Automobile Insurance in Canada

Question 1

What three types of coverages can automobile insurance policies offer?

Answer 1

1. Third Party Liability
2. Accident Benefits
3. Loss of or damage to the insured automobile.

Question 2

What are the minimum compulsory limits provided by the government insurers?

Answer 2

Manitoba:
TPL - $500,000
A/B - Included
LOU - $750 Deductible

Question 3

What is the purpose of the Facility Association? Does the Facility Association exist in Manitoba? Why or why not?

Answer 3

responsible for the provision and administration of the Underwriting Information Plan (UIP).

The Facility Association does not exist in Manitoba as Manitoba is operating in the compulsory government automobile insurance plans.

Question 4

Contrast ‘‘pure no-fault’’ and ‘‘threshold no-fault’’.

Answer 4

Pure No-Fault : remove the right of legal action against drivers who cause injury or death to others.

Threshold No-Fault : allow legal action against the responsible party only if a certain threshold is exceeded.

Question 5

What are the goals of no-fault insurance?

Answer 5

Less investigation, less subrogation activity, less litigation, speedier settlements for insureds, insureds deal only with their own insurer, cost savings which result in lower premiums, reduced insurance costs and improved settlement of claims.

Question 6

When does Third Party Liability coverage respond ?

Answer 6

When an Insured under the policy is held legally liable to a third party for bodily injury to or death of any person or property damage arising from the ownership, use or operation of the vehicle.

Question 7

Who is Insured under Third Party Liability?

Answer 7

• the Named Insure
• everyone who personally drives the automobile with the consent of the Named Insured; and
• everyone who personally operates a part of the automobile with the consent of the Named Insured.

(Operation of part of the vehicle includes a passenger opening a door and getting out of the vehicle, or a passenger grabbing the steering wheel.)

Question 8

What is the purpose of accident benefits? Must the person applying for accident benefit payments prove he was not responsible for his injuries?

Answer 8

To provide the injured persons with immediate access to benefits under their own policy without regard to fault.

No, he would not have to prove he was not responsible as they would have access to the benefits regardless of fault.

Question 9

In essence, what is the definition of insured under accident benefits coverage?

Answer 9

It varies among the provinces, but generally includes :

1. all occupants of the insured vehicle;
2. pedestrians struck by the insured vehicle (check subsections 1 & 2)
3. the named insured, spouse, and dependent relatives of either, living at the same residence, who are occupants of certain vehicles or if struck by certain vehicles.

Question 10

Name the two provinces in Canada where the owner has no option of whether or not to buy physical damage coverages.

Answer 10

Saskatchewan and Manitoba.

Question 11

What are the four subsections which may be covered under physical damage.

Answer 11

1. All Perils - all risks coverage subject to specific exclusions. Combining and broadening the perils of Collision and Comprehensive making it the broadest coverage available.
2. Collision - Indemnifies the insured for damage to the vehicle caused by collision with another object or by upset.
3. Comprehensive - Indemnifies the insured for damage from any peril other than by collision with another object or by upset.
4. Specified Perils - Indemnifies the insured for damage caused by fire, lightening, theft or attempted theft, windstorm, earthquake, hail, explosion, riot or civil commotion, falling or forced landing of aircraft or of parts thereof, rising water or the stranding, sinking, burning, derailment or collision of any conveyance in or upon which the automobile is being transported on land or water.

Question 12

When does deductible not apply in physical damage coverage (Manitoba exception)?

Answer 12

1. Fire
2. Lightening
3. Theft of the entire automobile

Question 13

What is the role of MPI?

Answer 13

To provide universal coverage at a price lower than private carriers.

Question 14

What is the minimum third party liability coverage provided by Autopac?

Answer 14

The minimum by law in Manitoba is $500,000.

Question 15

What is the Personal Injury Protection Plan(PIPP)? What are the 8 categories it consists of?

Answer 15

The PIPP is a no-fault coverage. Any resident who is injured in an automobile accident receives PIPP, regardless of fault.

1. Income Replacement Indemnity
2. Medical Expenses
3. Rehabilitation Expenses
4. Personal Care Expenses
5. Death Payments and Funeral Expenses
6. Special Expenses
7. Student Indemnity
8. Permanent Impairment Payment

Question 16

What is covered under the Loss of Use?

Answer 16

• Autopac will pay for reasonable expenses only.
• Payment is made for costs incurred to take taxis and public transportation or to rent another vehicle.
• Loss of Use ; Passenger Vehicle limit of caverage is $42/day to a maximum of $1,260.
• This protection starts 72 hours after the theft is reported to Autopac or the police.