What happens if a judgment against me is higher than my insurance policy limit in Ontario?

Your insurer generally only pays up to your policy's limit, and you are personally responsible for any amount of the judgment above that - insurance doesn't automatically cover a shortfall just because you were following the insurer's defence the whole way through. This is one reason policy limits matter enormously in higher-value claims, and why settlement decisions made along the way can have real personal consequences for you as the insured.

One important exception can arise if your insurer had a genuine opportunity to settle the claim within your policy limits, on reasonable terms, and unreasonably refused or failed to do so, resulting in a judgment that exceeds those limits. In that situation, you may have a claim against the insurer for the excess exposure, on the theory that the insurer's unreasonable handling of settlement, not just the underlying claim, caused your personal loss above the policy limit. Whether an insurer's refusal to settle was unreasonable is judged against what a prudent insurer would have done with the information available at the time, and is a fact-heavy question worth having reviewed if you're facing a limits-exceeding judgment.