As a senior personal injury lawyer, when I am hired to represent someone injured in a serious motor vehicle accident, one of the first things I want to find out from the insurance company for the bad driver, is the amount of insurance that is available (the third party limits), to know if there will be enough money to pay for the damages I will be claiming for my client, the injured victim.
As for the bad driver, his concern is whether the amount of insurance on his vehicle (third party limits), is enough to pay the settlement or Court judgment. If it isn’t, he or she will have to personally pay any shortfall (deficiency).
If the bad driver were someone like you or I, who have worked many years to accumulate our assets, this can be a scary time. The insurance company will defend the claims and pay any settlement or judgment up to the amount of the policy limits. However, if that is not enough to pay the entire claim, the bad driver has to pay the difference.
Insurance companies, like ICBC, make it possible for you to purchase a little insurance or a lot of insurance; it’s pretty much up to you, although the minimum you have to buy is $200,000.00, for what is called Third Party liability insurance; this is the part of your insurance that protects you when you or someone operating your vehicle is responsible for an accident. I expect it is usually a budget issue, when young people, particularly, opt for smaller limits such as $200,000.00 or $500,000.00. No one expects to be in an accident, never mind being the cause of the accident.
From my many years of experience, the more insurance you have on your vehicle the better. I say that because in the situation of a serious injury, if the injured person requires someone to care for them in the future, and if the injured person is reasonably young and not able to work for a long time, the amount of the claim can be in the hundreds of thousands of dollars and in some cases, into the millions.
You probably never thought that by not buying enough insurance coverage, you were putting a loved one or family member at risk of not being able to be properly compensated because you didn’t purchase enough insurance. You may think of the injured person as a stranger in another vehicle.
But, consider this scenario: you are driving your family members, who are passengers in the family car, and you are responsible for an accident and one or more of your family members are injured very seriously. For this example, assume it is one of your young children.
What if the injuries are so severe that life-long care is required for your child; the injuries are so severe, the child when it grows up will not be able to hold down a job, and therefore not able to support themselves. For that family member to be compensated, a claim needs to be made against you as the driver of the vehicle, the person responsible for the injuries.
I have been handling claims of this nature for more than 30 years and, trust me, $200,000.00 or $500,000.00 will never be enough to fund the requirements for your loved one. Being responsible for a tragedy like that is not something you want to live with. The message is don’t under insure your own vehicle.
With the basic policy and the automatic one million dollars of UMP coverage, the amounts that are immediately deducted from UMP reduces the excess coverage significantly.
To fund the type of care, comfort and pain and suffering your own family member may require could cost in excess of two million dollars, if the injuries are life long and the not likely to improve. There may be some public funding available, but never enough.
My message to you young people is do not put you or your own family members at risk by not putting enough insurance on your vehicle. I mentioned UMP. Some of you may not understand what that is and how it works, so I will cover aspects of that next time.
The information provided above is for educational purposes only. This information is not intended to replace the advice of a lawyer or address specific situations. Your personal situation should be discussed with a lawyer. If you have any questions or concerns, contact a legal professional.