How Much Auto Insurance Do You Carry?

[Admiral Yi]

That's different than what the Anglos are telling us.

[DontSayBanana]

That is definitely not the case.  The only thing that remotely comes close is that your first 2-point speeding ticket cannot affect your insurance.

This.  In fact, the state tacks on its own surcharge (PLIGA) that goes up with insurance basis points.

[KRonn]

Something's very different about Canada and the US.

You guys are all talking about liability coverage well under the minimum permissible by law here in Canada.  Moldy's online calculator though won't go above $500k, while CC and I are carrying multi-million liability.  And finally I specifically remember that upping the liability amount above a million really didn't cost all that much.

Yeah, there is obviously some difference here. In the U.S. there is State mandated liability minimums, usually they are very low. Some States are as low as $25k/50/25 or something ($25k per injured person, $50k per accident maximum, and $25k property damage)--which is very low for even run of the mill accidents. But often times parties settle for the maximum liability amount since most people that carry minimum coverage can't afford much more and have little else to go after once the policy is eaten up.

I have a $250/$500/$100 policy ($250k/person, $500k/max on personal injury per accident, and $100k max on property) which is as high as my insurer (Progressive) offered when I self-serviced on their website. My homeowner's also only has $300k in liability on it, and I think if I wanted higher I'd need to go request a special plan from my agent or go with a different insurer.

I do have umbrella insurance though which we try to keep a bit above our net worth, which is priced similarly to adding extra liability insurance to your auto policy seems to be in Canada. With my insurer you can buy umbrella insurance in $1m increments for fairly low increases in premium.

I also have an umbrella liability insurance policy, which I think is $1 million. I also have a Homestead Act on my home which gives me additional protection.

[Grey Fox]

That's different than what the Anglos are telling us.

Yep, just like everything else, it's different in Quebec.

[Scipio]

If by a chance you mean probability>0, then of course.

Anyone know the answer to my question: if a guy whacks me, does his liability pay for the damage to my car?

It's complicated, but basically, yes, less deductible. I'd recommend uninsured motorist coverage and comprehensive, but I am super risk averse.

No, not less deductible.  The other guy's liability coverage pays in full.  Liability coverage does not have a deductible.

Yeah, duh. I was thinking of collision.

[Malthus]

But the US is widely acknowledged to be the most litigious place in the western world - so why wouldn't you guys carry more liability insurance?

The natural question to me is the reverse: why are Canadians required to carry far more insurance than they can ever reasonably expect to need?

I don't think it is required. However, several features of the Canadian legal system make very high damages claims much less likely in Canada than in the US, meaning that the cost to insurers of offering high coverage is relatively low - and consumers like the extra protection for the very rare case, even if it is unlikely. This means the market favours people buying lots of liability insurance.

[KRonn]

But the US is widely acknowledged to be the most litigious place in the western world - so why wouldn't you guys carry more liability insurance?

The natural question to me is the reverse: why are Canadians required to carry far more insurance than they can ever reasonably expect to need?

I don't think it is required. However, several features of the Canadian legal system make very high damages claims much less likely in Canada than in the US, meaning that the cost to insurers of offering high coverage is relatively low - and consumers like the extra protection for the very rare case, even if it is unlikely. This means the market favours people buying lots of liability insurance.

The US should also follow Canada and change its liability and law suit system but the trial lawyer lobby owns too many politicians, has too much power.

[CountDeMoney]

re: personal liability:--It's sorta off topic, but in order to rent out my condo, I was told I needed to get $1M liability, minimum.  In case a sprinkler escutcheon slices somebody's skull open and they die slowly.

[Barrister]

But the US is widely acknowledged to be the most litigious place in the western world - so why wouldn't you guys carry more liability insurance?

The natural question to me is the reverse: why are Canadians required to carry far more insurance than they can ever reasonably expect to need?

The point of insurance though isn't to cover "reasonably expected" needs, or at least it's not the only purpose of insurance.  It's to cover against very remote but catastrophic possibilities.

I'm a safe driver - no tickets or claims in over ten years.  But it only takes a moments inattention to get into an accident, and if you have a really unlucky result you can have someone who is permanently disabled as a result.

[crazy canuck]

When walking the streets of Canada, remember all the drivers have a million in coverage. Be careful, but not too careful. 

Our systems are quite different.  If one follows this advice, not only will the award be fairly low, by American standards, but you will also be dinged for the contributory negligence of your act.  We dont settle to the level of insurance.  That level is there for the horrible hypothetical that, hopefully, will never occur but we have the coverage - at a low price - in case it does occur.

I dont quite understand why you folks have such low coverage given the large amounts of potential awards in the US.  Bankruptcy isnt that big of a deal?

[Grey Fox]

When walking the streets of Canada, remember all the drivers have a million in coverage. Be careful, but not too careful. 

Our systems are quite different.  If one follows this advice, not only will the award be fairly low, by American standards, but you will also be dinged for the contributory negligence of your act.  We dont settle to the level of insurance.  That level is there for the horrible hypothetical that, hopefully, will never occur but we have the coverage - at a low price - in case it does occur.

I dont quite understand why you folks have such low coverage given the large amounts of potential awards in the US.  Bankruptcy isnt that big of a deal?

Our deterrant is that the court is just not going to give you much money.

Their deterrant is that if you ask for too much you get nothing because the other side will declare bankruptcy.

[The Brain]

Americans are too big to fail.

[Admiral Yi]

The point of insurance though isn't to cover "reasonably expected" needs, or at least it's not the only purpose of insurance.  It's to cover against very remote but catastrophic possibilities.

I'm a safe driver - no tickets or claims in over ten years.  But it only takes a moments inattention to get into an accident, and if you have a really unlucky result you can have someone who is permanently disabled as a result.

The question is how much of the tail of the probability distribution one wants to cover.  Obviously even with a mill you're not covering 100% of risk.

You sure about that legal minimum you mentioned earlier?  Other Canadians are giving different answers.

[Eddie Teach]

Americans are too big to fail.

You should go take a look at Dorsey's pictures.

[crazy canuck]

You sure about that legal minimum you mentioned earlier?  Other Canadians are giving different answers.

He is correct.  It is just that the minimums differ from jurisdiction to jurisdiction.