By Sally Praskey
Special to Kanetix

You're barreling down the highway in your slick new sports car. It's raining and the roads are slippery. You round a bend and suddenly you're faced with a sea of red taillights - a monstrous traffic jam. Next thing you know, you've plowed into the car ahead of you. But you remember that your province has "no fault" insurance, so you breathe a sigh of relief, thinking you won't be penalized by your insurer for causing the accident.

Think again.

The term "no fault" is misleading, to say the least, so you can't be blamed for being confused! However, it doesn't mean your insurer lets you off the hook if you cause an accident; it simply means that all the drivers who were involved in the accident claim for any injuries or car damage from their own insurance company, regardless of who was at fault.

Fast access to benefits

"No fault" usually applies to Accident Benefits, as these payments are the same no matter who was at fault. In other words, if you were injured in an accident that you caused, you could still claim for immediate medical benefits from your insurance company, despite the fact that you were to blame for the accident. Likewise, if you were involved in an accident in which you were NOT at fault, you would look to YOUR insurance company to pay your claim, even though the other driver caused the accident.

It's simply an easier and more efficient way of getting you the help you need right away, instead of having to wait for the insurance companies to decide who was at fault before you could receive any medical benefits.

Paying the price

But in the end, someone still has to be judged at fault and pay the penalty. Sure, your insurance will pay for your car to be repaired or replaced (whichever is more economical), and it will pay any accident benefits for which you are eligible. But if you are to blame - either completely or partially - in an accident, it will go on your insurance record and you'll pay a lot more for your coverage.

So don't be lulled into a false sense of security about no-fault insurance. Your best bet is to drive safely - no one will find fault with that!

Have you previously been in an accident? Make sure you're paying the best car insurance rate possible by getting car insurance quotes. You just might find a cheaper car insurance rate can be had.

Sally Praskey is the editor of Insurance Canada,, an insurance-related Web site for consumers and professionals, and co-author of The Insurance Book: what Canadians really need to know before buying insurance.

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