The insurance industry has contemplated changing the automobile insurance system in Alberta. Motorists complain of high premiums and yet the insurance companies still feel that they are not making enough money. A few years ago Ontario changed its insurance system to what is commonly referred to as a “no-fault” system. Manitoba and Saskatchewan have followed suit. Because a change to a no-fault insurance system would drastically affect the rights of accident victims, it is extremely important that the public be made aware of the pros and cons of the two different systems.
The automobile insurance industry in each province is controlled by provincial legislation. The insurance systems in each province differ, some more than others. In Alberta, we operate on a tort based system. This simply means that when a driver causes an accident and injures someone, the victim can sue the driver (the negligent motorist) and the Courts will do their best to reasonably compensate the victim for his losses. If the negligent motorist carries liability insurance (which is mandatory), then the insurance company will be forced to pay the accident victim in accordance with the Court Judgment. Generally, the negligent motorist who causes the accident will not be fully compensated under our current system; however, he will receive a portion of his lost income and he will have his medical expenses paid by his own insurance company up to a maximum of $10,000.00 within two years from the date of the accident. The at-fault motorist is not compensated for pain and suffering because he is responsible for his own injuries.
British Columbia has what is called “Government Insurance”. The system is very similar to ours. The accident victim is entitled to sue the wrong-doer and will be reasonably compensated by the Courts. However, unlike Alberta, there are not a number of competing insurers selling automobile policies. Rather, the government collects insurance premiums and pays the claims on behalf of negligent drivers. Again, a driver who causes an accident is prevented from claiming full compensation for his injuries, but will receive compensation similar to what is available in Alberta as mentioned above.
In Ontario, the tort system has been replaced by a form of no-fault automobile insurance. There are many different variations of no-fault insurance and the term is quite hard to define. However, generally speaking, no-fault insurance schemes tend to restrict the compensation payable to accident victims while allowing the negligent motorist to claim exactly the same benefits as the victim.
The tort system and the liability insurance system we presently enjoy in Alberta have been a long time in the making. Long before Canada was a country, Judges in England were struggling to find a fair method to have a wrong-doer compensate his victim. In 1932, the English Court of Appeal made a landmark ruling in the case of Donoghue v. Stevenson. In that case, the Judges summarized the developing law of negligence in a fashion so just and so appealing that the decision has been followed by virtually every Court in the western world. The decision applies to every fact situation (not just automobile accidents) and to people in all walks of life. In Donoghue v. Stevenson, the Judges said that if, in any given situation, your acts could reasonably be foreseen to harm another, then you have a duty to act reasonably and in such a manner so as not to cause him harm. If you fail to act reasonably and do cause him harm, then you will be held accountable and forced to compensate him.