Personal Injury... What are Insurance Limits and Why Do They Matter?

Tara Miller – March 2016

Personal Injury… What are insurance limits, why do they matter to you and how can you protect yourself and your family?

When you or a loved one have been injured in a motor vehicle accident as a result of the negligence of another driver, the other driver’s auto insurance policy responds to pay your personal injury claim to the limits of the auto insurance they have.  The at-fault driver is then personally responsible for any amount of your personal injury claim over and above their available auto policy insurance limits.

Other than knowing that a driver must have the provincially mandated minimum insurance limits to cover third party personal injury and property damage claims (in Nova Scotia all drivers are required to have at least $500,000), you have no control over what that driver’s insurance coverage may be.  This can be a very real concern as the amount of the other driver’s auto policy insurance limits can have a huge impact on your ability to recover fair and full compensation for personal injury damages, particularly in accidents which leave you or your loved ones with significant injuries.

Consider the following scenarios:

While you are powerless to control what insurance an at-fault driver may have to respond to a personal injury claim, you can protect yourself and your family by ensuring you have your own additional insurance coverage for situations when there is simply not enough available insurance to fairly and fully respond to your personal injury claim.

In Nova Scotia, this protection comes in the form of additional insurance to your auto policy called a SEF No. 44 endorsement or “Family Protection Endorsement”.  While it is not mandatory to have in an auto insurance policy, SEF 44 insurance coverage can be purchased for a small additional premium ($17/year for my family) and is typically included by most insurance companies in their auto insurance packages.  The purpose of the SEF 44 policy is to provide additional coverage to named insureds, as well as their family, for injuries or death resulting from motor vehicle accidents involving uninsured or inadequately insured motorists.  It has been referred to as “last ditch” or “safety net” insurance as it is intended to be used to help restore the insured to their pre-accident position when they cannot recover damages through any other sources.

SEF 44 insurance is excess insurance which will pay if the other driver’s policy limits are less than your SEF 44 policy limits.  SEF 44 insurance cannot be stacked on top of available insurance limits.  For example, if an at-fault driver’s insurance limit is $500,000 and your SEF 44 limit is $1,000,000, the maximum you could obtain through the SEF 44 policy is an additional $500,000.  In this scenario:

For more information on this or any other issue arising from your motor vehicle accident claim for personal injury, please contact Tara Miller at at MDW Law.

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