2023/12/3
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Auto Insurance in Canada
Canada handles car insurance and motor vehicle collisions a little differently than our neighbours to the south, where motor vehicle insurance laws and regulations vary significantly from state to state. Car insurance in Canada is regulated, in some form or another, by the government. While some provinces, including Quebec and BC, provide a public auto insurance system; others, including Ontario and Alberta, have a private auto insurance system. Despite these differences, basic auto insurance in Canada is mandatory and intersects with public policies and provincial statues, regardless of the province.
An additional hallmark of the Canadian system of auto insurance is the no-fault system. Although not all provinces have an elaborate no-fault system like Ontario, each province has some basic aspect of this structure. Significant differences in provincial no-fault systems merely range in the level of coverage and the extent to which tort claims are handled. Ontario is the most populated province in the country and boasts a robust no-fault system. However, Ontario residents and licensed drivers will often find Ontario’s Accident Benefits system to be convoluted and difficult to navigate.
Ontario’s No-Fault System
The no-fault system is labelled as such by virtue of the removal of a necessary determination of fault from the initial assessment of an insurance claim. Essentially, if a person is involved in an automobile accident, they deal directly with their own insurance company, regardless of fault. In turn, the insurance company has access to government regulated funds (Accident Benefits, for example) that are designed to cover the basic claims of a motor vehicle accident. Because these basic funds are publicly available, insurance companies (generally) do not engage in elaborate investigations and adversarial behaviour between one another, which usually takes a great deal of time. Prior to the no-fault system, injured parties could be without compensation for long periods of time or would be required to cover costs of vehicle damage themselves and seek reimbursement later. Ontario’s no-fault system has expedited the process and removed some of those challenges.
Claims in Tort
So what are the downsides of the no-fault system? One could argue that the system protects (or rather, doesn’t adequately discourage) poor driving. While from a public policy perspective, this may be theoretically true, there are ways for drivers to collect damages that are beyond the scope of the Accident Benefits program in Ontario. Civil litigators are available to help pursue lawsuits on behalf of injured parties who are the victims of negligent driving. This avenue for compensation is called a tort claim. Unlike the Accident Benefits claim and the expedited no-fault system, a tort claim is traditional litigation and usually requires several months or more to process. But these claims are reserved for situations where a person is seriously injured by the negligence of opposing driver. Pursuing a tort claim can be expensive and time-consuming, but if the injured party has suffered and the opposing party is at-fault, then a tort claim is a worth-while option. Indeed, it may be the only option for a seriously injured driver to be fairly compensated because Accident Benefits will not cover the extent of the loss.
Getting Back on the Road
Ontario’s bifurcated auto-insurance system is fair and efficient. With 10,617,912 licensed drivers, 9,795,303 registered vehicles on the road (2020), and 828 kilometres of the infamous 401 highway, Ontario sees its fair share of collisions. In 2020, Ontario recorded 23,689 collisions involving fatalities or personal injury; down from 34,130 in 2019. The 2020 numbers are expected to rise as more drivers are getting back on the road. Ontario produces an enormous volume of accident claims, but by dividing claims into either Accident Benefits or claims in tort, this allows the system to process these claims more efficiently. Many claims do not require litigation, as they may be limited to vehicle damage or minor injuries. The no-fault system allows these claims to be processed quickly without involving the Superior Court of Ontario, while more serious claims have the option of litigation.
Regardless of whether or not a person believes their car accident is serious, it is important to seek legal advice after a motor-vehicle collision. A lawyer can determine if a claim in tort is worthwhile and can also complete the entire Accident Benefits claim in a timely and stress-free manner. With the efficiency of Ontario’s no-fault system and a skilled personal injury litigator on your side, drivers can rest assured knowing that they will be fairly and quickly compensated after a motor-vehicle accident.