When you register your vehicle in Saskatchewan, you receive basic government (“SGI”) insurance with your registration. This includes a $700 deductible for collision and comprehensive coverage and $200,000 third party liability. This is the mandatory minimum insurance required to operate your vehicle in Saskatchewan.
The common misunderstanding is that this is “all the coverage you need.” We wanted to discuss the repercussions of insuring at these bare minimum amounts and what an extension policy adds to your coverage.
So what are the implications of insuring at the “bare minimum?“
Your liability is limited to $200,000.
If you are responsible for property damage deriving from the use of your vehicle. Your limit of coverage is $200,000. This will cover the majority of property insurance claims (as most vehicles are worth less than 200k). However, if you run into an expensive building, luxury car or somehow derail a train (we’ve seen it happen), those damages can exceed the $200,000 limit and you will be financially responsible for the additional losses.
You are also responsible for any additional economical losses and you can be vulnerable to lawsuits from motorists who have Tort Injury Coverage.
What are “Economical Losses” and “Tort Injury Coverage?“
Economic Losses
If you are in an “at fault” accident and you hit someone who has a high level of income (Doctor, Lawyer, etc.), they can sue for economic losses over and above the allotted SGI amount. For example: SGI allows $102,673 of annual income in economical losses (lost wages) for automobile accidents. If the injured third party makes more money than that, they can sue for the additional lost wages. So for example, you hit a doctor with your vehicle and his annual income is $300,000 per year. Due to his injuries, he can no longer use his hands, and sues you for the remaining income he is unable to earn (20 years left in his career). You may be on the hook for the 20 years of lost wages:
Calculation: ($300,000 – 102,673) x 20 years = $3,946,540 – $200,000 (basic liability coverage) = $3,746,540. <- You can be financially responsible for this!
Tort Injury Coverage
When you obtain a driver’s licence and registration with SGI, you will be given options of injury coverage to choose from. (SGI injury guide) 98% of drivers will stick with “no fault” insurance as this is comprehensive injury coverage, despite how the accident occurred. However, people have the option to opt out and accept Tort Injury Coverage. Tort coverage is much more basic, but it allows opportunity for the customer to sue for pain and suffering.
You have a higher deductible amount
The standard deductible for a light vehicle (car, truck, SUV) is $700. Trailers are $500. If those limits are too high for you and you would like to have a lesser deductible, you can buy that down on your extension auto policy (auto pak). If you select a reduced deductible policy, you will also receive a wildlife deductible waiver, fire deductible waiver and theft, “stolen and not returned,” deductible waiver.
What those waivers mean, is the insurance company will not charge you a deductible to fix the damage to your vehicle if the loss is caused by wildlife, theft or a fire loss.
Please note, that when the vehicle is not registered, your basic coverage no longer applies. So if you park your vehicle or put it in storage for a couple weeks while you’re on vacation, and you cancel your registration, the insurance coverage is cancelled along with it and you are now self-insuring.
Okay, I see there are some risks, how do I protect myself from these issues?
- Third Party Liability – this coverage is reasonably priced and will protect you from those huge exposures to liability losses. $1 – 2,000,000 liability coverage starts at less than $5/month.
- Family Security – matches the liability limit (up to 2 million) and protects you, your family and occupants from injury damages caused by an uninsured or underinsured driver.
- Reduced Deductible / Waiver – As noted above, you can select a reduced your deductible to fit your budget. $100, $200, $350, $500 are possible options.
- Road Hazard Glass – With the sensors added into windshields you may want to protect the costs of replacing a cracked windshield. Other glass (sunroofs) are also covered by this endorsement from stones or other road hazards.
- Loss of use – If you have an insured loss with your vehicle, this coverage will provide $$$ for a rental vehicle while your vehicle is repaired.
- Replacement Cost Coverage – Brand new vehicles are eligible for this added coverage (within 120 days of delivery). Protect your investment by insuring your vehicle to replacement value for up to 5 years. Especially important when your vehicle is financed.
- Non-owned Auto Coverage – Your policy automatically extends to vehicles you do not own, located in Canada and USA (ie. Rental Vehicles, Borrowed Vehicles).
- Vermin Coverage – Vehicles aren’t typically covered for vermin coverage with basic insurance. However, your extension auto may be able to cover vermin losses (mice in trailers for example).
- In Storage Coverage – If you cancel your registration on your vehicle, your Auto Pak will automatically cover your vehicle while it is in storage. You cannot drive the vehicle without registration, but if you park it in your garage for a couple months, the policy coverage will continue to extend to that vehicle while in storage.
Is this policy going to cost me a lot of money?
This coverage is relatively inexpensive compared to your registration. Once your vehicle is registered, you can get started on your extension auto policy quote here. The rates will be based on your driving history and claims experience. Typically a policy can start at $60 per year for liability and then the endorsements you add will increase from there.
If you have any questions regarding extension auto insurance in Saskatchewan, please reach out to info@melloinsurance.ca.
