|
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.
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 www.InsuranceHotline.com.
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.
*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.
|
