1 Big Auto Insurance Mistake You Could Be Making
In McKenzie v. Lloyd, 2016 BCSC 1745 , a plaintiff was awarded $1,093,111.44 against a defendant driver. ICBC’s basic auto-plan only covered 20% of this amount, leaving the defendant on the hook for the rest. The goodfirm ICBC personal injury lawyers want to explain why driving under-insured can be a costly mistake. To avoid this mistake, drivers should consider purchasing extended liability and excess under-insured motorist protection.
Many people are content with the basic auto plan coverage. However, there are limits to this coverage which can have serious consequences. The basic auto plan coverage includes up to $200,000 in Third Party Liability coverage. This means that if you are responsible for a crash, ICBC will pay up to $200,000 on your behalf for damages. However, if you cause an accident where someone is severely injured, the damages may well exceed this.
Although large US style personal injury awards are not common in Canada, personal injury cases in BC can still result in large awards that may exceed a driver’s coverage. As an example of some recent cases, in Starchuk v. Hannig, 2016 BCSC 1655, the plaintiff was awarded $442,540.70 in compensation for her injuries. In Mullens v. Toor, 2016 BCSC 1645 the plaintiff was awarded $454,472.43. In Purewal v. Li, 2016 BCSC 1792 the plaintiff was awarded $494,263.23. In all of these cases, the defendant driver is personally responsible for the amount in excess of the $200,000 coverage.
Extended Liability Coverage
To address this gap, many insurance brokers offer options to extend your liability coverage. Drivers can purchase from $300,000 to $10,000,000 in excess coverage. The cost can vary depending on the driver. The extra coverage will give protection in case of an unfortunate accident that exceeds your coverage limit.
Excess Under insured Motorist Protection
Another option is excess under insured motorist protection. This option provides an additional $1,000,000 in coverage for bodily injury in the event that you are hit by an under-insured or uninsured motorist. An example of when this coverage could be useful is in an accident involving an out of province insurer.
In British Columbia, auto plan mandates a minimum of $200,000 of coverage and anyone that has a BC licenses or whose car is insured by ICBC will have access to this coverage. However, American insurers and insurers from other provinces may not have this minimum coverage. If you are injured in an accident and the insurance of the other driver has a limit of $100,000, you will only be able to claim up to that amount from the insurance company, even if your injuries are more severe. To recoup the difference, you will be forced to sue the individual personally. However, this person may not have any money to collect.
In the event that you are hit by a driver with no insurance, your only recourse will be to personally sue the driver. The excess under insured motorist protection provides an additional $1,000,000 for coverage in the event of above mentioned situations. The coverage is also very affordable and around $25 dollars for the year.
No driver plans to have an accident or injure another person, but accidents can have serious financial consequences for the driver and the injured person. Additional insurance can protect you in case of an expensive accident.