In its simplest form, an insurance policy is an agreement to cover you against a loss. Most people have a few forms of insurance, for example: life insurance, home insurance, disability insurance, medical insurance, and car insurance. When buying insurance, you are entering into a contract with your insurer and both you and your insurer have obligations under that contract.
Car insurance is mandatory in New Brunswick and Prince Edward Island, which means that every single vehicle registered in the Province needs to be insured. That’s the law. Year after year, you pay your insurance premiums and get a new insurance card that you stick in the glove box, but do you really know what you’re covered for? This article is meant to answer questions you may have about your car insurance policy.
In New Brunswick, the Financial and Consumer Services Commission has approved a Standard Automobile Insurance Policy. This means that every insured vehicle in New Brunswick has, at the very least, the same minimum coverage.
There are four major sections in the Standard Automobile Insurance Policy and these sections are explained below:
Section A – Third Party Liability
This section is commonly known as “PLPD” or “public liability and public damage”. This section of your car insurance policy is to cover you as owner and driver in the event that you injure someone or you damage property because of negligence. The minimum Section A coverage in New Brunswick is $200,000, but most people are insured for $1,000,000 or more. If you cause injuries or damage property that is assessed at a value higher than the Section A coverage of the vehicle you are driving, you are liable for the excess damages.
If you injure someone or you damage property because of your negligence, your insurance company is required, by operation of the insurance contract, to “cover” you for the injuries or damages you caused. Your insurance company is also required to defend you in the event that a lawsuit is filed against you. Your insurance company is required to respect its obligations as long as you respected yours.
Section B – Accident Benefits
This section is commonly known as “no-fault benefits”. Every single insured vehicle in New Brunswick has the exact same Section B benefits. You cannot forfeit this type of benefit or add to it. You can have access to these benefits if you’re involved in any type of accident, whether you’re at fault or not. Section B benefits cover medical and rehabilitation expenses, funeral benefits, death benefits, and loss of income benefits for the driver and passengers of the vehicle. A pedestrian that is hit by a vehicle can have access to the Section B benefits of the vehicle that hit him or her.
The maximum amount reimbursable for medical expenses resulting from the accident is $50,000 and the maximum amount of time to claim for medical expenses is four years after the day of the accident. This means that if you have had $50,000 worth of medical expenses after 2 years after your accident, Section B will stop paying for medical expenses. If you have had $30,000 worth of medical expenses at the 4-year anniversary of your accident, Section B will stop paying for medical expenses.
The maximum amount you can receive for your loss of income under Section B is 80% of your lost wages up to a maximum of $250 per week. These benefits are called “weekly indemnity” benefits. You can qualify for these benefits if:
a) you were employed at the time of the accident (even if you were not employed at the time of the accident, you may be deemed employed under certain conditions); and,
b) you suffered substantial inability to perform the essential duties of your occupation for 7 days out of the first 30 days from your accident.
You can receive these benefits for a period of two years following your accident if you meet the conditions above and you suffer substantial inability to perform the essential duties of your occupation or employment.
You can also receive these benefits after the two-year anniversary of your accident if your injuries continuously prevent you from engaging in any occupation or employment for which you are reasonably suited by education, training or experience. Contrary to Section B medical expenses, you can receive Section B weekly indemnity benefits until the day you die if you meet the disability definition.
Section C – Loss of or damage to insured automobile
You have a choice to make for Section C coverage when buying car insurance. You can choose to forgo Section C coverage, or you can choose to cover your vehicle from:
All perils – This coverage combines all perils, collision and comprehensive
Collision or upset – This coverage pays for damage to your vehicle caused by a collision with another object or by upset
Comprehensive – This coverage includes specified perils but also pays for all other insured damage caused to your vehicle (e.g., fire, theft, vandalism), except for collision or upset
Specified perils – This coverage pays only for losses caused by perils specifically listed in the policy
You can also choose to have a deductible and specify what amount.
Section D – Uninsured Automobile and Unidentified Automobile Coverage
This section is meant to cover you if you suffer injuries in a car accident and the vehicle of the at-fault driver is not insured, or the other driver leaves the scene in a hit-and-run. As the at-fault party does not have insurance or cannot be identified, you are unable to file a claim for your injuries which would be covered by the other vehicle’s Section A insurance. Section D is there to cover you in this specific circumstance. The maximum coverage under Section D is $200,000, even if you yourself have $1,000,000 Section A coverage or more.
SEF 44 – Family Protection Endorsement
This coverage is meant to protect you or your family members if you are injured because of another driver’s negligence and the other driver does not have enough insurance to cover your losses. Usually, your SEF 44 coverage is the same as your Section A coverage. Here is a practical example for SEF 44 coverage: you are rear ended by someone who has $200,000 in Section A coverage, you have an SEF 44 of $1,000,000, and you have damages worth $500,000 – in this situation, the other driver’s Section A would pay $200,000 and your own SEF 44 would pay you $300,000 to cover your total loss of $500,000.
The information provided above is intended as general information only. Insurance policies, like other contracts, have exceptions, limitations, exclusions, and there is always room for interpretation. Do not hesitate to contact your insurance company if you have questions about your car insurance coverage.
If you were injured in a car accident, contact a personal injury lawyer without delay in order to know your rights before talking to insurance company representatives.