Family Protection Coverage explained

What is Family Protection Coverage?

Family Protection Coverage is an optional add-on (known as an endorsement) for car insurance policies in Ontario and Alberta. In Ontario, it’s called OPCF 44R, while Albertans know it as SEF 44.

This endorsement applies if you find yourself in a vehicle accident in which the at-fault driver doesn’t have enough liability insurance, doesn’t have insurance at all, or is unidentified (a hit and run).

Family Protection Coverage allows you to use your own policy’s coverage to recover some of the damages that the at-fault driver’s insurance would normally cover. It doesn’t do anything if you are the at-fault driver, however — there are other coverages for that scenario. If the fault is shared between you and the underinsured driver, Family Protection Coverage can still help you if they can’t cover their share of the damages.

This is an optional endorsement; that means you can only use the coverage if you’ve added it to your car insurance policy.

How does Family Protection Coverage work?

If you’re in a vehicle accident, and another driver is entirely at fault for that accident, you usually don’t need to worry about covering any costs. Your insurance covers certain things, like damage to your vehicle and medical costs (within the policy’s limits). The at-fault driver’s insurance would bear any additional costs for which they’re liable.

However, there are many drivers who carry only the minimum coverage required by law — in Ontario and Alberta, that’s $200,000 in liability coverage. Worse, some drivers don’t have any insurance. While driving without insurance is illegal, it does happen. And of course, there are hit and runs — accidents in which the at-fault driver flees the scene without sharing their information. In any of these cases, the victim can be left without recourse if the at-fault driver can’t pay (or isn’t identified).

Following a serious accident, the at-fault driver may be liable for pain and suffering, lost wages, medical and rehabilitation treatment, and so on. Such a judgment can end up in excess of $1 million — more than the typical underinsured driver can afford to pay.

That’s where OPCF 44R and SEF 44 (Family Protection Coverage) come in. When you add Family Protection Coverage to your policy, you’ll be able to use your own third-party liability limit to top up the amount the at-fault driver owes you.

For example:

Say a driver carrying the minimum $200,000 liability limit caused a serious accident, leaving you seriously injured. They were found liable for $1 million in damages.

• If you didn’t have Family Protection Coverage: the other driver’s insurance would pay up to their $200,000 limit, and they’d have to pay the rest themselves. Of course, it’s unlikely that someone who’s driving around underinsured has $800,000 in the bank.
• If you did have Family Protection Coverage: your policy would cover the difference between the judgment and what the other driver’s insurance limit, up to your own third-party liability limit. If you have a $1 million liability limit, your policy would cover the missing $800,000. If you had a $500,000 limit, your policy would pay just $300,000.

Family Protection Coverage, as the name suggests, also extends to the insured’s immediate family members. That includes spouses, dependant relatives (like children), or relatives in the same household.

Family Protection Coverage and third-party liability coverage

The limit of coverage for Family Protection Coverage is generally the same as your policy’s third-party liability limit. For that reason, it makes sense to carry sufficient liability coverage as well.

Most insurance providers recommend drivers carry at least $1 million in third-party liability coverage, if not $2 million.

Do you need Family Protection Coverage?

We’ve covered what Family Protection Coverage does, and the benefits should be clear. It’s strongly recommended that you add the endorsement to your car insurance policy, whether OPCF 44R in Ontario or SEF 44 in Alberta.

In fact, if you buy car insurance from Square One, you’ll have the Family Protection Coverage endorsement included by default.

Perhaps the best reason to get it?

It’s very inexpensive — often just a few dollars per year — and can potentially save you from a catastrophe.

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