LIABILITY 101: WHY YOU MAY NOT BE PROTECTED
If you are responsible for a collision (even if you are 50% responsible), you may need to pay compensation for property damage, death, injury, and income loss for the injured parties. Third-party liability insurance covers these expenses so you don't have to. It also covers the cost to defend you in court. But, if the cost of the damage exceeds the limit of your insurance, you must pay out-of-pocket to make up the difference.
The minimum required coverage limit in Saskatchewan is $200,000. In many situations, however, $200,000 is not enough. In fact, more than nine in 10 vehicle owners in Manitoba and B.C. — two other provinces with public auto insurance — have chosen $1 million or more in coverage.
But don't we have 'no fault' insurance in Saskatchewan?
Unless you choose the tort coverage option, you are automatically covered by 'no fault' coverage. More than 99% of Saskatchewan consumers have no-fault coverage.
But 'no fault' does not mean 'not responsible.' It simply provides a broad level of specified benefits, regardless of who is responsible for the collision. Individuals can still sue for expenses not covered by the defined benefits (although they cannot sue for pain and suffering, except in very limited circumstances). With tort coverage, while the level of benefits is lower, individuals can sue for pain and suffering.
The only way to protect yourself and your loved ones from major financial risk is to purchase additional coverage as part of a package policy. Here are four reasons why:
1. DAMAGE TO PROPERTY
If you are found to be at-fault for an accident where property is damaged, you are financially responsible. There are several cases in Saskatchewan where the value of that damage has been in the millions of dollars, such as a vehicle hitting a train or causing a double-trailer rig to hit the ditch.
2. COLLISIONS CAUSING INJURY
In collisions where you are found to be at fault, injured victims may sue you for expenses not covered by basic plate insurance. This includes income loss for high earners (currently defined as $103,000 or more annually) or their dependents, as well as other rehabilitation and living adjustment expenses.
3. FAMILY SECURITY
If you, your passengers, or your family member are injured in a vehicle accident and the at-fault driver is unidentified (hit and run), uninsured, or doesn't have enough insurance to cover your claim, the extra coverage you purchase through your package policy will help compensate you. This is very important if you are travelling in the U.S., where some states only require $25,000 in personal liability coverage.
4. OUT-OF-PROVINCE TRAVEL
If you drive outside of Saskatchewan, both within Canada and throughout the U.S., you are subject to the laws of those jurisdictions. Most provinces, territories, and states have much lower ‘no fault’ benefits and most compensation is claimed by suing. Therefore, your risk of being sued and the amount of a settlement are likely to be dramatically higher outside Saskatchewan. In Alberta or the U.S., for example, it doesn’t take much of an accident to result in damages exceeding the $200,000 minimum liability coverage — plus your legal bills.
"I COULD LOSE MY BUSINESS AFTER BEING SUED."
In this 'learning from loss' case study, SGI CANADA explains how Greg's out-of-province accident could result in his family's bankruptcy.
Greg is a successful business owner in Lloydminster, who regularly does business on the Alberta side of the city. One day, while in Alberta, Greg was in a collision and the other driver was seriously hurt. A few weeks later, he was served with legal papers — he was being sued for more than the $200,000 in liability coverage that came included with his vehicle registration and licence plates.
Unfortunately, Greg did not purchase extended auto insurance, meaning he was financially responsible to make up the difference in the settlement. He had worked hard for so many years to build a thriving and lucrative business. His financial success was now vulnerable due to legal fees and a hefty payout to the injured driver.
Greg and his family’s future may be in jeopardy, with their savings and his profitable business at risk, simply because he did not purchase a package policy.
In so many cases, you don't use insurance until the most challenging times in your life. You don’t want to think about the worst that could occur, or why you might need extended auto coverage. But you need to think about it. It can protect you and your family from financial hardship. Good insurance is an act of care.