Gap between policy limits and lawsuit demands

Gap between policy limits and lawsuit demands

⚖️ The Growing Gap Between Policy Limits & Lawsuit Demands in Canada 🇨🇦

In today’s increasingly litigious environment, many Canadians are discovering—too late—that their liability coverage no longer reflects the scale of modern legal claims.


💥 The Issue
Lawsuit settlements and jury awards are on the rise across Canada, fueled by escalating medical expenses, loss-of-income claims, and evolving legal precedents. Yet many personal and commercial insurance policies still carry outdated liability limits—often capped at $1 million or less.


🚨 The Risk: Personal Financial Exposure
If you’re sued and the judgment exceeds your policy limit, you’re responsible for covering the difference. That shortfall can quickly become a financial crisis.


📌 Common Scenarios Where Gaps Arise:
• Serious auto accidents involving injury or death.
• Slip-and-fall or property-related liability claims.
• Personal injury lawsuits stemming from dog bites or social host liability.
• Professional liability or home-based business exposures.


🔍 A Real-World Example
A $2.5 million judgment is awarded in a motor vehicle injury claim. The insured’s policy limit? $1 million. Without umbrella coverage, they faced a $1.5 million shortfall—placing their personal assets at risk.


How to Close the Gap:
• Review your current liability limits—don’t assume they’re sufficient.
• Consult an insurance advisor to evaluate your risk profile.
• Consider umbrella or excess liability insurance for broader, higher-limit protection.
• Reassess your coverage annually, especially after significant life or financial changes.


🛡️ Insurance is only protective if it keeps pace with the realities of today’s legal landscape. Make sure your coverage evolves with your risk.


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