C14 British Columbia Glossary

Question 1

Absolute Liability

Answer 1

The liability of a wrongdoer’s automobile insurance company to pay someone harmed by the wrongdoer, even if the wrongdoer has violated the terms of the insurance policy, for example, by driving with an expired licence. This is subject to a limit, usually $200,000, and the requirement that the wrongdoer in violation of the contract must reimburse the insurer.

Question 2

Actual cash value

Answer 2

The Insurance (Vehicle) Regulation states that:

Actual cash value means the average market price a purchaser would have paid for an insured vehicle or other insured property immediately before the loss or damage occurred to the vehicle or other property.

Question 3

Car year

Answer 3

A car year is a measurement of an insurer’s exposure. It means an automobile insured for a period of twelve months. For example, a single policy providing coverage on three automobiles for a six-month term would be 1.5 car years.

Question 4

Claim Rated Scale

Answer 4

The Claim Rated Scale shows how claims against insureds’ records affect the premium they are charged.

Question 5

Declared value

Answer 5

The Insurance (Vehicle) Regulation states that:

Declared value means the value declared by the owner of a vehicle to the corporation in a declaration of value.

Question 6

Deductible

Answer 6

A deductible is an amount the insured must pay on each loss to which the deductible applies. The insurance company pays the remainder of each covered loss up to the policy limits.

Question 7

General average

Answer 7

If a ship transporting cargo encounters difficulty and some cargo must be sacrificed to protect the ship from danger, the ship owner and all cargo owners and owners of the freight revenue share pro rata in the loss. The loss is referred to as the general average.

Question 8

Implement of husbandry

Answer 8

An implement of husbandry is a vehicle designed and adapted exclusively for use in agricultural operations.

Question 9

Liable

Answer 9

Liable means legally responsible.

Question 10

Lieutenant Governor in Council

Answer 10

Lieutenant Governor in Council appears in many government documents, such as acts of legislation. It refers to the Lieutenant Governor, who is the Queen’s representative, acting on and with the advice of the Executive Council (or Cabinet). When the Cabinet makes a decision and it has been approved by the Lieutenant Governor, it is said the decision was made by the Lieutenant Governor in Council.

Question 11

Negligence

Answer 11

Negligence is the omission to do something which a reasonable person, guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable person would not do.

Question 12

Onus of proof

Answer 12

Onus of proof means the burden or responsibility of proof, and is sometimes referred to by its Latin term, onus probandi.

Question 13

Precedent

Answer 13

A precedent is a legally enforceable decision made by a judge that will guide judges in making subsequent decisions in similar cases.

Question 14

Residual markets

Answer 14

Special programs to ensure insurance availability for risks that, from an underwriting standpoint, are less desirable and more hazardous are sometimes referred to as residual markets.

Question 15

Retention

Answer 15

In terms of reinsurance, retention is the amount of risk that the insurer keeps for its own account. The rest of the risk is passed on to the reinsurer.

Question 16

Subrogation

Answer 16

Subrogation is the transfer of legal rights [to an insurer] of someone whose debts or expenses have been paid to pursue recovery from an at fault party.

Question 17

The Law of Large Numbers

Answer 17

The Law of Large Numbers holds that the larger the sample of past observations used to predict whether an event will occur in the future, the more accurate the prediction will be.

Question 18

Threshold

Answer 18

In automobile insurance, a threshold is the degree of injury a claimant must establish before being allowed to commence a legal action against the negligent party. It may be a dollar amount or a verbal description of the nature and severity of the injuries that must be suffered to establish this right of action.

Question 19

Tort

Answer 19

A tort is a civil wrong or harm committed against another. The injured party has a right of action against the wrongdoer.

Question 20

Total loss

Answer 20

Total loss means the condition of the vehicle that exists when it is stolen and not recovered, or is so severely or extensively damaged that it is not feasible to repair it.

Question 21

Underinsured motorist

Answer 21

Underinsured motorist means a vehicle owner or operator who is legally liable for the injury or death of an insured but is unable, when the injury or death occurs, to pay the full amount of damages recoverable by the insured or the insured’s personal representative in respect of the injury or death.

Question 22

Uninsured motor vehicle

Answer 22

Uninsured motorist means a person who uses or operates a motor vehicle on a highway in British Columbia when he or she is not insured under third party liability insurance coverage that provides indemnity in a prescribed amount [at least $100,000] against liability imposed by law arising from bodily injury to or the death of a person, or loss of or damage to property, caused by or arising out of the use or operation of a motor vehicle. This includes the owner of a motor vehicle that is used or operated on a highway in British Columbia when the owner is not so insured.

Question 23

Uninsured motorist

Answer 23

Uninsured motorist means a person who uses or operates a motor vehicle on a highway in British Columbia when he or she is not insured under third party liability insurance coverage that provides indemnity in a prescribed amount [at least $100,000] against liability imposed by law arising from bodily injury to or the death of a person, or loss of or damage to property, caused by or arising out of the use or operation of a motor vehicle. This includes the owner of a motor vehicle that is used or operated on a highway in British Columbia when the owner is not so insured.

Question 24

Vehicle in storage

Answer 24

A vehicle in storage means a vehicle not currently licensed that is being stored on the insured’s private property or on private property located anywhere within Canada or the USA, and that will not be driven on a highway, private road, or private property, or parked on any highway during the term of the policy.

Question 25

Vehicle on consignment

Answer 25

A vehicle on consignment means a vehicle not currently licensed that has been placed by the registered owner in the care, custody, or control of a garage service operator, but not registered in the name of such operator, for the sole purpose of the sale of the vehicle.

Question 26

Verbal threshold

Answer 26

Verbal threshold: the words or language describing the nature and type of injury that must be suffered in order to be able to commence a legal action against the responsible party.

Question 27

Constitution

Answer 27

By decree, giving authority to federal government

Question 28

Insurance Companies Act

Answer 28

Gives ‘insurance’ authority to the government of BC

Question 29

Insurance Act

Answer 29

Regulates private insurers, brokers, agents and their contracts

Question 30

Insurance Corporation Act

Answer 30

Sets up the Crown Corporation, ICBC and authorizes the corporation to do insurance business

Question 31

Insurance (Vehicle) Act

Answer 31

Explains how the Insurance Corporation of British Columbia (ICBC) should operate and provide coverages; accompanying legislation provides details

Question 32

Motor Vehicle Act

Answer 32

Vehicle registration and licensing of drivers and includes traffic controls (rules of the road)

Question 33

Limitation Act

Answer 33

Time limits to start lawsuits (if a claim hasn’t settled)

Question 34

Interpretation Act

Answer 34

Commonly relied upon when opposing sides differ on a specific meaning of a word or term