As we say goodbye to our warm December and hello to what has been a surprisingly warm start to 2007, remember that good weather usually means fewer collisions on the road. However, winter weather can change quickly in Canada, so I'm starting off the New Year by revisiting the Fault Determination Rules that apply to Ontario auto accidents.
Ontario drivers know that the financial consequence of being found just a little bit to blame for an accident; is the same as being found fully responsible. The premium increase that follows does not include a credit for partial fault. Given this rather severe penalty, it is reasonable to expect that when insurers assess the "fault of their own insured" that they will apply the Fault Determination Rules correctly.
Because Fault Determination Rules are s tatute, they legally bind Ontario auto insurers and drivers alike. At first glance, some of the fault assessments for some of the described accident depictions appear arbitrary and unfair. In other respects however, if the Rules are followed as written, the final result may be the same as if the matter was decided in Court. One key difference is that while Judges provide written reasons to explain their decision, insurance companies may resist doing so.
Not all drivers ask for the number of the Fault Determination Rule being applied to them when they are under assessment to determine fault. They should. Over the years, certain practices have evolved to expedite accident settlements, such as a dispute in versions of the same accident is settled 50%-50%. Would it surprise you to know that no such Rule exists in the Statute? This doesn't mean that an accident cannot be settled at 50% fault, but not if the reason given is disputed versions.
There are several Rules that do apply to a 50-50 division of liability. One example of this is Rule 14 (4) where two drivers collide in an intersection and both claim that the other driver disobeyed a stop sign. The Rule reads: If it cannot be established who failed to obey the stop sign, each driver shall be deemed to be 50 percent at fault for the incident. Lawyers tell me that there is always a reason why certain words are chosen. The word "establish" is a verb. This suggests, to me at least, that before an adjuster can decide that they cannot establish who failed to obey the stop sign, they must be able to show that they actually did undertakes an investigation before making a conclusion.
There are other reasons why drivers who are assessed fault should always ask for the number of the Fault Determination Rule applied. There is an expression that you should never "leave money on the table" and those who automatically accept their fault assessment without question may do just that. Mistakes do happen. What if the Rule applied is the wrong one and there is a more favourable Rule that has been overlooked?
The financial benefit of correcting a wrong fault assessment may be considerable, or just minor. A driver who does not have collision coverage for a vehicle valued at $4,000 will receive an additional $1,000 if fault is reduced from 50% to 25%, whereas a driver with a $1000 collision deductible will only receive $250 more. In either situation, this is money that should be paid to the Insured and not retained by the Insurer in error.
The best result, which does happen in some circumstances, is a complete fault assessment reversal to 0 percent. Not only is the entire claim paid under the Direct Compensation section of the policy; there is a potential saving of hundreds of dollars when premium is not increased.
Readers can find the Fault Determination Rules on the Financial Services Commission of Ontario website at www.fsco.gov.on.ca .
Next Week: More about Fault Determination Rules
Susan Saksida, CIP is an Insurance Consultant. Questions or comments can be emailed to insurance compliancematters@rogers.com
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