What You Should Know About Third-Party Liability Insurance in Alberta

What You Should Know About Third-Party Liability Insurance in Alberta

A car is a precious investment that is worth protecting with adequate insurance. However, with the various kinds of policies available, it can get confusing as to which one you should purchase. In any case, you would require third-party liability coverage since it is mandated by Canadian law. This means you cannot drive on Canadian roads until you have adequate third-party liability insurance.

For detailed info on auto car insurance, visit: A reliable broker like Surex can help you choose the right amount of insurance. Keep reading to gain a detailed overview of third-party liability insurance. 

What is third-party liability insurance and why is it important for motorists in Canada?

This insurance covers the damages caused by the policyholder to the property or vehicle of the other party. It also covers their cost of medical expenses for injury treatment.

For example – you are driving on the road and cause an accident due to your ignorance or negligence. The driver of another vehicle would naturally demand you to pay for the damages and injuries, which is an expensive affair. It is where third party liability insurance in Alberta comes in handy as it covers all your liabilities associated with the accident.

It is mandatory to sign-up for third-party auto insurance coverage in Alberta. The insurance provides cover for the following –

  • Damage or injuries caused to another person – It includes medical expenses for injured cyclists and pedestrians.
  • Compensation for property damage of a third party – Expenses such as the toppling of business advertisements and signs and neighbour’s fence damage.
  • Personal accident cover – To meet the repair expenses of the vehicle damaged in the accident.

It is also essential to understand first and second-party liability insurance here. Unlike third-party car insurance covers damages, first-party liability insurance will cover damages that occurred to your car in an accident.

Here, the first party refers to the car owner, the policyholder. Though it’s not mandatory by law in Alberta, first-party coverage is automatically added to third-party liability insurance. In the case of second-party liability insurance, the insurance company provides cover and compensation for the losses or damages that occurred to your vehicle by the other driver.

Third party liability insurance in Alberta — How does it work?

If a third party gets injured or killed due to a car accident caused by you, you can pay for the associated costs and losses using third-party liability insurance. The accident settlement amount in Canada averages around $350,000 as medical bills and repairs are too high. In Alberta mandatory third-party liability coverage saves the policyholders from the financial burden which could come as a consequence of the accident.

What affects the cost of third-party insurance for motorists in Canada?

Since this auto insurance is compulsory by law in Alberta, insurance providers add it to the regular auto insurance policy. But you may need one if you haven’t signed up for any insurance. When looking for a car insurance deal, here is the checklist for you so that you place the right bet.

  • Determine the features that you need in your policy
  • Compare the insurance premium rates and covers offered by different insurance companies
  • Find your ideal insurance provider and discuss the premium
  • Read the contract carefully before signing

Location of the driver

The amount of coverage depends mainly on the residential area of the individual. Hence, it is recommended to learn about the rules and regulations associated with the third-party liability insurance provided by the insurer in your area.

The general requirement age of $200,000. However, a driver would need insurance of as much as $500,000 in Nova Scotia and as little as $50,000 in Quebec.

Alternatively, you may connect with an insurance broker as they have extensive knowledge of the insurance industry. Plus, they have good experience and skills in finding a policy that meets the client’s needs and, at the same time, complies with the coverage requirements of the area.

Coverage requirement for the driver

The minimum average value of third-party liability coverage in a car insurance policy ranges from $200,000 to $1,000,000 in Alberta. Less coverage is always cheaper, but signing up for a higher value is always wise. If the claim amount exceeds your coverage value, you’ll have to pay for the remaining amount out of your pocket.

Down the line, it will prove to be a costly affair. Therefore, signing up for an amount slightly higher than the minimum coverage requirement is essential. However, initially, you can opt for low coverage and increase the liability limits later on.

Driving pattern and average time spent on the road by the driver

You need to opt for third-party liability cover of a higher limit under the following conditions –

  • If you drive majorly at night or on highways,
  • If you drive outside of your province,
  • If you spend more time driving on the road (due to job constraints or any other valid reason),
  • If you frequently drive in unpleasant conditions,

Generally, a higher limit of third-party liability insurance increases insurance costs to an insignificant value. Therefore, it’s worth getting coverage of a considerable value if the risk of an accident is high in your case. Check out the third-party liability insurance options offered by insurers in your area. Take time to compare and research an insurance cover fitting your budget and lifestyle. 

Third-party liability insurance in Alberta — Endnote

So the bottom line is that third-party liability insurance is mandatory and a legal requirement in every territory and province of Canada. The coverage requirements may vary according to the specific requirements of the individuals, location, and insurance policies.

For example, in Alberta drivers must have the minimum value of coverage for drivers is $200,000. However, the average value of liability coverage purchased by drivers in Canada ranges from $1,000,000 to $5,000,000.

Overall, mandatory third party liability coverage in Alberta safeguards the interest of both drivers and the other party. Hence, purchasing auto insurance with third-party liability coverage has been made compulsory for individuals in the province.

We wish you the best of luck while shopping for insurance.

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