Importance of Having A Minimum of $2,000,000 In Third Party Liability Insurance

The mandatory minimum motor vehicle liability insurance is $200,000 in Alberta. And while this could be considered a lot of money to the average citizen, it is still far below the amount we would recommend to anyone. If your goal is to protect not just yourself, but also all your loved, then you should invest a minimum of $2,000,000 into third party liability coverage, and here is why.

The state of liability insurance in the United States

When it comes to the United States, you will find that the majority of jurisdictions mandate no more than $100,000 in liability insurance. Often even less than that. As a result, the vast amount of big jury judgments ends up unpaid, and the victims are left with huge amounts of debt by no fault of their own.

The purpose of liability insurance in Canada

As a resident of Alberta, you should know that our judgments are meant to help accident victims return to a state of wholeness, as if they had never suffered the accident. Unfortunately, the current mandatory minimum is far from enough to achieve this. Oftentimes because of the reimbursements needed for lost wages. The financial amount required to reimburse a victim for income losses alone often far exceeds $1,000,000.

This means that, if you have only obtained the minimum of $200,000 in third party liability coverage, then you could be left in a position where full financial recovery is impossible. You could file for bankruptcy in order to avoid an auto judgment, but that would not protection you from an Operators’ License suspense. Ridding yourself of that suspension would then require the full payment of your judgment.

What it all boils down to

In conclusion, when you get sued and your only protections is the mandatory minimum of $200,000 in liability insurance coverage, then you will have to look at a future of paying off your judgment over the course of years. All it takes to protect you from the fate is a slight increase in extra coverage costs. It will help secure your future and support yourself and your family in the event of an unforeseen collision.

If you are unsure about the height of the increase, experts recommend that you reach out to your insurance broker or agent for further insight. After all, nobody wants to deal with financial struggles when they have just survived a traumatic event. That is why when your judgment is clouded, it is best to seek the assistance of a personal injury lawyer in Medicine Hat can make it simpler. They will deal on your behalf with the insurance company and law enforcement apart from the courtroom trial.