February 19, 2016

Most people in Ontario have $1,000,000 in insurance liability limits on their motor vehicle insurance policy.  What this means, is that if you are in a motor vehicle accident and you are at fault for injuring another person(s), your insurance company will pay out up to $1,000,000 in claims.  If the amount exceeds your policy limits however, you can be held personally liable for the excess claims.

For instance, in a very serious claim, $1,000,000 will often not cover the damages incurred by the plaintiff(s).  Their claims may include damages for pain and suffering, future care costs, loss of income as well as Family Law Act claims.  If you do not have enough insurance coverage, you put yourself at risk for being personally liable.  Most  insurers will however, offer an increase in liability coverage to $2,000,000 for a fairly minimal increase in your premiums.  This may be an optional benefit on your motor vehicle insurance, or it may be in the form of an umbrella policy that increases the coverage on both your home and auto insurance. Your insurance representative will be able to provide you with the specifics as they relate to your policy.

There is however a second reason why increasing your coverage is important; one that most people are unaware of. If you are injured in an accident and the defendant has only $1,000,000 available in liability policy limits, and you have $2,000,000 available on your policy, you will have access to that second million should the claim exceed the defendants limits. This is called the Family Protection Endorsement and it provides coverage for you and your family from the actions of an at-fault, underinsured or uninsured driver. This can be particularly important if you are travelling in a province or a state where the mandatory liability coverage is low.  You are ensured that you will always have access to coverage up to your own policy’s limits, regardless of the defendant’s coverage levels.

Increasing your insurance limits not only protects you from exposure to claims personally against you, but it protects you directly if you are injured. 

For more information, contact Caroline Failes at 613.566.2849 or [email protected]

Caroline Failes