How much third-party liability coverage does the average driver in Alberta need? In Alberta, lawsuits for motor vehicle accidents are exceedingly common. This is because we have a tort system wherein the party injured in a motor vehicle accident, by no fault of their own, will generally bring a lawsuit against the other driver. The source for recovery will generally be the defendant driver’s auto insurer. Particularly a section of the insurance policy called the third-party liability insurance or Section A will come into play.
This begs the question for motorists about how much third-party liability coverage they generally need. This is a very good question, and one it pays to think ahead about.
Third-Party Liability Coverage – How Much Do I Need on my Vehicle?
The default recommended limit in Alberta for most insurers is $1, 000, 000 in coverage for any damage to property or injury to persons. Well, this is the most common amount on Albertan Policies it is by no means the ideal amount to have.
When you enter a vehicle, it is important to remember that you are driving a large, heavy piece of machinery that operates at high rates of speed. The opportunity for damage to other people or to property in the vicinity is not a rare one. Every day when you step out the door and into your vehicle, there is the opportunity for something to go wrong.
For example, you could be making a left turn when a pedestrian darts into your path to catch the last few seconds of a walk signal, you could merge and hit somebody in your blind spot, you could accidentally hit a motorcyclist, or end up in a multi-car pileup. None of these are ideal scenarios to be in. However, they are potential possibilities anytime you get behind the wheel of a vehicle. You may not be able to predict when such occurrences will happen, but having sufficient liability insurance can go a long way to ensuring peace of mind. Just because something hasn’t happened to you in the past does not mean it can’t in the future. This includes being in a serious motor vehicle accident.
Serious accidents can result in injuries and damages that far exceed the standard $1, 000, 000.00 policy limit in most Alberta Policies. There is no guarantee that the vehicle you get into an accident with will only have one passenger or that there will only ever be one other vehicle involved. In situations where the number of injured parties is high, and the severity of injuries sustained is high your limits can quickly be exceeded.
What Happens When the Damages Exceed my Third Party Liability Coverage?
If the final damages set in the case surpass your third-party liability coverage, you can end up in a situation where you can be held personally liable for damages sustained. The insurer will only cover up to the amount required by the policy. Any damages more than this could be pursued against the defendant driver personally. This can be a scary prospect for many drivers when we consider that one person who is totally immobilized and unable to work any longer may in some instances see damages in excess of $1, 000, 000.00.
Now if we multiply this by 2, or 4, or 8, or 16, or 20, or so on the potential personal liability against you as a driver in the worst-case scenarios can be astronomically high. This can leave your personal assets in jeopardy.
For this reason, it is generally a good idea to maintain at least $2, 000, 000.00 in policy limits on your auto insurance. Often, this can be negotiated at a relatively reasonable rate. But having the excess coverage and not needing it is far preferable to the alternative scenario in which you end up in a serious accident and are shackled to thousands of dollars in debt.
James H. Brown and Associates – Car Accident Injury Lawyers
Have you been the victim of a car accident and are unsure what to do next? Contact James H. Brown and Associates. Our team of precedent-setting injury lawyers is here for you. We offer free injury claim consultations and have injury lawyers standing by to answer your injury law questions.