Is $1 Million in Liability Coverage Enough in Canada?

For a growing number of Canadian households, $1 million is not enough. Canadian courts have awarded $10 million, $12 million, even $18 million in serious injury cases — and when the award exceeds your policy limit, the difference comes out of your assets and future income. Meanwhile, $1 million remains the default limit on most Canadian home and auto policies, mostly because nobody ever suggests changing it.

That's the short answer. Here's how to figure out whether you are one of the households it applies to — and what the fix actually costs.

Where $1 million came from (and why it hasn't kept up)#

The $1 million standard hardened decades ago, when both medical costs and court awards were a fraction of what they are now. Since then, two things changed:

1. Care got expensive. The biggest driver of large Canadian awards isn't "pain and suffering" — Canada caps that around $450,000 even in catastrophic cases, a limit set by the Supreme Court in 1978 and adjusted for inflation since. The real money is cost of future care and loss of future income. Round-the-clock attendant care for a brain or spinal injury runs into millions over a lifetime, and courts award it because someone has to pay for it.
2. Limits didn't move. Insurers kept selling $1 million as the default. Ontario's mandatory auto minimum is still $200,000 — a floor set in a different era — and most drivers buy $1 million on top of it without a second conversation.

The result is a quiet mismatch: awards sized for modern medicine, limits sized for 1990.

What Canadian courts actually award#

These aren't American headlines. These are reported Canadian decisions:

Now hold those numbers against a $1 million policy. In MacNeil, even a $2 million policy would have left the family more than $16 million exposed. These cases are rare — but "rare" is exactly what insurance is for. Nobody budgets for the house fire either.

What actually happens when the award exceeds your limit#

This is the part the industry doesn't explain well, so let's be concrete. Say a court awards $2.5 million against you and your auto policy limit is $1 million:

1. Your insurer pays $1 million — its full limit — and its obligation to fund your defence generally ends once the limit is exhausted.
2. You owe $1.5 million personally. The judgment is against you, not your insurer.
3. The plaintiff's lawyer enforces it. In most provinces they can garnish a portion of your wages, register the judgment against your home (blocking any sale or refinance until it's paid), and seize non-exempt assets — non-registered investments, second vehicles, rental property.
4. It follows you. Judgments accrue interest, can be renewed for decades in most provinces, and — unlike most debts — court-ordered payments arising from negligence aren't reliably erased by bankruptcy.

A judgment you can't pay isn't a one-time event. It's a lien on the next twenty years.

The checklist: when $1 million is genuinely not enough#

You likely need more than $1 million if any of these describe you:

Your renewal just showed $1 million — is that enough on your home policy specifically?#

Most people meet this question at renewal, not while researching lawsuits in the abstract. The package arrives, the premium went up again, and buried in the coverage summary is a liability number — commonly $1 million — that hasn't changed since the policy was first written. The natural question is exactly the one people actually ask: is $1 million enough, or is it worth the extra $22 a month to raise it?

The home-specific version of this question deserves its own answer, separate from the auto side discussed above, because the risks are different — and each one is capped by your home policy's liability section, usually the smallest number on the whole renewal notice relative to what it actually protects.

The renewal-day math is short enough to do while the notice is still in your hand:

• Raising home liability from $1 million to $2 million commonly costs $20–$40 a year — often less than one streaming subscription.
• Adding a $1 million umbrella on top of your whole household — home, auto, and more — typically runs $200–$300 a year, which works out to roughly $17–$25 a month (estimates based on typical Canadian broker pricing, not quotes).

Whether that's worth it depends on the checklist above, not on a universal answer. But the renewal notice is the right moment to actually ask the question, rather than letting the same $1 million figure roll over unexamined for another year because nothing on the page prompts you to look at it.

What more coverage costs (spoiler: less than your streaming bills)#

This is the anticlimax of the whole topic. Raising liability protection is one of the cheapest things in Canadian insurance:

All figures are estimates based on typical Canadian broker pricing — actual premiums depend on your insurer and profile. They are not quotes.

The umbrella option costs more because it does more: one policy sits over all your underlying policies, and it typically responds to some claims your base policies don't fully cover, like personal injury lawsuits over defamation. The catch — and in Canada there's always a catch — is that you can't buy it online. Umbrella coverage here is sold only through brokers, usually as an add-on for clients who ask.

So ask. Or better: walk in knowing your number.