Liability Auto Insurance - The Sad Case of Not Enough

Online, January 5, 2013 (Newswire.com) - Third-party auto insurance liability protection or simply "liability" coverage in your Ontario car insurance policy covers the driver for any harm and suffering leading to losses that one might cause to others. It's usually the forgotten part of auto insurance coverage, but in the rare and somewhat probable occurrence, chances are a driver's existing Ontario car insurance policy doesn't provide for adequate coverage if one causes a third person or party to suffer beyond your policy coverage amount. All Ontario drivers require sufficient liability auto insurance policy coverage.

Toronto, Ontario Driver Sued for Amounts above Liability Coverage
That's exactly what happened to John of Toronto, Ontario. John was driving his car one clear summer evening. He pulled in to a gas station to fill his car tank with gas. Once completed and about to pull away, about to veer on to the road, he hadn't noticed the teenage boy riding his mountain bike bicycle on the side of the road. That's when John accidentally hit the boy. Two years later and after several assessments, physicians deemed the boy as having some brain damage that would affect his ability to gain or advance future employment as he matured. The lawyer representing the boy filed a claim for over two million dollars, stating that at such a young age the boy would expect to have a long life and "income replacement" would have to apply. This seemed fair, it wasn't case of the boy's lawyer simply out to get as much as he could from the situation, after all lawyers in Ontario are not completely on a contingency basis as they are in other "common law jurisdictions when filing and suing for auto insurance claims.

Toronto Judge Awards Victim with $2 Million
In the end the judge did award the boy with over $2 million in damages as a result of the accident, again appearing quite fair, all facts considered. But here is where things didn't seem quite fair to John: his Ontario auto insurance policy provided him for One Million in third party liability coverage - which is the typical amount for most Toronto and Ontario driver's insurance policies. The settlement for two million was paid for in part by his insurance company - one million - the amount of the liability insurance coverage on his policy - and the balance John was personally liable for. John was forced to sell off much of his personal assets that he accumulated for several years, in order to liquidate and generate cash to begin to pay his share of the difference owed, a total of about one million dollars. The sad part, in addition of the obvious about the boy, is that John was forced out of retirement and back to work simply to be able to generate enough income to put food on his table and pay basic living expenses. The deficient liability insurance coverage nearly bankrupt John.

Shortage of Liability Auto Insurance Coverage - Lessons Learned

In speaking to a representative of Ontario car insurance broker Thinkinsure.ca, they stated,

"We picked up on two key elements of learning from this sad case. The first, and less obvious, is that John did not have his own legal representation during this entire process of the law suit, which lasted nearly three years. Instead, he relied on his Ontario car insurance company's lawyer. If John had his own representation, who was there for John's own personal well-being and best interests, the results may have been different. After all, John did lose most of his assets in order to pay for his share of the settlement. Relying on your Ontario car insurance company's legal counsel does not reflect your best interest in cases like this and may in fact be a case of conflict of interest."

"The second and easily fixable lesson for all of us concerns the amount of Ontario auto insurance liability coverage a driver carries. If john simply had two million dollars in liability coverage - a very acceptable amount - he would not have suffered any personal financial loss and the entire settlement amount would have been paid for by his Ontario car insurance company."

"Speak to your Ontario auto insurance broker to find out what the best level of liability coverage is for you. Your broker can also provide cost comparisons to show you examples of what additional amounts you may have to pay for this additional liability auto insurance coverage."