No-fault insurance: an oxymoron

No-fault insurance is an oxymoron. Fault is determined in every accident, using the Fault Determination Guide as set out in the Insurance Act. To view the Fault Determination Rules, click below:

No-fault insurance actually means that if you get into an accident, regardless whether or not it’s your fault, your own insurance pays for the damage to your vehicle and for your injuries. No-fault insurance was created to increase consumer satisfaction with claims handling, as you only have to deal with your own insurance company, not somebody else’s company when paying for your damages.*

Accident forgiveness

After an at-fault accident, insurers drop the policyholder to a lower claims-free or star rating, which will result in an increase in premiums for several years. The increase is simply less than drivers would suffer if their insurers demoted them to a zero star or zero claims-free rating.Some will raise premiums by more than 50 per cent.

Accident Forgiveness means that the insurance company drops the driver’s “star rating” to a lower level, resulting in a premium increase. Insurance companies that offer “Accident Forgiveness” say that the driver is forgiven because the insurer could have dropped him or her to an even lower “star rating,” causing a larger premium hike. But it doesn’t matter. The bottom line is what insurers are charging you regardless of their particular “star rating.” Plus the accident still shows up on your record.

Further accidents, or a combination of claims and convictions for driving infractions, could also result in the insurer refusing to renew your policy.
Convictions for driving infractions can affect a policyholder’s right to what insurers call “Accident Forgiveness,” as well as the ability to buy the optional “Claims Protection” feature.
“Good drivers” should get a break and not be saddled with large premium increases after a small claim. Always check to make sure you are getting the best rate out there by going to

Claims protection (It can be bought — it’s also called “Premium Protection” or “Accident Waiver.” )

Most insurers will sell drivers claims or premium protection. The majority of drivers would qualify to buy it, but many have not bothered. This protection would allow you to maintain your “good standing” with your insurance company after an at- fault accident. The cost is usually around $35 to $50 dollars, which is like buying insurance for your insurance.
This means your renewal after an at-fault accident will show the same star rating, and there will not be an increase in premium as a result of the claim.

The claims protection is usually removed immediately after the claim, and a second accident would not have this protection. Further claims, or a combination of claims and convictions for driving infractions, could result in the insurer refusing to renew the policy. In some cases, claims protection will entitle the policyholder to an extra at-fault claim before the insurer will refuse to renew the policy. This protection could disappear, however, if the policyholder reported an at- fault loss, even if he or she paid for the damages personally.

Insurance companies offering Accident Forgiveness and Claims Protection: There is NO clear delineation of what an insurer can and cannot do with regards to Accident Forgiveness or Claims Protection.

Here is the most comprehensive chart available indicating which insurance companies offer Accident Forgiveness or Claims Protection, and their conditions:

*Note: In Ontario, this is called “Direct Compensation – Property Damage (DC-PD).” This section of your automobile insurance policy covers damage to your vehicle or its contents, to the extent that another person was at fault for the accident. It is called “direct compensation” because even though someone else causes the damage, you collect directly from your own insurer, instead of the person who caused the damage.