The police officer visits you in hospital and just wants a minute of your time to take a statement. She’s quick and efficient; takes the necessary information and prepares to go. As she’s leaving, she confirms that the other driver will be charged with Careless Driving. One other thing – the other driver will also be charged under section 2(1) of the Compulsory Automobile Insurance Act; he had no insurance on his car. You look at your leg encased in plaster, the I.V. line taped to the back of your wrist. You may never work again. You’re certainly not going back soon. What will you do?
Your own insurer will pay a small income replacement benefit; no more than $400 per week (unless you purchased the optional top-up but you didn’t – you’re not even sure what that is and can’t remember your broker mentioning it). You may be lucky enough to have short term disability coverage from work. Maybe long term disabiltiy coverage. If you don’t, you have a problem. In normal circumstances you’d ask the other driver’s insurance company to compensate you for your loss of income. In this scenario, you can’t; the other driver has no insurance coverage. Where do you go?
You will start with your own insurance company. All automobile policies in Ontario are the same. We have a standard policy. Every standard policy includes a section that covers you against losses caused by uninsured drivers. Uninsured motorist coverage claims are made to your own insurance company. Your insurer will assign a separate adjuster to deal with this claim. This adjuster will look at your claim in the same way that the other driver’s insurance company would have done if he had been insured. If you have a valid claim against the uninsured driver, your own insurance company will pay it. There’s a catch. This part of your policy will only pay as much as the minimum statutory third party coverage limits in the jurisdiction where the crash happened. In Ontario, the minimum statutory third party coverage limit for car insurace is $200,000. This is the lowest amount of coverage a driver in Ontario is allowed to carry for third party limits. $200,000 may seem like a very small amount but some U.S. states such as Tennessee have as as little as $25,000 in minimum third party coverage limits. If you are badly hurt, $200,000 will not come close to properly taking care of your needs. What can you do if your real loss is much higher than $200,000?
You can add protection to your own policy. While every driver’s policy of insurance in Ontario is standard, you can add to it. An ‘add-on’ is called an ‘endorsement’. Most brokers include a Family Protection Endorsement in your policy. This is sometimes called the underinsured driver endorsement. A driver who has no insurance is by definition, underinsured; grossly underinsured. This endorsement allows you to make a claim with your own insurer for compensation over $200,000 up to the maximum amount of third party liability coverage that you have on your own policy. If you purchased $1,000,000 of third party liability coverage, the Family Protection Endorsement will allow you to claim up to this amount from your own insurer for losses caused by the at-fault uninsured driver.
It is vitally important that your policy includes the Family Protection Endorsement. Ask your broker if it does. If not, ask him to add it today. This endorsement is your most secure line of defence against loss caused by an uninsured driver.