November 14, 2024Filed Under: Accident , Antonio's Blog , Insurance

Accident Benefits

Accident Benefits

Ontario’s current automobile insurance regime can be quite complicated and if you have had a serious car accident you should definitely consult with a lawyer.

One of the most misunderstood aspects of Ontario auto insurance law is the no fault component. Most clients are surprised when I tell them that they must advise their own auto insurer immediately of the accident. Especially when they were not at fault in the accident.

Client’s who were hit by a car as a pedestrian are even more surprised when I tell them that they must report the accident to their own auto insurer – if they own a car and have insurance. Clients always ask why they have to do that when they weren’t even in their own car when the accident happened. Some clients find this so strange that I’m sure some don’t believe me.

Accident-benefits

In my opinion clients are right to be surprised. It makes no legal sense for your own auto insurance to become involved when your car was not involved in the accident. But the reason the law is this way has nothing to do with some legal rationale. It’s all about economics.

In the old days when the system was more or less based on fault, for example, your own insurer would pay for the damage to your car and if you were not at fault then your own insurer would make a claim against the insurance of the at fault driver to be re-imbursed.

At some point someone realized that it was very expensive for insurance companies to be chasing down each other for compensation. At one point I heard a figure of 15%. So to save money insurers decided that it was cheaper if each insurer paid for their own clients – and in the end with the law of averages it would be okay.

The same applies to no-fault or accident benefits such as wage loss and medical befits. It’s your own insurer that pays. If you don’t own a car then it is the insurer of the car you are in that pays the accident benefits. And if you are a pedestrian and don’t own a car it’s the insurance company of the car that hit you that pays. Regardless of fault.

Until next time. Be well.

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