6 - Statutory Conditions and Prescribed Conditions Flashcards
What are the Statutory Conditions?
Definitions, rules & regulations that govern auto insurance contracts in the common law provinces.
What functions do the Statutory Conditions perform?
Their intent is to protect the rights of the insured/insurer by stating what is expected of each in certain circumstances and specifying ways of handling certain situations that could arise and affect coverage under contract.
What are the General Conditions?
Its Quebec’s equivalent of Statutory Conditions
When/where General Conditions apply
General Conditions apply to auto insurance contracts in Quebec. They vary slightly from Stat Cond in how they are applied and how they affect coverage under policy.
Can the Statutory Conditions be changed in any way by an insurer?
No, Stat Cond may not be changed any way by the insurer.
Do Statutory Conditions apply to auto insurance in BC?
No, Prescribed Conditions apply in BC. Basic Autoplan is governed by statute. Optional coverages are subject to Prescribed Conditions.
What are the Prescribed Conditions and when do they apply?
They are definitions required by the legislation to be printed in the ICBC Autoplan Optional Policy, contained in the Insurance Vehicle Regulation and apply for optional coverage
What is the “Application and Interpretation” condition?
1 Prescribed Condition: Application and Interpretation: Defines words Insured, territory and vehicle rate class. States that Prescribed Conditions apply only to coverage provided by the contract and do not extend coverage to an amount that exceeds the limit provided by the certificate or policy. (There is no comparable Statutory Conditions
Compare and contrast the Prescribed Condition “Changes during term of contract” with the Statutory Condition “Material Change in Risk”
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PC states that Insured named in contract must disclose certain changes of territory and vehicle use to insurer within 10 days of address change or acquiring substitute vehicle. Insured must notify insurer before changing the use of the vehicle under a diff rate class or using a vehicle in diff territory. Report of change of location when not in use within 30 days. Statutory Conditions - Material Change in Risk Insured requird to notify insurer of changes within their knowledge that are material to the contract. There is no equivalent PC. Insured is required to notify insurer about changes in insurable interest but not about changes of title by succession.
What uses of the vehicle are prohibited under the Prescribed Condition “Prohibited Use”
3 Prohibited Use - insured is prohibited from operating vehicle and insurers are not liable when insured breaches this condition
- if not authorized and qualified by law to operate vehicle
- for an illicit or prohibited trade or transportation
- to escape or avoid arrest or other similar police action
- in a race or speed test
Briefly explain distinction between being authorized and being qualified by law to drive
Person must have a valid DL to be authorized, while person does not need to have a valid DL to be considered qualified by law to drive. If a person involved in an accident is not authorized to drive, ICBC can ask the person to take a driving test ASAP. If person successfully completes the test, the breach is waived.
Two Statutory Conditions related to prohibited use of the vehicle:
Prohibited Use by the Insured - Insured must be either authorized by law or qualified to drive. This is different from requirements for basic Autoplan, for optional coverages from ICBC/priv insurers when insured must be both authorized/qualified by law to drive. Other provisions are similar to BC in that insured cannot operate veh for illicit/prohibited trade
What are the requirements under PC if the insured is involved in an accident where there is loss or damage to persons or property
The insured must:
- promptly give the insurer written notice, with all avail particulars of accident involving death, injury, damage or loss; any claim made in respect of the acident and any other insurance held by the insured providing coverage for the accident.
- insurer must be kept informed of what is happening with respect to third parties
- insurer agrees to defend the insured
- insured will cooperate with insurer in the investigation
- exect at the insurer’s own cost, assume no liability and settle no claim
- allow the insurer to inspect an insured vehicle or its equipment at any reasonable time
What addtl provisions does the SC “Requirements where Loss or Damage to Persons or Property” contain
This SC contains provisions very similar to those in the PC. Along with:
- insured can be required to submit a statutory declaration at the insurers request, verifying that the claim arose out o he use or operation of auto
- and that the person operating or responsible for the operation of the auto at the time of the accident is a person insured the contract
- insured is prohibited from interfering in any negotiating or settlements in any legal proceeding.
What must an insured do if he insureds vehicle suffers loss or damage that is covered under the insurance contract
- promptly notify the insurer of he loss/damage
- file a written statement with the insurer setting out all the available info
- file proof of loss within 90 days after the loss or damage occurs
- after the loss insured must protect property at the expenses of the insurer
- insured must not remove any physical evidence of the loss or damage to the vehicle o make any repairs
What amount will the insurer pay if vehicle suffers loss or damage that is covered under the insurance contract
- the insurer will pay the least of the following: The cost or repairing/replacing the vehicle; the declared value of the vehicle, ACV of the vehicle.
