The right time to think about the kind of insurance protection you need for you and your family is well before an accident ever happens. You might assume that in the event you are injured in an automobile accident caused by someone else, the insurance company for the other person will cover the cost of any compensation you are entitled to. That is true in most but not all cases. Motorists in Alberta must carry liability insurance on their vehicles, but there are 3 key instances that you need to be concerned about when assessing the insurance coverage you need to protect yourself and your loved ones:
- The person who injures you has less liability insurance than your claim is worth; or
- The person who injures you has no liability insurance; or
- The person who injures you flees the scene in a hit-and-run.
Inadequate Liability Coverage
The current minimum required liability insurance for motor vehicles in Alberta is $200,000. On first glance, that may seem like plenty of coverage, and if you are the only person injured in the accident it may very well be. But consider this scenario: you’re in a car with 3 passengers and another vehicle runs a red light and hits you from the passenger side. You and all your passengers are injured in the accident. The other vehicle also has 3 passengers who are injured through no fault of their own. As a result of a single accident, 7 people are badly injured and the person who caused the accident only has $200,000 of liability coverage. That $200,000 is total coverage, and must be shared by all injured parties in proportion to the severity of their injuries and the value of their claims. If that is not enough to cover compensation for all the accident victims, who will pay the shortfall?
No Liability Insurance
Even though it is unlawful to drive without liability insurance in Alberta, many motorists drive without insurance for various reasons. Perhaps they cannot afford insurance but take the risk of driving anyway, or maybe they have simply forgotten to make a payment to their insurance company and the coverage has lapsed as a result. Whatever the reason, there are uninsured motorists on Alberta roads. In the case that you are injured by an uninsured motorist and they lack the coverage or the personal funds to compensate you for their injuries, there is a safety net in the form of the Motor Vehicle Accident Claims Fund. Unfortunately, the maximum coverage by the fund is $200,000 per accident. Just like the minimum liability coverage example above, that $200,000 is total coverage, and must be shared by all injured parties in proportion to the severity of their injuries and the value of their claims. If that coverage is not enough, how will the accident victims get proper compensation?
Hit-and-Run
Hit-and-run accidents are all too common on Alberta roads, but if you are injured in a hit-and-run accident, how will you be compensated for your injuries? As in the case of an uninsured motorist, the Motor Vehicle Accident Claims Fund is there to act as a safety net, but the same restrictions and limits apply. The maximum amount payable by the Fund is $200,000 per accident, to be divided among all injury victims proportionally. That may not be enough, especially if multiple people are injured in the accident, the injuries are severe, or there are other circumstances that raise the claim value such as a large income loss claim. Where can injury victims turn to top up that coverage?
Family Protection Coverage (SEF 44)
We want you and your family to have adequate protection so that in the event of an accident, you never need to worry about whether the other party has enough coverage. The easiest way to accomplish this is by using Family Protection Coverage on your own automobile insurance policy. This type of coverage is also commonly known as SEF 44, or the Family Protection Endorsement. An SEF is what’s known as a Standard Endorsement Form, and these forms are used to change the standard Alberta Automobile Insurance Policy in some way. In the case of SEF 44, the form is used to add Family Protection Endorsement to your automobile insurance policy.
What Does SEF 44 Do?
SEF 44 or Family Protection Coverage protects you and your family members in the event that any of you are injured in a motor vehicle accident, where you are either not at fault or only partially at fault, and the person or persons who caused the accident are underinsured, uninsured, or the accident is a hit-and-run. We highly recommend that every Albertan motorist purchase this coverage. It is optional, but many insurance brokers recommend it, so you may already be covered. The easiest way to find out is to call your insurance broker and ask.
How Much Will Family Protection Coverage Cost Me?
If you want to add SEF 44 Family Protection Coverage to your Alberta Automobile Insurance Policy, it is normally very affordable to do so. To find out the exact cost, call your insurance broker and ask for a quote to add SEF 44 to your policy.
How much Family Protection Coverage Will I have?
The amount of SEF 44 Family Protection Coverage you have is based on the amount of liability insurance you carry. For example, if your policy has $1,000,000 in Third Party Liability coverage, your Family Protection Coverage will also be $1,000,000. We suggest purchasing $2,000,000 in Third Party Liability coverage not only to protect you and your family in the event that you cause an accident, but also to ensure you have higher Family Protection Coverage. The difference is cost between $1MM and $2MM in liability coverage is normally minimal, and is worth it for the additional peace of mind it will bring you.
The Importance of SEF 44 Family Protection Coverage for Travelers
Many jurisdictions outside of Alberta have much lower liability insurance requirements. In the many US States, mandatory liability coverage is as low as $25,000USD. If you are injured in the United States, and require medical treatment in an American hospital, your medical bills can add up very quickly. If you’re a frequent traveler, that’s one of many reasons why you should talk to your insurance broker about having adequate SEF 44 Family Protection Coverage. It doesn’t matter where in the world an accident happens; if it involves a motor vehicle and you are not at fault or partially at fault, you can access your SEF 44 coverage to make up for shortfalls in the other person’s liability coverage.
How Does SEF 44 Family Protection Coverage Work?
If you are injured by another driver in a Motor Vehicle Accident in Alberta or out of the province, and that person is underinsured, uninsured, or unidentifiable in the case of a hit-and-run, you may be able to access your SEF 44 Family Protection Coverage. SEF 44 may cover the difference between the insurance or Motor Vehicle Accident Claims Fund coverage available and the value of your claim. Here are some common scenarios to illustrate how it works:
- You are injured by a driver with only $200,000 of liability coverage, but your claim is worth $1,000,000 or more. You have SEF 44 coverage of $1,000,000. You may access $800,000 of coverage from your own insurer under your SEF 44 coverage.
- You are injured by a driver with no liability insurance, and your claim is worth $500,000. You have SEF 44 coverage of $1,000,000. You can claim $200,000 from the Motor Vehicle Accident Claims fund, and access the additional $300,000 from your own insurer under your SEF 44 coverage.
- You are injured in a hit-and-run accident and your claim is worth $250,000. You have SEF 44 coverage of $1,000,000. You can claim $200,000 from the Motor Vehicle Accident Claims fund, and access the additional $50,000 from your own insurer under your SEF 44 coverage.
Limitations of SEF 44 Family Protection Coverage
There are 2 main limitations of SEF 44 coverage:
- It only covers you to the limit of your Third Party Liability coverage. If you have $1MM in liability coverage, and you are injured by someone else with $1MM, the maximum insurance claim you will be able to make is $1MM. SEF 44 is not “on top of” the at-fault party’s insurance unless you have more SEF 44 coverage than the at-fault party has liability coverage. In other words, if your SEF 44 coverage matches the liability coverage of the at-fault party, you will not be able to make an SEF 44 claim.
- The SEF 44 Endorsement is extremely favourable to insurance companies in the case of an accident with multiple injured persons, because it only requires insurance companies to pay money in excess of the at-fault party’s liability coverage, not money in excess of your claim value. Here’s an example to better illustrate the problem:
You’re in a car with 2 passengers and another vehicle runs a red light and hits you from the passenger side. You and all your passengers are injured in the accident. The other vehicle also has 2 passengers who are injured through no fault of their own. As a result of a single accident, 5 people are badly injured and the person who caused the accident has $1,000,000 of liability coverage which must be shared by all injured parties in proportion to the severity of their injuries and the value of their claims. You and the other injured parties each have a claim worth $300,000, for a total claim value of $1,500,000. The available liability coverage is only $1,000,000 so each injured party is entitled to $200,000. You want to claim the excess $100,000 from your SEF 44 Family Protection Coverage, but you are not able to do so. This is because you have SEF 44 coverage of $1,000,000, which matches the $1,000,000 of liability coverage available. The way the SEF 44 Endorsement is written means your insurance company doesn’t have to pay you the additional $100,000 under your SEF 44 coverage. If you had $2,000,000 in SEF 44 coverage, you still would not be able to access SEF 44 as the total value of your claim did not exceed $1,000,000.
Unfortunately, these gaps in coverage are unavoidable as, at time of writing, there is no insurance product currently available that covers this risk. Please contact your insurance broker for more details and insurance product updates.
How Do I Access SEF 44 Family Protection Coverage?
SEF 44 Family Protection Coverage is accessed through your own insurance company. The easiest and most common way that Albertans get access to their SEF 44 coverage is through an experienced personal injury lawyer who understands the complexities and nuances of the law, and has the knowledge to pursue all avenues to get you proper compensation for your injuries.
Alberta SEF 44 Lawyers
Since 1976, Litco Law has been helping injured Albertans get the compensation they need to get back to normal life. We will pursue the liability insurer, your SEF 44 insurer, and even the at-fault party personally to make sure you get what you’re entitled to. Our clients say we put the personal in personal injury law because we not only deliver great results, we also provide amazing service, because we truly care about you.
The world of injury law is confusing and complex, but the good news is that you don’t have to go it alone; we’re here to guide you every step of the way. If you have been injured in an accident involving any kind of motor vehicle including cars, trucks, motorcycles, and bicycles, we’re standing by, ready to help. It won’t cost you anything to speak with one of our experienced injury lawyers because our consultations are always free and without obligation. We’re available at your convenience, at our offices, on the phone, by video call, or at a location of your choice. And the best part is we don’t get paid until you get paid. Stop worrying about your claim, insurance coverage, and SEF 44, and call or email us today.
