So, what does third-party insurance cover?
Third-party insurance covers damages incurred by anyone else that were deemed to be your fault. Depending on the angle of impact, who was sitting where and the state of their car before the accident (all factors out of your control), this could include:
- Medical treatment
- Physical therapy
- Trauma counselling
- Lost wages
- Funeral expenses
- Vehicle repairs
- Personal property damage
- Legal defence costs for any additional lawsuits
The importance of third-party insuranceWhile third-party coverage is used exclusively for other people’s costs, it doesn’t only apply to drivers and passengers. If the incident involves a pedestrian or a cyclist, your third-party insurance would still cover you. And if you drove through a coffee shop window, it would be used to cover the property owner’s expenses.
And because fault can be spread across multiple people in Ontario, your third-party liability insurance may still come into play if you’re only 1% at fault. Again, depending on factors out of your control, the costs of that tiny portion could be astronomical.
For that reason alone, third-party liability insurance is very much worth the cost.
And if you need more proof, consider that the average cost of a third-party liability claim in Canada is around $15.5K. But it could just as easily be 1,000x that, which happened in Ontario when a child hurt in an accident was awarded over $11M.