How Much Third-Party Liability Insurance Should You Have On Your Car?

What is Third-Party Liability Insurance?

Your third-party liability insurance coverage or Section A coverage of your motor vehicle insurance is included in all auto insurance policies within the province of Alberta. This part of your policy serves to create a pool for potential claimants to recover against in the event that you are found to be at-fault for personal injury or property damage caused in an accident involving your vehicle. If you are found at fault for an accident, a judgment could be awarded against you that, without a policy of insurance, may allow claimants to recover against your assets or garnish your wages.

How Much Third-Party Liability Coverage Should I Have to Protect Myself?

In Alberta, the minimum requirement for insurance is $200,000 for third-party liability and accident benefits coverage. Over 98% of policies in the province of Alberta will have at least a million dollars of third-party liability coverage on them. This is a common practice, it is generally advisable to have higher policy limits. In the event of a serious accident, the amount that you are liable for can balloon quite quickly.

Imagine a situation where you strike a pedestrian, this pedestrian is left with multiple fractures and is expected to suffer ongoing pain symptomology, arthritic changes, and traumatic brain injury. Before the accident, this pedestrian worked as a construction worker and had minimal job-specific training. Thus, many of the jobs available to them before the accident would have involved manual labour. The pedestrian is left unable to work, yet still needs to be able to support themselves into the future for the balance of their life. A situation like this can result in damages climbing dramatically at a quick rate.

But it’s easy to imagine other situations wherein you may be left exposed to claims for a significant number of damages. For example, situations where another driver is rendered a paraplegic or there is a fatality claim involved for an individual with multiple dependents. You can consider the severity of these sorts of situations, then consider the fact that really in the right set of circumstances you could be facing not just one, but multiple of these sorts of claims. Or perhaps one or multiple of the affected parties are high-income earners that have lost significant amounts of wages as a result of their accident-related injuries. Lost wages caused by yourself by virtue of the accident and wages you would be responsible for under the law.

Do I Really Need This Much Third-Party Liability Coverage?

Some drivers may anticipate that they will never get into a severe accident because they are naturally cautious. This can be a dangerous gamble to make. Even the most prudent driver may react imperfectly in the face of calamity. On the province’s highways, situations can change at quickly, and you may have to react in a split second. A momentary lapse in judgment can result in situations that could make you liable. Perhaps you didn’t get enough sleep the night before and failed to see a stop sign, you forget to pay attention to your speedometer and are travelling at an excessive speed rate, or you are distracted by another person in your vehicle and strike a pedestrian.

The simple reality is that it is impossible to predict what may or may not happen when you get behind the vehicle of a motor vehicle. At the end of the day, you are ultimately behind a large machine that can weigh thousands of pounds and has the potential to be devastating or fatal in the event of an accident.

It is prudent to carry more third-party liability insurance. Thus, in the effect of a severe accident with significant damage, you have enough third-party liability insurance to satisfy the needs of the victims of the accident.

Conclusion About Third-Party Liability Insurance

All of these possibilities mean that failure to carry adequate third-party liability insurance can leave you significantly exposed in a manner that could irreparably alter your life. It is often only by sheer luck that you are not left with potentially hundreds of thousands of dollars in liability against you. For this reason, most lawyers would tell you that having a minimum of two million dollars of third-party liability coverage on your motor vehicle policy is responsible. Paying slightly higher premiums is a small price to pay for the peace of mind that having a solid policy can offer you in the event of a calamity.

If you or someone you know has suffered injuries due to a motor vehicle accident, we want to hear from you. The heavy hitters at James H. Brown & Associates have decades of experience in practicing personal injury law, including motor vehicle accident-related claims. We are Alberta’s precedent-setting law firm and are eager to fight for you to ensure you can meet your necessities regardless of your injuries. If you’ve been injured, call us today at 780-428-0088, we offer free consultations and are eager to hear from you!