Alberta Auto Insurance – How Much Auto Insurance Liability Should You Carry?

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Alberta Auto Insurance – How Much Auto Insurance Liability Should You Carry?

You should carry a minimum of $2 Million of auto liability insurance on your car or truck. Third party liability insurance on your automobile is designed to protect you in the event that you are negligent and cause a collision which results in serious injuries or death to innocent victims. The old recommendation by insurance companies and insurance brokers was for people to carry $1,000,000 third party public liability insurance. However, if the claim exceeds $1,000,000, and this part is very important, then your personal assets including your home, your vehicles and your life savings could be subject to seizure, garnishee and other enforcement proceedings such that you could suffer a catastrophic loss of all of your savings to pay a judgment in excess of $1,000,000.

Therefore the question now is, in 2013 and in the recent past, “Is $1,000,000 sufficient third party liability auto insurance in Alberta if you cause an accident?” The answer is a resounding “No”. In a current lawsuit we have against an insurance broker who sold a $1,000,000 insurance policy to a family of six children and two parents (so that there were routinely eight people in the vehicle), we hired an Insurance Risk Management Consultant who determined that 22 times every year in Alberta, auto claims are settled or judgments are rendered in excess of $1,000,000.

Auto Insurance Alberta

We buy insurance to protect us completely. An acceptable risk for serious loss involving public safety is generally accepted at one in a million. We do not buy insurance to protect us 98% of the time or 99% of the time; we want insurance to protect us 100% of the time and to protect us completely. What if you are one of those 22 auto insurance claims each year in Alberta which exceeds $1,000,000 and you only have $1,000,000 liability insurance? If you are wealthy or have any assets at all, the result is catastrophic! The plaintiff/victim you injured will pursue your personal assets and will be able to take all of the equity in your home, minus a $40,000.00 exemption.

What is even more galling about insurance companies and insurance brokers routinely still selling $1,000,000 of third party liability insurance today in 2013 is that for only 2% more of the total cost of your auto policy, or about $35.00 more per year, you could purchase $2,000,000 of third party liability insurance!

It is negligence on behalf of the auto insurance alberta broker, insurance agent or insurance representative for a company who are licensed and trained professionals and who have a duty to advise you of your insurance needs and a duty to protect you as a consumer to only sell $1,000,000 third party liability insurance.

Go and immediately read your auto insurance policy and see how much third party liability insurance you have. If you only have $1,000,000 on your policy, phone your insurance company or your insurance broker and ask him or her why they only sold you $1,000,000 third party liability insurance. The answer you will probably get is that this is what we always sell people! Perhaps you should then refer them to this website and this blog with the statistics and then immediately look for a new insurance broker or insurance company and find an insurance company or insurance broker who will recommend, without you asking, $2,000,000 of auto liability insurance.

Our research indicates that 45% of insurance brokers in Alberta will either only quote $2,000,000 auto liability insurance, or, will quote $2,000,000 auto liability insurance and must be asked about $1,000,0000 auto liability insurance, or quotes $2,000,000 and $1,000,000 car liability insurance with a strong recommendation to purchase $2,000,000. This is the type of broker or insurance company that you want to deal with as they are looking out for your interests and doing their job as professionals insuring that you are protected from a catastrophic loss in the event that you cause a serious motor vehicle collision with serious injuries or fatalities.

However, there is still another problem, “What if you cause a loss in excess of $2,000,000?”. “What if you strike a van full of six doctors on their way to a conference?” See my forthcoming post about Umbrella Policies as a way to increase the $2,000,000 third party auto liability insurance.

By | 2017-07-14T18:17:17+00:00 October 3rd, 2013|Insurance Claim Issues|0 Comments

About the Author:

Mr. Brent Handel, J.D., Q.C. is the head of the Personal Injury and Fatal Accident Group at Handel Law Firm.

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