Required Motor Vehicle Insurance in Alberta

Section A is called “Public Liability and Property Damage” (PLPD) or Third-Party Liability.

This is the amount that the insurance company will pay to protect you from claims by other motorists if you are at fault. The lowest amount of this type of coverage that a person can legally carry is $200,000. For example, if you are covered for $1,000,000 and are at fault in a motor vehicle accident, which causes injury to another person, your insurance company will pay for the damage to the other vehicle and personal injury expenses. Only up to a maximum of $1,000,000. If the injured party sues you and the Court awards more than $1,000,000, you could be responsible for the rest of the expenses.

Section A also covers injuries to non-paying passengers in a car if the driver was driving negligently. It also covers anyone the driver allows to drive the vehicle. For example, if you lend your car to a friend or family member and they have an accident, your insurance will cover damages to the other party. You should let your insurance company know if you frequently allow someone else to drive your vehicle, such as a child or friend. The insurance company may deny coverage if they are not properly advised.

Section B is often called “Accident Benefits Coverage” or “No-Fault Benefits.”Section B insurance covers injuries to yourself or another person in the event of a motor vehicle accident. For example, if you hit a pedestrian with your vehicle, Section B insurance will cover the pedestrian’s medical expenses.

Medical expenses include ambulance charges, rehabilitation, required medical treatment, death, or funeral expenses. The insurance company will pay a lump sum or payments to any dependent relatives for up to 2 years. It might cover certain income replacements to accident victims who are fully disabled, for up to 2 years.

Section C is often called “Physical Damage Coverage.”

Section C insurance covers the damage to your vehicle, whether you cause a motor vehicle accident or not. This is optional coverage.

Section C insurance is a good idea if a person owns a valuable car (or they still owe money on their car). Your bank or financial institution may insist that you carry Section C insurance if you still owe them a large sum of money for the vehicle.

There are 4 categories of coverage under Section C:

• (1) Collision Coverage is for physical damage, such as a collision with another vehicle, or a roll-over of your vehicle;

• (2) Comprehensive Coverage is for physical damage not related to a collision with another vehicle, such as theft, vandalism, or hail;

• (3) All Perils Coverage combines Collision Coverage and Comprehensive Coverage;

• (4) Specified Peril Coverage is for whatever hazards are specified in the policy. For example, fire and theft, damage caused by lightning, earthquake, hail, explosion, or attempted theft. This is not as extensive as comprehensive but is more than collision.

An insurance company may refuse to pay for any damages to a vehicle if the driver allowed someone to drive the vehicle without a valid driver’s license or with a suspended driver’s license. Also, an insurance company may refuse to pay for any damages to a vehicle if an accident was caused when racing a vehicle or using the vehicle for an unlawful trade.

An insurance company must pay for the damage to other vehicles or any injuries done to other persons. However, the insurance company can sue a driver for any amount they pay on their behalf. If you are being sued by an insurance company, you should consult a lawyer, or use the Lawyer Referral Service, toll-free at 1-800-661-1095.