Third-party liability insurance is mandatory in all provinces and territories. In some provinces, this is provided by government insurers while it is only available through private auto insurance companies elsewhere. Some provincial governments also mandate the price for private insurers. However, the minimum required limit is quite low and may not cover the true expense of a serious accident.
Third-party liability covers bodily injury to third parties. It can also cover legal expenses if you’re sued. For example, if you rear-end someone in Alberta, your insurance would cover the costs associated with any injuries sustained. If that driver sued you, this coverage would also help cover your legal expenses including defence costs, judgement awards and settlements.
Rogers Insurance’s car insurance brokers strongly recommend $2 million for third party liability auto insurance coverage due to the costs associated with accidents.
Another required coverage is accident benefits. This helps cover medical and death benefits for yourself and any passengers in your vehicle after an accident, regardless of fault.
Finally, direct compensation for property damage (or a variation of this) coverage is required.
Direct compensation property damage can help cover costs to fix or replace your vehicle if you’re involved in a collision that was caused by another driver. Even if you’re deemed partially at fault for the crash, you will receive partial benefits under direct compensation property damage (the rest you’ll need to pay out of pocket or use your collision coverage if it’s on your policy). It does not provide coverage, however, if you are fully responsible for an accident—for that, you will need collision coverage.
Direct compensation property damage was automatically added to the insurance policies for all Alberta drivers on Jan. 1, 2022. Learn more.
If you’re at fault in an accident (or partially at fault) this coverage will help cover the costs of repairs to your vehicle.