How Does No-Fault Insurance Work in Ontario?

Whether you have regular auto insurance or commercial auto insurance, Ontario has a no-fault insurance system for both types. 

The term “no-fault” does not mean that no one is at fault for the accident or collision. No-fault insurance describes how claims are made. After the accident, the drivers involved will each file claims with their own insurance companies. Even if the accident was entirely the fault of one driver, it doesn’t change how this process works—both drivers, the one at fault and the one who isn’t at fault, will deal with their own insurance company instead of the other party’s insurance company. 

Read on to learn more about how no-fault insurance works! 

What is No-Fault Insurance in Canada? 

Numerous provinces in Canada (including Ontario) have a no-fault insurance system for auto insurance or commercial auto insurance. 

This term simply talks about how the insurance will pay out for claims. Rather than going through the long process of dealing with the other party’s insurance, your own insurance provider will handle the claims for you. Even under a no-fault insurance policy for auto insurance, there are still consequences for being the at-fault driver, as we will discuss in this comprehensive guide. 

In some areas (like Saskatchewan), vehicle owners can still opt for the tort system, which is considered the opposite of the no-fault insurance system. 

Discover the differences between tort and no-fault insurance in the next section. 

No-Fault Insurance vs Tort System for Auto Insurance 

Under a tort system (or at-fault) insurance policy, the driver who is at fault for the accident will be responsible for paying the damages through their insurance. 

The table below details the difference between no-fault insurance and tort system (or at-fault) insurance: 

The Main Benefit of No-Fault Insurance 

The main benefit of no-fault insurance is that it significantly speeds up the claims process. In every type of accident, drivers involved file a claim with their respective insurance providers—no matter whose fault it is. 

With the tort (or at-fault) insurance system, it is crucial to first get to the bottom of whose fault the accident was. This leads to a lengthy and time-consuming process before claims are settled. No-fault insurance systems bypass this step.

Frequently Asked Questions About No-Fault Insurance 

1. Can I Have Tort System Car Insurance in Ontario?

Only some areas of Canada offer the option for drivers to get tort system insurance for their vehicles. For example, in Saskatchewan, the no-fault system is the default—but the driver can opt for tort system insurance instead. Meanwhile, in Ontario, car insurance generally follows the no-fault insurance system. 

2. What If The Other Driver in the Collision Doesn’t Have Insurance?

No-fault insurance can only work in everyone’s best interest if all drivers have insurance. Unfortunately, this isn’t always the case. So one might wonder: what happens if the other driver doesn’t have insurance?

In Canada, it is illegal to drive a vehicle without insurance. Therefore, if you find out that the other driver does not have insurance, report the incident to the authorities immediately. 

If you’re wondering about how this affects your coverage, your uninsured motorist coverage (which is required in all auto insurance contracts in Ontario) will protect you in such situations.  

3. Do Insurance Premiums Go Up After Being At-Fault?

Yes. If you’re found to be at fault or partially at fault for the accident, your insurance premium will go up. This is one of the main consequences of being at fault for an accident, even with a no-fault insurance policy. 

However, in Ontario, premiums cannot increase for minor collisions that are worth less than $2,000 in injuries or damage. 

4. What About Cyclists and Pedestrians Involved in a Car Accident?

If any pedestrians or bicycle riders are injured by your car, they are entitled to file claims against your no-fault insurance policy. 

5. Can I Still Sue for Injury If I Have a No-Fault Insurance Policy? (Ontario Tort Claim)

There are limitations to what you can sue for under a no-fault insurance system. Generally, a lawsuit is viable if it involves severe injuries or functional impairments. This is also known as an Ontario tort claim. This is yet another consequence of being at fault for a car accident, even with a no-fault insurance system in place. 

Get Commercial Auto Insurance Tailor-Fit For Your Needs 

Personal auto insurance does not cover vehicles that are used for commercial purposes. This is only one of the reasons why getting commercial auto insurance for your business’s fleet is essential. With the right commercial auto insurance policy, you will also be covered in case your commercial vehicles are damaged or if the accident results in severe injuries and subsequent lawsuits.

Here at KASE Insurance, we specialize in putting together tailor-fit no-fault insurance for businesses. Let our award-winning team assist you with every step of your insurance journey —from negotiating premiums to following up on claims. We provide the most hassle-free insurance experience. 

To get started, contact our team today or request a FREE quote.