Everyone Should Have $2M Automobile Liability Limits

Automobile liability insurance covers you if you are sued for injuries caused in an automobile accident.  Your insurance company appoints a lawyer, defends you and pays out any damages (up to the liability limits).

In Ontario, the mandatory minimum amount of automobile liability insurance that all drivers must have is $200,000.  However, most drivers have $1M in coverage as it has become the insurance industry standard for insurers and brokers to sell at least $1M in coverage.  That means that your insurer can pay out up to $1M in damages if you are sued (and the plaintiff proves their case).

However, there are two significant reasons why everyone should talk to their broker or insurer and increase their automobile liability insurance to $2M.

The first reason is the more obvious one.  If you are sued, the more coverage you have the better.  With $2M in coverage, you are protected for damages claims up to $2M.  Insurance is about peace of mind and more coverage should equal more peace of mind.

The second reason is less obvious, but, probably more important.  Generally, your liability coverage amount is linked to your OPCF 44R “Underinsured” coverage amount.  So, if you have $2M in liability coverage, you also have $2M in Underinsured coverage.

Having $2M of Underinsured Coverage is very valuable.  Underinsured Coverage protects you (and certain family members) when you are injured in an automobile accident caused by an “underinsured” driver.  An underinsured driver is basically any driver with less liability coverage than your Underinsured Coverage.

An example makes this more clear:

If you are seriously hurt in an accident caused by a driver with $1M in liability coverage and you only have $1M in Underinsured Coverage, then you can only collect up to $1M (from the at-fault driver’s insurer) in damages to pay for your losses (income loss, pain and suffering, future treatment, etc.). 

But, in the same situation, if you have $2M in Underinsured Coverage, you can collect $1M from the at-fault driver’s insurer and then another $1M from your own insurer through the Underinsured Coverage.

If you suffer a large income loss or need significant care or treatment as a result of an automobile accident, having $2M in Underinsured Coverage will provide significant help.  That is especially so given the recent cuts to no-fault Accident Benefits.

The cost of increasing your limits is small.  On my truck, the cost is about $20 a month.  That’s not much to pay for significantly more peace of mind.

Duncan Macgillivray
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Duncan is a founding partner of White Macgillivray Lester LLP in Thunder Bay and Lecturer at the Bora Laskin Faculty of Law, Lakehead University, teaching Insurance Law. Duncan has served injury clients all across Northwestern Ontario, from the Manitoba border in the west, to Greenstone in the east and all the way up north to Hudson’s Bay. Duncan is involved in his community, serving on the Board of Directors of the Brain Injury Association of Thunder Bay and Area from 2009 to Present (with 2010 to 2015 as President) and the Board of Directors of Thunder Bay Counselling Centre 2009 to 2015 (with 2011 to 2015 as Board Chair). Duncan is also involved in the legal community, sitting on the Board of Directors of the Ontario Trial Lawyers’ Association since 2015, Thunder Bay Law Association since 2012, and Co-Chairing the Thunder Bay Law Association’s Civil Litigation CLE programs.