Do you have adequate insurance coverage?

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Do you have adequate insurance coverage?

Ever heard anyone say that sometimes we are our own worst enemy? This is certainly the case in terms of how most of us act when dealing with our own insurance.

Have you ever heard anyone say that sometimes we are our own worst enemy? This is certainly the case in terms of how most of us act when dealing with our own insurance company. Thinking about what would happen if we get hurt in a car accident is just about as daunting as planning for our own funerals. The big difference of course is that while we all have to die (eventually) there is no reason that we all have to be injured in car accidents along the way. This makes accidents just something we don't like to think about period. And that is the only possible explanation for the following realities:

1) Although most of us are routinely and regularly driving around in a motor vehicle that weighs several thousand pounds at high rates of speed many of us may not have adequate liability coverage should we be at fault in an accident.

Pursuant to the provisions of the Insurance Act the minimum amount of liability coverage we must carry is $200,000.00. The majority of auto owners carry 1 million in liability coverage and some have 2 million or 3 million (if it is part of an umbrella policy).

We are too quick to simply assume that 1 million is adequate coverage. Here are some reasons why 1 million dollars might not be enough if you cause an accident:

a) More than one person is injured in the accident and bringing claims against you, i.e. what if there are passengers in your car and passengers in the other car who are injured and there are multiple claimants?

b) There is a wage loss claim involving a relatively young person or the wage loss claim involves a higher earner such as a professional.

c) The claimant is catastrophically injured.

In any of the above scenarios it is in fact quite unlikely that 1 million dollars would be a sufficient amount of coverage to protect you from personal exposure. If our insurance will not cover losses sustained by claimants in an automobile accident those claimants will have the right to personal assets and income stream to collect on a judgment. It would seem then at least as a starting point your insurance broker should make some inquiries when selling you your policy of insurance and determine if you have an asset base that needs be protected.

Do you have adequate insurance coverage?

2) Most of us do not have access to optional benefits (housekeeping, caregiver) and enhanced coverages (medical rehabilitation benefits or income replacement benefits).

Your automobile insurer has obligations to you if you are hurt in an accident, even if the accident is your fault. Your own insurer has to pay for medical rehabilitation benefits up to a maximum of $50,000 for a period of 5 years following the accident. They may also have to pay income replacement benefits or non-earner benefits if you are disabled from working or your activities of daily living as the result of the injuries you sustained in the accident.

Every few years it seems the statutory benefits available to consumers are further reduced. This transpires through negotiations between the insurers and the government and then the changes become law without many of us realizing that our access to benefits if we are hurt in an accident has been reduced.

That's why in order to ensure that you have the access to the best/most benefits if you are hurt in an accident it is very important to ensure that you upgrade your policy to buy every possible applicable coverage. The cost will be nominal to you especially when compared to the increased benefits you will be able to access if you are hurt in an accident. Brokers and consumers are too hasty to dismiss these benefits as not being needed, trust me if you are hurt in an accident they will be needed.

The take away from this commentary is buy 2 million dollars in liability coverage and buy all the upgrades/optional coverages for yourself as part of your own policy of automobile insurance. If you have any question about either of these pointers please do not hesitate to give me a call. I welcome your call on my direct line 519-497-7421.

Sincerely,

Lisa Morell Kelly,

Direct line 519-497-7421