When it comes to car insurance, third-party liability coverage is crucial, to the point that every Canadian province and territory mandates all drivers have it. But what makes this coverage so vital?
In this article, you’ll discover what third-party liability insurance entails and what it covers. By understanding the fundamentals of this essential coverage, you should quickly see why it’s mandatory and how it plays a critical role in protecting your financial well-being and offering you peace of mind on the road.
What Is Third-Party Liability Insurance?
Third-party liability is a type of car insurance coverage designed to protect you financially if you unintentionally cause harm to another person or their property. Without this type of coverage, you could face substantial financial burdens from legal claims, medical expenses, and repair costs, potentially leading to significant personal and financial hardship. For this reason, it is mandatory in every Canadian province and territory.
What Does Third-Party Liability Insurance Cover?
If you are ever involved in a car accident that damages another person’s vehicle or property, causes injuries, or even results in their death, you could be held liable for everything from repair expenses to medical bills and legal fees. As you might imagine, these costs can add up quickly. Thankfully, third-party liability insurance exists to cover those types of costs.
In fact, here are some examples of what third-party liability insurance may cover in Canada depending on the situation.
- Medical bills for injuries to others
- Legal expenses, including attorney fees and court costs
- Property repair or replacement costs for damage you cause
- Lost wages for injured parties
- Rehabilitation costs for injured parties
- Settlements or judgments in a lawsuit
- Funeral costs in the event of accidental death
Minimum Liability Car Insurance in Canada
Every driver must have third-party liability coverage included in their car insurance policy. However, the minimum amount of coverage you need to have depends on your location. Below you will find a list of the minimum liability car insurance in each province and territory across Canada.
Ontario: Your car insurance policy must include a minimum of $200,000 in third-party liability coverage if you live in Ontario.
Quebec: The car insurance policy you purchase from a private insurer in Quebec must include a minimum of $50,000 in “civil liability” coverage, however, the minimum offered by most insurers is $1 million. This is in addition to the coverage provided by Québec’s public automobile insurance plan, which offers no-fault compensation for injury or death resulting from an accident.
New Brunswick: Your car insurance policy must include a minimum of $200,000 in third-party liability coverage if you live in New Brunswick.
Nova Scotia: Your car insurance policy must include a minimum of $500,000 in third-party liability coverage if you live in Nova Scotia.
Prince Edward Island: Your car insurance policy must include a minimum of $200,000 in third-party liability coverage if you live in Prince Edward Island.
Newfoundland and Labrador: Your car insurance policy must include a minimum of $200,000 in third-party liability coverage if you live in Newfoundland and Labrador.
Alberta: Your car insurance policy must include a minimum of $200,000 in third-party liability coverage if you live in Alberta.
British Columbia: In British Columbia, it is mandatory to have the ICBC Basic Autoplan, which includes $200,000 in third-party liability insurance. However, there is an option to increase your coverage limit up to $5 million with “Extended Third Party Liability coverage.”
Saskatchewan: In Saskatchewan, you must have basic plate insurance coverage through Saskatchewan Government Insurance (SGI), which includes $200,000 in third-party liability insurance. However, there is an option to increase your coverage limit up to $5 million.
Manitoba: In Manitoba, it is mandatory to have Autopac Basic car insurance, which includes $500,000 in third-party liability insurance. However, there is an option to increase your coverage limit up to $10 million.
Northwest Territories: Your car insurance policy must include a minimum of $200,000 in third-party liability coverage if you live in Northwest Territories.
Nunavut: Your car insurance policy must include a minimum of $200,000 in third-party liability coverage if you live in Nunavut. Yukon: Your car insurance policy must include a minimum of $200,000 in third-party liability coverage if you live in Yukon.
How to Buy Third-Party Liability Insurance with YouSet
Buying insurance that includes third-party liability coverage is not only easy but affordable with YouSet. When you get a car insurance quote, third-party liability coverage will not only automatically be included, but our algorithms will also apply exclusive discounts, potentially saving you up to 29%! It’s the best way to get better coverage for less money and in less time.