Family Protection Endorsement is a valuable addition to your standard auto insurance policy
Purchasing additional automobile insurance coverage through a Family Protection Endorsement — also known as a SEF 44 — can provide you and your family with peace of mind in the event of a car accident, says Rhino Legal Finance President Larry Herscu.
“There is a range of extra coverage options for relatively small premium increases,” he says. “If you are involved in a collision where the at-fault driver is underinsured or uninsured — or you are involved in a hit and run — you want to know you and family members have adequate coverage.”
In Alberta, basic automobile insurance — which includes accident benefits, third-party liability, and direct compensation for property damage — is required by law. However, coverage for collision and comprehensive is not mandatory.
As the name implies, a family protection endorsement protects you and family members in your vehicle if you are involved in a collision with an uninsured or underinsured driver. The Automobile Insurance Rate Board notes that although you may have the right to collect money from an at-fault driver to reimburse you for your claim, it may not be fully paid if the other party only has basic insurance.
“The SEF 44 pays the difference between your claim settlement amount for injuries arising from the accident and the third-party liability limit of the at-fault driver’s policy up to your own third-party liability limit,” the Board states.
“If you do not have SEF 44 coverage, speak with your insurance broker to determine what $1 or $2 million in Family Protection Coverage would cost. Usually, the difference in premiums is modest, especially when considering the extra protection the coverage provides.”
For example, let’s say you were injured in a motor vehicle accident and suffered damages of $1 million. Suppose the at-fault driver has a basic policy with a limit of $200,000, and you have SEF 44 coverage for $1 million. In that case, the at-fault driver’s insurer will pay the first $200,000, and your Family Protection Coverage will pay the remaining shortfall of $800,000.
Although $1 million may seem like a lot of money, Herscu notes that if you cannot work due to your injuries and have medical and rehabilitation needs, that amount can quickly add up.
“If you have $2 million liability coverage, you will turn to your own insurance company and have more available to you to help with your recovery,” Herscu says.
“The amount of Family Protection Coverage you would have is based on the amount of liability insurance you carry,” he says.
“If you do not have SEF 44 coverage, speak with your insurance broker to determine what $1 or $2 million in Family Protection Coverage would cost. Usually, the difference in premiums is modest, especially when considering the extra protection the coverage provides.”
Herscu says that while having extra coverage should provide you with additional security, there are limitations to the coverage which you should discuss with your insurance broker. Also, drivers should be prepared for the mental and financial toll involved in settling a personal injury claim.
Litigating or negotiating a settlement with your insurance company can take years — even with extra insurance. As you wait for a settlement or court award, bills pile up, and you may have to cover some medical expenses out of pocket. This financial strain is compounded if you are unable to work due to your injuries.
A settlement loan from Rhino can help bridge the financial gap while your personal injury lawyer fights to ensure you obtain a fair settlement.
“Our pre-settlement loans are customized to best meet your needs,” Herscu says. “We speak with your lawyer and review your case to assess your application and our pre-settlement loans are customized to best meet your needs.”
Larry Herscu is President of Rhino Legal Finance, a specialty lender focused on providing credit solutions to the legal sector, including its clients and service providers.