Compulsory Automobile Insurance Act

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All privately held motor vehicles must be insured according to the Compulsory Automobile Insurance Act (CAIA). This document demonstrates that a vehicle is covered by an automobile insurance policy, and it was issued following the payment of the sum specified in the Insurance Act. (Canadian Bureau Insurance, 2010). The insurance card is therefore an essential part of the deal. When the vehicle is covered by a motor vehicle liability coverage in Canadian territory, the insurer issues this card. The term "agent" alludes to the broker as defined in the insurance act who has the authority to approach car insurance companies. The automobile insurance concept is the insurance of the vehicle against the liability that could arise from the damage to the vehicle, injury or death of the vehicle occupants (Hashmi, 2000). An insurer is a person licensed under the insurance act to carry out the practice of issuing the insurance plan.

No-Fault Insurance

A no-fault insurance claim is an insurance plan that a person makes against the automobile insurer for payment of medical bills and lost earnings as outlined in the policy of no-fault laws. Under this claim, the insurer pays the medical bills of the person and also reimburses the part or whole of the lost earnings to the amount the person claims according to the no-fault limit (O'Connell & Brown, 1983). Thus, the no-fault insurance is a designed system that assists in streamlining the claim process in case of damages. No-fault insurance is beneficial to the insured in some ways. This insurance plan simplifies the process of getting the insurance claim that is paid when damages occur irrespective of who is on the fault side. As outlined in the tort system, the two insurance companies carry out an investigation in the attempts to determine the fault (Matheson, 1972). After this process, the insurance company whose insured driver was found to be responsible ends up paying for the entire damages and repair costs. Additionally, the drivers are able to quickly receive their insurance benefits without necessarily going through the lengthy processes of litigation. The individual does not have to involve in fights with another insurance company to receive the benefits. The costs that could be incurred in the lawsuits are avoided and therefore allowing one to be quickly compensated without worries of arguing fault (Tucker, 2008). Notably, the no-fault insurance incredibly cuts out the costs of the lengthy legal battles.

Despite the pros that are associated with having the no-fault insurance, there are also cons of the then insurance plan. Even though the party that is found to be on the fault has to pay all the costs, the injured person still has to pay out on the claim rather than the insurance company taking the full responsibility. The person has to pull out claims on their own even if they did not commit any accident (Tucker, 2008). Therefore, the premium rates become higher making it costly for one to afford the payment. Besides, the plan depicts to have a tendency of protecting the bad drivers and leaves out the good drivers without recourse at the time when their property becomes damaged. The person, who causes accidents cannot be sued for damages, pain, and suffering caused and thus allowing the bad drivers to get away with crimes. Moreover, the no-fault insurance does not seem to eliminate the challenge of resources that are critically wasted on the ligations.


Canadian Bureau Insurance. (2010). Compulsory Automobile Insurance Act. Ontario. Retrieved on July 8, 2017 from

Hashmi, S. (2000). Automobile Insurance Study. The Journal Of Risk And Insurance, 35(3), 444.

Matheson, G. (1972). No Fault Auto Insurance in Canada. The Journal Of Risk And Insurance, 39(1), 27.

O’Connell, J., & Brown, C. (1983). A Canadian Proposal for No-Fault Benefits Financed by Assignments of Tort Rights. The University Of Toronto Law Journal, 33(4), 434.

Tucker, W. (2008). No-fault compensation systems. Canadian Medical Association Journal, 179(12), 1300-1301.

July 15, 2023

Life Law


Human Rights

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Insurance Contract Automobile

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