CanadaWhat does my no-fault insurance cover versus what I need to sue for?
No-fault insurance in Canada covers your immediate medical, rehabilitation, and income replacement costs after a car accident — regardless of who caused it. You can only sue for additional damages (like pain and suffering or lost future earnings) if your injuries meet a legal 'threshold' of seriousness, which varies by province.
What the Law Says
Canada’s auto insurance system combines no-fault benefits with limited tort (lawsuit) rights. Each province sets its own rules, but all require insurers to pay statutory accident benefits automatically after a crash — no proof of fault needed. However, suing the at-fault driver is restricted to cases involving serious, permanent impairments.
No-fault insurance — officially called Statutory Accident Benefits (SABS) — provides immediate, guaranteed payments for things like medical treatment, rehabilitation, attendant care, and income replacement after a motor vehicle accident. These benefits are paid by your own insurer, even if you caused the crash.
To sue for additional compensation (e.g., pain and suffering, loss of enjoyment of life, or future earning capacity), you must first meet your province’s 'injury threshold'. Most provinces define this as a 'permanent serious impairment of an important physical, mental or psychological function' or 'permanent serious disfigurement'.
The right to sue is also subject to strict time limits — usually two years from the date of the accident — and may be barred entirely in some provinces (e.g., Quebec and Manitoba) for minor injuries.
What Courts Have Said
Courts have consistently upheld the purpose of no-fault schemes: to ensure prompt, equitable access to essential benefits while limiting costly litigation. The Supreme Court has clarified that accident benefits apply broadly — even when the at-fault vehicle is unidentified.
The Court held that a passenger injured when her vehicle was struck by an unidentified motorist was entitled to statutory accident benefits under Ontario’s no-fault scheme — confirming that benefits depend on the fact of injury in a motor vehicle incident, not proof of fault or identification of the other driver.
What to Do
Contact your insurer immediately after the accident to start your no-fault benefit claim — no waiting for fault determination.
Keep detailed records of all medical treatments, receipts, and lost wages to support your benefit application.
Consult a personal injury lawyer early if your injuries are serious or worsening — they can assess whether you meet your province’s lawsuit threshold.
File any lawsuit before the applicable limitation period expires (usually 2 years from the accident date).
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.