Last week, I wrote about this little-known but very important type of insurance—umbrella insurance. Before reading this article, I suggest you read my previous blog Umbrella Insurance: Coverage to Help you Weather the Storm! in which I cover this insurance in detail.
My clients often ask me: “What could possibly go so wrong? Why do I need so much coverage?” As promised, here are 6 great reasons to have umbrella insurance.
The current exchange rate is $0.77 and travelling in the States is not just expensive, it’s also risky. Your $2M coverage is only worth $1.54M, and your $1M coverage is only worth $770K. Americans are known for their lawsuit culture. Lawyers run countless advertisements and are easily accessible.
Medical fees are not covered outside of Quebec, and in the event of bodily injuries the bill could be quite expensive. Health insurance won’t cover those injured as a result of your actions, it’s not the same as it is in Quebec. You don’t need to go very far. It could happen in Ontario or during a night of drinking at an all-inclusive resort in Mexico.
Do you remember this young hockey player who recently checked an opponent from behind, causing the opponent to become a quadriplegic? He and his family had to pay $8M. Luckily, they were insured for more than $2M. Will this case set a precedent? Will the damages awarded in lawsuits be increasingly higher in Quebec? This could happen to kids playing in the school playground or even to us in our day-to-day lives.
We are also responsible for our pets. What happens if your dog attacks someone who then loses the use of a limb or suffers serious consequences as a result of this attack? We have heard many stories about dogs who attacked passersby, and unfortunately, most often children. What price can you put on the face of a child, who will bear the scars for life? And what price would it be if the child lost the use of an eye as a result of this attack?
The SAAQ will not indemnify victims of bodily injuries that occur using an off-road vehicle, i.e. snowmobiles, all-terrain vehicles, four wheelers, utility terrain vehicles, motocross bikes, etc. If you own a recreational vehicle and injure people while driving it, they could sue you for many reasons, namely bodily injuries (permanent or not), loss of revenue, loss of enjoyment, personal support costs (housekeeper, home-care nurse, babysitter, physiotherapist, psychologist, etc.) In case of death, you could be responsible for paying funeral fees, loss of enjoyment for family members, as well as financial losses.
You live in an apartment on the Plateau Mont-Royal. A fire breaks out. Your home quickly goes up in flames, and the fire spreads to neighbouring buildings. The investigation reveals that the fire could have been prevented had you exercised due care and diligence. Lawsuits start to pile up. Your building’s owner claims the cost to rebuild; the owners of neighbouring buildings claim the cost of the damage to their buildings, as well as the loss of rental income; neighbouring tenants claim the cost of lost and damaged property, their living expenses, lost wages, loss of enjoyment due to bodily injuries… The list can go on and on, and the costs may quickly exceed $2M.
Umbrella insurance may step in first in some cases. For example, if you own a house outside of the country, it is possible to get primary insurance, for civil liability, for these premises. Umbrella insurance may cover you in the case of personal injury related to libel or slander.
These situations rarely occur but they are nonetheless risky. When unforeseen events occur, people often don’t have enough coverage. Umbrella insurance gives you peace of mind at a low cost. Average annual premiums range from $100 to $500. Contact your Lareau broker for more information. In the meantime, be safe.
