Chapter 3 Flashcards
Even though automobiles in Alberta and the Atlantic provinces are all insured using Standard Policy Forms; there are provincial variations in their coverages and exclusions.
True
The Ontario Motorist Protection Plan is a compulsory government automobile insurance plan.
False, it is a no-fault insurance system
When automobiles are rented on a short term basis and a lessee’s own automobile is insured by a S.P.F. No. 1 Owner’s Form in their own name, there is no need to purchase third party liability or Accident Benefits coverages from the lessor.
True
In provinces having government automobile insurance plans, private insurers are permitted to compete for excess coverages only.
True
Third party liability coverage is required by the law in each province to be purchased on all licensed motor vehicles.
True
Automobiles used in a car pool
are deemed to be used for
compensation and a special
endorsement to the S.P.F. No. 1
Owner’s Form, or its equivalent
in the other provinces, is
required.
False
What endorsement will be required to the S.P.F. No.1 Owner’s Form:
To pay charges incurred by the insured to rent a substitute automobile while the insured automobile is in the autobody shop for repair of collision damage?
SEF/OEF 20 Loss of Use Endorsement
What endorsement will be required to the S.P.F. No.1 Owner’s Form: To remove Third Party Liability and Accident Benefits coverage for losses arising out of equipment attached to the automobile?
SEF/OEF 30 Excluding Operation of Attached Machinery Endorsement
You have suggested to your client, M. T. Head, that he purchase additional insurance to cover his non-owned automobile liability exposure. He is opposed to this suggestion because, as he has never rented or leased automobiles in his business, it is his opinion there is no exposure. Identify the major source of Mr. Head’s exposure to a non owned automobile liability claim. What procedure is normally taken in insuring such risks?
S.P.F. No. 6 Standard Non-Owned Automobile Policy The major source of a non-owned automobile liability claim for employers is that arising out of automobiles owned by employees and used in the employer’s business. For some businesses, there may be a greater exposure from:
- hired or leased automobiles;
- automobiles operated under contract for the insured.
Procedure taken in insuring such risks:
Coverage can be provided (i) separately or, as is most common, (ii) by way of endorsement to the Commercial General Liability Policy.
Identify the two different systems used to insure automobiles in Canada
Private Insurers
Compulsory Government Insurance Plans
Identify the three types of SPF that are used to insure vehicles
SPF 1 Owners Form
SPF 4 Standard Garage Automobile Policy
SPF 6 Standard Non-Owned Automobile Policy
Identify three provinces where compulsory government insurance plans exist
BC, Manitoba, Saskatchewan
Identify three types of automobiles that can be insured on an SPF # 1
Private Passenger
Commercial vehicles (truck and delivery automobiles)
Public automobiles (buses and taxicabs)
Identify three ultimate limits that may be required by federal legislation depending on the use of the vehicle
- Vehicle use out of the province $1,000,000 TPL
- Carriers of danger goods $2,000,000 TPL
- Transported to the USA between $750,000 and $5,000,000 TPL
Identify the additional hazard faced by insurers of public vehicles
Increased number of passengers being carried and that such vehicles are used continuously over long periods of time
Identify the three sections of coverage available under the SPF # 1
- Third-party liability
- Accident benefits
- Physical damage
Identify five costs provided under section B - Accident Benefits
- Reimbursement of reasonable medical expenses
- Rehabilitation costs
- Funeral expenses
- Death benefit
- Loss of income
Identify the four options available under Section C - Physical Damage
- All perils
- Collision or upset
- Comprehensive
- Specified perils
The SEF # 44 provides coverage for:
Caused by:
Injury and death
An underinsured motorist
An uninsured motorist
Explain the operation of the SEF # 44
To increase the third-party liability limits available to victims of such accidents to the same limits as purchased under their own policy. When a claim is made payment will be limited to the difference between the liability insurance limits of the insurance policy and that carried by the motorist at fault
Identify the coverage limits and the maximum time provided for Loss of Use under Section C
$25-$30 per day
30 days
Identify the endorsement available for section C (physical damage) if Loss of use of theft is not adequate for the insured’s needs
SEF No. 20 loss of use endorsement
Identify two reasonable expenses covered under the SEF #20
- The rental of a substitute automobile
- Taxicabs or public means of transportation
Identify when coverage starts under SEF #20: Loss of Use Endorsement
- Coverage starts immediately when the damage is such that the automobile cannot be operated under its own power
- When the automobile is stolen coverage begins on the day following the report of the theft to the insurer or to the police
Identify how limits are set under SEF #20: Loss of Use Endorsement
Coverage limits are set at a certain amount per day with a maximum limit per occurrence
Identify four types of vehicles to which SEF #20 is not generally available
- Taxis
- Tractors
- U-drives
- Certain trailers
Identify one use of an automobile which is not deemed to be the renting or leasing of the automobile to another
The use by an employee of his automobile on the business of his employer and for which he is paid
When would a SEF 5c be used
When a rental firm leases a vehicle to an individual or business for 30 days or less
When would a SEF 5 (permission to rent or lease) be used
When a vehicle is leased by an individual or business for longer than 30 days
When would a SEF 5d be used
To indemnify the lessor if the lessee sold the vehicle and disappeared
When would a SEF 8 - Standard Lessor’s Contingent Automobile Policy be used
To indemnify the lessor when the lessee fails to maintain the required insurance as stated in the lease
If an individual lessee does not own their own vehicle and wishes to rent a vehicle for less than 30 days they can purchase insurance coverage from the lessor. However if the lessee does own their vehicle and wishes to rent a vehicle for less than 30 days identify two coverages which are automatically extended from the lessee’s own insurance to the rented vehicle
- Third-party liability
- Accident benefits
Identify the endorsement to be added to the individual lessee’s SPF #1 to provide legal liability for damage to non-owned automobiles
SEF No. 27 legal liability for damage to non-owned automobiles endorsement
Explain the purpose of the SEF No. 76: Additional Insured Endorsemnt
Additional insured endorsement (broad form) - removes the restriction that excludes coverage for pleasure use when automobile is provided for regular or frequent use to a person who is not an active partner or full-time employee of the business.
Explain the purpose of the SEF No. 71 Excluding Owned Automobiles
Excluding owned automobiles- used to delete all policy coverage on any automobile owned, hired or leased by or licensed in the name of the insured. It is often used when such automobiles are already insured under a SPF No. 1 owner form and related endorsement
