of insurance liability law references the terms and conditions of the indemnity contract in an auto accident. When a court establishes strict, or joint and several liability for a road or highway accident, Canada’s negligence law supports proportional assignment of fault, and obligation to compensatory remedies. Proportionality of liability by parties involved in an auto accident can range from 0% to 100% on a continuum of identified cause. This risk calculus may impact insurance premiums. Multiple claims or consecutive claims usually result in higher insured premiums.
Pros and Cons of No-Fault Insurance
Drivers preferring no-fault auto insurance policies support the argument that road accidents are inevitable. Canada’s extensive network of rural roads and climatic conditions increases the likelihood that an accident will occur. Taking on a no-fault insurance policy also assumes risk despite no record of recklessness or negligence on a driver’s record. This shows substantial responsibility in maintaining a safe vehicle and commitment to practicing proper driving conduct while on the road.
Criticism of no-fault auto insurance policies suggests that by not assigning due risk to negligent or reckless drivers, insurance companies are undermining the purpose of offering coverage in the first place. Raised premiums, argue then, are not a high enough cost for reckless driving. Essentially, protecting unknown parties from the risk of legal settlement or payment of damages in a liability case, no-fault insurance policies do not sufficiently deter the dangerous conduct of irresponsible drivers.