Auto liability coverage – Is $1 million really enough?
In this day and age, you don't have to be a millionaire to be sued like one. It takes a split second for an accident to take place, but the financial recovery process can be much longer without adequate insurance in place.
Consider this scenario:
Jennifer is driving along and doesn't notice the traffic light turn red. An unsuspecting pedestrian starts to cross the road. Jennifer hits him and the diagnosis by the doctor is that he will never be able to walk again. He sues Jennifer for the injuries she has caused him.
Jennifer is insured. Her policy will respond to the lawsuit brought forward by the pedestrian she struck and injured, including defense costs.
Although vehicle damage is one important insurance concern – liability insurance is another necessary form of protection if you are found legally responsible for bodily injury, death or damage to property of others in the courts. Liability insurance is mandatory and included in all auto insurance policies. You have a choice, however to adjust your level of coverage to make sure your needs are met.
What can you do to protect yourself in case of an accident? Consider increasing the following coverage levels on your auto insurance policy to $2 million:
Liability Coverage
What is liability coverage?
In the event of a lawsuit, the Insurer will pay up to the limit of liability you have purchased on your policy. In addition to your liability limit, the Insurer will also pay legal costs, investigation costs, and any post-judgment interest (on the portion of the award that falls within your liability limit). Defense costs and investigation costs are paid out whether you are found responsible for the accident or not.
Why do I need to increase my liability coverage?
To understand the importance of increasing your liability coverage, assume from the above example that Jennifer carries $1 million liability:
The courts award the plaintiff (the pedestrian) a judgement of $1,500,000. Taking all costs into account, the Insurer takes on responsibility for $1,000,000, as well as defense costs of $20,000 over and above the total award. Jennifer would be responsible for $500,000.
In recent years, society has increasingly relied on the courts to resolve disputes. Be aware that large lawsuits can and do happen in Canada, with settlements in the millions of dollars. Where there is uncertainty on the roads and in the legal environment, it is important to consider your level of comfort and security with your current level of coverage.
Family Protection Coverage
What is Family Protection Coverage?
To remember when Family Protection Coverage would apply, think of the three "Us" – Underinsured, Uninsured or Unidentified motorists. Family Protection Coverage ensures that you and your family are protected against injury caused in an automobile accident where the at-fault driver's liability auto insurance coverage is inadequate.
Why do I need to increase my Family Protection Coverage?
In the event that the other driver is underinsured, uninsured or leaves the scene of the accident, your own insurance policy would step up to cover damages.
Are you concerned about liability limits for your auto or property insurance?
Contact us for information on increasing your liability coverage and family protection coverage to $2 million on your auto insurance for only a few extra dollars per month.
Ask about increasing the liability coverage on your property insurance policy to $2 million, or purchasing Personal Umbrella coverage.