Third-party liability car insurance quotes
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Matt Hands, Sr. Business Unit Director
Your car insurance policy protects you in several situations. Accident benefits provide compensation for any injury-related expenses resulting from an injury in a car accident. Collision car insurance coverage covers the cost of repairs for any damage done to your vehicle in an accident. In contrast, comprehensive car insurance covers the cost of repairs for any damage inflicted on your car in other scenarios (bad weather, vandalism, etc.). The most critical and mandatory type of coverage in your policy will always be third-party liability insurance.
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It sounds like a commercial insurance term businesses purchase to protect themselves should their work result in a lawsuit. To be held liable is to be held responsible. Third-party means it didn't happen to you, but to someone else. Third-party liability insurance protects you when you're at fault in a motor vehicle accident. It covers the victim's property and any medical costs due to injury. Third-party insurance pays the charges when someone makes a claim against you or your car insurance company. Third-party insurance is mandatory on all auto insurance policies across Canada.
For example, if you accidentally rear-ended another car, injuring the driver and damaging their vehicle, the other driver could file a claim against you. Your third-party liability insurance would cover their medical costs, loss of wages (if applicable), and repair costs to their vehicle.
Third-party liability car insurance covers:
- Medical costs for anyone's injuries (including pedestrians, cyclists, and fatalities)
- Repair costs to any vehicles you’ve damaged
- Repairs or replacement for damage to other people's property
The minimum amount of third-party liability insurance in Canada is $200,000, except in Quebec, where it's $50,000. However, every insurance company will recommend buying additional coverage. That's because one accident could easily exceed $200,000 – and you wouldn't want to be held financially responsible for the rest. While it can give you shorter-term savings on your monthly premium, it can cost your life savings following an accident.
Most Canadians purchase $1-5 million of third-party liability insurance for a broad safety net of coverage in almost all situations. Remember, third-party liability insurance doesn't cover the cost of any injuries or damage you have personally suffered due to an accident where you're at fault. For that, you would need accident benefits and collision coverage.
It's worth it to have at least $1-2million in liability coverage on your policy to protect yourself.
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If you're in an accident, and it was your fault, the people who suffered injuries or reported the damage to their property will immediately open a claim. They'll begin seeking medical treatment and get their repairs started.
In a no-fault province, everyone involved will deal with their own insurance provider for any claims. The insurance companies will sort out who owes what. In regions without no-fault insurance, you'll need to engage in legal action to sue the at-fault driver for damages. Depending on your provider, you may have to pay out-of-pocket to cover everything, or the treatment or repair facility can submit expenses directly to your provider.
Once repairs are complete and the injuries are healed, the claim can close. However, your car insurance company will review the case and offer them a settlement. If the injured does not agree on the amount, they can seek legal advice and open a lawsuit for pain and suffering, in some provinces.
When you’re ready to buy a new car insurance policy, or renewing, speak with the agent or broker over the phone and ask them about your third-party liability insurance limit. You can do so in-person or over the phone, at a bank/credit union, with an insurance company or insurance brokerage. If you haven’t already done so, we always suggest you start by comparing car insurance quotes online.
Do I need third-party liability insurance to rent a car?
Matt started his professional career at CARPROOF where he honed his marketing and analytical skills for over 3 years. Matt then took his wealth of experience to Ratehub.ca’s Toronto offices, working with insurance providers, agents, and brokers to grow and expand the Insurance business unit. He is a thought leader in the community and a valuable insurance resource to respected publications like the Globe & Mail, Toronto Star, Huffington Post, Yahoo News, and 680 news radio in Toronto.read linkedin bio
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