Is $1 million in liability coverage enough?

Published On: September 18th, 2020Categories: Personal Insurance

One million dollars in liability coverage sounds like a lot doesn’t it?

Many of us wish, me included, we had that kind of money sitting in our bank account right now! So, it’s a common thought that when deciding on liability coverage for our personal vehicles that $1 million must be enough coverage. Is it? 

For myself and my colleagues at Bryson, we pride ourselves in educating our clients so that they (you) can make informed decisions when it comes to protecting their livelihoods and their families. As an industry, we need to do a better job informing clients about potential liability costs and that starts with the conversations we have with those we serve. 

I also know the general purchaser of insurance is leary of the industry. I totally understand why some people believe that anything that costs more in insurance premium could be considered as only serving the insurance company and not you, the driver. Added premium for increasing liability coverage limits is very reasonable and, to be honest, we would likely win more if we only presented the lowest cost options. As a broker, we also have a fiduciary responsibility to serve our clients ethically and with integrity. 

We have all seen the growing number of personal injury law firms popping up throughout  Durham Region, Toronto and across Ontario. They advertise on television, radio, buses… everywhere. The market for injury lawsuits was not this big even 10 years ago here. Unfortunately, it appears this trend is only going to get worse.  

Outside of personal injury legal situations, expenses related to recovering from injury continue to rise as well. 

Consider an example: a pedestrian is struck by you while you are driving and suffers life-changing injuries. This individual hires a lawyer and files for estimated damages of $3 million dollars. Meanwhile, you only have a liability policy covering up to $1 million. What happens? 

If the case brought forward is successful (or if it is in process of settling out of court) the insurance company will pay out the $1 million limit but that is it. Where will the remaining funds come from? This is where protecting everything you have worked hard to accumulate is really put at risk. Lawyers can submit for asset searches, go after your home and garnish wages. It has the potential to have a significantly negative life-changing impact.  

If more people are injured as a result of your driving, the potential cost in this example starts to magnify greatly. Your liability limit remains flat while each injured individual has their own costs and expenses for which they are claiming. 

What options or endorsements do you have available? 

Purchase higher liability limits

Most of the premium for liability coverage comes in the first $1 million of coverage because most liability claims fall under that threshold. Adding more liability coverage is a very modest expense for the protection. 

Ensure you have the family protection endorsement in your policy

This is the other side. If YOU are injured in a car accident and that person has less insurance than you, this endorsement ensures your insurance company will cover any pay-out difference up to your limit. 

Have your insurance policy reviewed by our team

What are you covered for? Is it enough? Does it give you peace of mind? We are happy to review your current personal insurance policy and provide our recommendations with an end goal that you feel comfortable with your insurance protection. 

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