Individuals must carefully re-examine auto coverage limits

In the wake of the introduction of Bill 18 in Ontario, and given an ever-increasing size of damage awards (often running in the multi-millions of dollars), everyone needs to re-think what qualifies as adequate limits.
Maurice Audet of Aon Reed Stenhouse made the above observation while speaking at the Ontario Risk and Insurance Management Society (ORIMS)’s professional development day.
He said the implementation of Bill 18, which addresses the potential liability of drivers, owners and lessees of motor vehicles or street cars, has shifted the onus of vicarious liability for damages arising out of use of an auto from the lessor to the lessee.
This in turn puts the auto coverage belonging to the individual leasing the vehicle either short-term or long-term as the primary policy on the vehicle.
The non-owned automobile coverage in the CGL may offer coverage if the individual driving the leased vehicle was on business, but it will only serve as excess coverage, unless the vehicle was leased in the corporation’s name, he added.
“But when we take a look at the size of the losses that have been happening [Cdn]$17 million [Sandhu v. Wellington Court Apartments], [Cdn]$24 million [Miller v Greig] everybody really needs to re-think what limitsthey are carrying,” he warned.
The typical [Cdn]$1 million limit in standard auto coverage likely won’t go very far, given the recent awards, he stressed. “Our personal automobile insurance policies are going to be playing a much greater role in claims involving the use of rental vehicles, and that’s a reality that we need to deal with,” Audet said.
“Insurance limits should be closely reviewed,” he added. “But take a look at the numbers [in court awards] and [Cdn]$1 million is no longer reasonable, [Cdn]$2 million is also not reasonable. [Cdn] $5 million has become a benchmark, but even with that, be careful.”