I started adjusting well before the advent of no-fault in Ontario, when insurance companies still subrogated against each other for auto damage. Most insurance companies were members of the inter-company settlement agreement and adjusters used a tool called the "fault chart" to resolve claims. Admittedly, recovering money was better than paying out, so most adjusters were pretty diligent in their attempts to prove their insured was not at fault for an accident.
With the introduction of no-fault, the "fault chart" with some changes, became R.R.O. 1990 Regulation 668, Fault Determination Rules and mandatory in Ontario. Instead of collecting from the at-fault driver, adjusters now used these rules to decide their own insured's fault for compensation purposes. If the insured is at fault and they have collision coverage, payment is made under this coverage and to the extent that the driver is not at fault, their claim is paid under direct compensation coverage. Apart from a few exceptions, the insured gets the benefit of the rule that gives the lowest finding of fault.
Following the sharp increase in Ontario auto premium since 2001, drivers are understandably concerned about being assessed at fault and the concept of no-fault and fault determination can be difficult to comprehend for some. Recently several different accident scenarios have been shared with me and it seems that although the Fault Determination Rules are now sixteen years old, there are some auto adjusters who are making wrong fault assessments that have resulted in hefty financial consequences. Here are some situations that might sound familiar to you.
• Parking lot accidents are always 50-50, because they happen on private property.
Fact: There is no such rule. The rules of the road apply to parking lots.
• Since you don't have collision and the other insurance company didn't accept liability, there's nothing that we can do for you.
Fact: There is not such rule. The other insurance company does not have to accept liability. Fault is decided by applying the rule which most closely describes the accident reported.
• The accident is not specifically described in the rules so fault is assessed 50-50.
Fact: There is no such rule. When an accident circumstance is not specifically described by the rules, then the ordinary rules of law apply.
• If you disagree with the fault determination rule decision, there is nothing that can be done.
Fact: The insured can choose to arbitrate or sue their insurance company if they believe that they will get a better result by applying ordinary rules of law.
I suspect that these wrong decisions are isolated cases. However, if you have been involved in an accident and if you have any concerns that your fault assessment was incorrect, you can review the details of your accident against the fault determination rules which can be found on the Financial Services Commission of Ontario website at www.fsco.ca.
If you believe that an incorrect fault assessment was made in your case, contact your adjuster or the insurance company ombudsman immediately. Your insurance company is required to consider all new facts presented if you choose to challenge their decision and if they disagree, they must tell you why in writing. Remember, mistakes are probably rare, but if it is determined that your fault is lower than originally assessed, you may be entitled to a financial adjustment. If you can, take a minute and share your results with me.
Next week: The role of your insurance broker.
Susan Saksida, CIP is an insurance consultant who has held senior positions in insurance companies and brokerage firms. She is currently conducting research into the root cause of consumer misunderstanding of the insurance industry. If you have an auto accident-related story please email it to insurancecompliancematters@rogers.com
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