In Saskatchewan, anyone who registers a vehicle obtains the statutory minimum $200,000 liability coverage on that vehicle. Is that sufficient coverage? In many cases, the answer is “no”.
In addition to the statutory minimum coverage, you should consider obtaining a “package policy”, sometimes referred to as “auto extension insurance”. This coverage, obtainable in amounts of $1 to $5 million, will provide additional benefits and security. Let’s look at some of the reasons why a package policy is a good idea:
1) Lower Deductible
Under a package policy, you have the option of lowering your deductible from the $700 applicable under the statutory plate insurance. This means you will pay less out-of-pocket in the event of a claim in which you are deemed to be at fault.
2) Higher Injury and Death Benefits
Under a package policy, you are entitled to increased benefits for injury and death, over and above the statutory no-fault benefits. This includes receiving the additional 10% of your net income that is not paid under the no-fault income replacement benefits.
3) Additional Coverage Available
Under a package policy, you have the choice of a number of specific coverage options including: replacement coverage for a new vehicle; glass coverage; loss of use coverage; and coverage for the use of vehicles that you do not own.
4) Family Security Coverage
Sometimes referred to as an ‘SEF 44’ (Standard Endorsement Form 44), or family protection endorsement, this can be very significant coverage in many different scenarios. As discussed in a previous blog post “’No-fault’ Does Not Necessarily Mean No Opportunity for Legal Recovery”, there are circumstances in Saskatchewan in which you are able to sue to recover economic losses not covered by no-fault benefits, or for damages for pain and suffering if the at-fault driver is convicted of impaired driving or other specified offences. If you are able to pursue a legal claim but the at-fault driver has only the minimum coverage, you may be left undercompensated for your losses. If you have family security coverage, your coverage will be available to satisfy any judgment obtained up to your policy limit.
Looking at a simple example, let’s assume you are 40 years old and earn $125,000 per year. Due to injuries sustained in an accident (caused by another’s fault), you are no longer able to work. Under no-fault benefits, you would receive income replacement benefits at 90% of your net income but only to the statutory maximum (currently approximately $94,000 per year). Your economic loss would be approximately $31,000 per year, potentially over another 25 years (until age 65). While the at-fault driver’s statutory coverage would cover $200,000 of that amount, you would still have a significant loss. With family security coverage, you would be entitled to receive full compensation for the economic loss sustained (to the policy limit of your coverage).
5) Increased Liability Coverage If You Are At Fault
Again, even though Saskatchewan is a no-fault jurisdiction, if you cause an accident (due to your own negligence), you can be sued in a number of circumstances. These include claims for economic losses (covered above), or if you cause an accident in a province or state that is a tort rather than no-fault jurisdiction.
For example, if you cause an accident while driving in the United States or Alberta, the injured parties could sue you for damages. In a tort jurisdiction, this could include damages for physical injury and/or death, property damage, lost income, and costs of care. This could far exceed the statutory minimum coverage available. If you do not have additional liability coverage through a package policy, your assets and income could be at risk.
Package policies are generally very affordable, and provide significant peace of mind that you will be well looked after in the event of an accident, whether in Saskatchewan or elsewhere.
For more information on package policies, you should speak to your insurance broker. If you have been in an accident and have questions about whether a claim is possible, please feel free to contact Sheila Torrance.
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