Chapter 3

Question 1

What is classified as territory?

Answer 1

the policy applies only while the automobile is being operated, used, stored or parked within Canada or the USA or upon a vessel travelling between ports of these countries.

Question 2

Occupant Defined?

Answer 2

This provision defines who is considered an occupant of the insured vehicle. it refers to the driver, a passenger being carried in or on the automobile, a person getting into or on the vehicle, and a person getting out of or off the automobile.

Question 3

Who is a consent of owner?

Answer 3

Generally there is no coverage of cars being used without their owners consent. example: there is no coverage for passengers in stolen automobile. however in some provinces with government insurance, these occupants will be covered by the government provided accident benefits

Question 4

Garage staff excluded?

Answer 4

there is no coverage for people, referred to as garage staff, who are using, operating, riding as a passenger in, or working on cars while engaged in certain type of car related businesses. Garage staff should be covered under a garage policy when they are working on customers vehicle

Question 5

Automobile Defined?

Answer 5

this provision is important because automobile insurance policies cover certain other automobile in addition to providing coverage on the specifically described automobile.

Question 6

Newly Acquired Automobile?

Answer 6

When an Insured purchases an additional or a replacement vehicle, coverage is automatically extended to the newly acquired automobile for a specified number of days.

Question 7

What is temporary Automobile?

Answer 7

Coverage under Third party liability and accident benefits (only third party liability in Quebec|) is extended to temporary substitution as they are defined by this provision.note that coverage is not provided for physical damage to a temporary substitution automobile except for the limited coverage provided under the additional agreement of the loss or damage to the insured automobile section of the policy.

Question 8

Other Automobiles ?

Answer 8

this provision coverage extends coverage under third party liability to private passenger automobiles owned by another person and loaned to the insured and his spouse if residing in the same dwelling place

Question 9

Trailer ?

Answer 9

In most jurisdictions, this provision states that Third Party liability coverage and accident benefits will apply to any trailer used in connection with the automobile.

Question 10

An automobile with a trailer attached is considered to be one vehicle under Third Party liability and accident benefits coverage (except in British Columbia and Saskatchewan). this means that if there is an accident, the total limit of coverage applies even though damage may be caused to Third party by both the car and the trailer.

Answer 10

An automobile with a trailer attached is considered to be one vehicle under Third Party liability and accident benefits coverage (except in British Columbia and Saskatchewan). this means that if there is an accident, the total limit of coverage applies even though damage may be caused to Third party by both the car and the trailer.

Question 11

What is excluded Uses?

Answer 11

1. The automobile is rented or lease to another(when employees use their own automobile on the business of their employer and are paid, it is not considered renting or leasing the automobile to another)
2. The automobile is used to carry explosive or radioactive material for research, education, development, or industrial purposes.
3. The automobile is used as a taxicab, public omnibus, livery, jitney or sightseeing conveyance or for carrying passengers for compensation or hire.

Question 12

In British Columbia, Saskatchewan, Monitobia, basic compulsory coverage is provided through the government insurer. the government insurer is required to provide basic coverage for all vehicle, there are no excluded uses. to have coverage, the vehicle must be registered properly and proper use declared.

Answer 12

In British Columbia, Saskatchewan, Monitobia, basic compulsory coverage is provided through the government insurer. the government insurer is required to provide basic coverage for all vehicle, there are no excluded uses. to have coverage, the vehicle must be registered properly and proper use declared.

Question 13

What is Material change in risk?

Answer 13

this condition requires the insured to notify the insurer of any change in the risk within the insureds knowledge that is material to the contract. A material change is one that would affect whether the insurer would stay on the risk or whether it would charge a higher premium because the exposure has increased and includes the following:

1. sale assignment, or other change in the insureds insurable interest in the described automobile - except by succession, death, or bankruptcy.
2. Any change in mortgages, liens, or encumbrances on the automobile
3. Other insurance being placed on the automobile.

Question 14

Prohibited use by the Insured and other?

Answer 14

1. they are not authorized to drive( have no drivers licence or have a suspended or expired licence)
2. They are not qualified to drive (do not know how to drive or cannot pass a driving test)
3. They are below the minimum Licensing age
4. They are engaging in any illicit or prohibited trade or transportation
5. They are in any race or speed test.
   under the Third party liability coverage the insurer would absolutely be liable(if the inst=red was found negligent) for bodily injury to third party up yo the minimum limits, but the insurer would, on making any payment, have the right to be reimbursed by the insured.

Question 15

what are the Requirement where there is loss or damage to the automobile?

Answer 15

1. When there has been a loss, the insured is required to give prompt notice of loss, protect the automobile from further loss and submit a proof of loss within 90 days.
2. Any further loss is excluded if it caused by the insureds failure to protect the automobile.
3. There are to be no repairs made( except the repairs necessary to prevent further loss) nor any removal of evidence of damage unless the insurer gives its written consent, or there has been a reasonable time for the insurer to examine the automobile.
4. The insurer may require the insured to submit to an examination under oath and to present all documents pertaining to the loss.
5. The insurers maximum limit of liability is the least of the actual cash value of the automobile or the cost to repair or replace with like kind and quality.
6. The insurer may choose to repair, rebuilt or replace the damage automobile.

Question 16

What is the Time and manner of payment of insurance money?

Answer 16

• 60 days after receipt of proof of loss or
• 15 days after the award by the appraisers, where an appraisal has been made.
• the requirement outlined under the statuary condition requirement where loss or damage to person or property and requirement where loss or damage to automobile have been met.
• the amount of loss has been determined; a court award has been handed down; or a written agreement, such as an out of court settlement, has been made with the insurers written consent.

Question 17

Who may give notice and proof of claim?

Answer 17

1. The agent of the insured.
2. A person to whom any part of the insurance money is payable. in this case, the inability of the insured to give notice or proof must be explained or it must be shown that the insured refused to give notice or proof of loss

Question 18

How can a insured or an insurer Termination a policy?

Answer 18

The insurer may terminate the policy by doing either of the following:
1. Giving 15 days written notice by registered mail. this 15 days notice period begins the day following receipt of the letter at the post office to which the registration letter is addressed.
2. Giving 5 days written notice if personally delivered. a receipt as proof of delivery should be obtained
The insured may terminate the contract at any time by making a request.

Question 19

In Quebec, the insurer may cancel the the policy within 60 days of its coming into force by ordinary notice to the insured, and it will take effect 15 days after notice is received. After 60 days, the insurer may cancel only for nonpayment of premium or in the case of an aggravation of the risk that is likely to materially influence a reasonable insurer in the decision to continue to insure.
The insurer must give notice in writing and cancellation is effective 30 days after receipt. return of the premium is on a pro rata basis.

these conditions provide for a notice period of 30 days for notice sent by registered mail, or 10 days if hand delivered, among other things.

Answer 19

In Quebec, the insurer may cancel the the policy within 60 days of its coming into force by ordinary notice to the insured, and it will take effect 15 days after notice is received. After 60 days, the insurer may cancel only for nonpayment of premium or in the case of an aggravation of the risk that is likely to materially influence a reasonable insurer in the decision to continue to insure.
The insurer must give notice in writing and cancellation is effective 30 days after receipt. return of the premium is on a pro rata basis.

these conditions provide for a notice period of 30 days for notice sent by registered mail, or 10 days if hand delivered, among other things.

Question 20

Notice?

Answer 20

1. Written notice to the insurer may be delivered or sent by registered mail to the dead office or chief agent of the insurer in the province.
2. Written notice to the insurer may be personally delivered or sent by registered mail addressed to the insured at the last known postal address as notified to the insurer.

Question 21

Automobile storage?

Answer 21

The suspension of coverage endorsement suspends Third party liability insurance and collision coverage under the owner policy.

There are certain coverage that remain in force while a vehicle is been stored:

1. Accident benefits coverage, which provides insurance protection when the insured is a passenger in someone else car or is a pedestrian and is involved in an automobile accident.
2. Fire, theft and vandalism damage insurance
3. Third party liability insurance while driving non-owned automobiles as mentioned above third party liability insurance for the use or operation of the owned vehicle is suspended
4. In Ontario, Quebec, and new Brunswick, direct compensation property damage coverage

Question 22

What are the endorsement applicable Automobile Value Changes ?

Answer 22

Endorsement applicable to automobile values are required in three common situations:

1. to provide additional limits for the increased value of classic or antique automobile
2. To limit the amount of coverage on appraised vehicle to less than the appraisal amount
3. to provide protection for the difference between the cost of a new vehicle and its depreciated value.

Question 23

Agreed value of automobile?

Answer 23

The agreed of automobile endorsement allows insureds to obtain replacement cost coverage on their automobiles. the insured automobiles and their values are shown on the endorsement. A standard owners policy will reimburse the insured for the actual cash value, the fair market value of a vehicle taking into account factors such as depreciation.

Question 24

The limit of Amount paid for loss or damage?

Answer 24

the limit of amount paid for loss or damage endorsement makes it possible to insure a vehicle for less than its appraised value. This endorsement is available in most province and territories, but in Manitoba, it only applies to commercial vehicle
Either the insured or the insurer can elect to add this endorsement to the policy.

Question 25

What is removing depreciation deduction?

Answer 25

Under the terms of this endorsement, the insurer agrees to repair the vehicle as if it were a brand new car. In other words depreciation is not applied when the car needs repairs. Claims are settled using the replacement value of the car

Question 26

Underinsured Motorist protection?

Answer 26

This endorsement is also known as family protection coverage or family security coverage. it provides protection to the insured when the third party at fault motorist has not purchased insurance adequate to cover the claim

Question 27

coverage requested?

Answer 27

1. third party insurance will pay all sums for which the insured is legally liable for bodily injury and and property damages to third parties resulting from a motor vehicle accident
2. accident benefits includes medical payments, death and total disability benefits without any regard to fault. it also includes uninsured motorist coverage in some provinces; in others this is a separate section.
3. Direct compensation- property damage in provinces where applicable, compensates insureds through their own insurers for property damages resulting from an automobile collision caused by another party.
4. own damage coverage pays for loss of or damage to the insured automobile.Four specific choices are usually available
5. uninsured motorist coverage is an optional bodily injury and property damage coverage that applies in an accident involving a third party who does not carry insurance

it covers the administrative cost of issuing and cancelling the policy or endorsement. the application summarizes what is covered and has space for the agent, broker, or insurer to state the premium charge for each coverage.

Question 28

what is vehicle use?

Answer 28

use of the vehicle is an important factor in determining the premium

Question 29

explain what is meant by identification of application?

Answer 29

the first item identifies the applicant. it is necessary for obtaining a drivers abstract of the applications driving records and can serve as a possible means of checking on the use of the vehicle.
for these requirement is to help determine the use of the vehicle and the territory that the rate will be based on . Rate is understood to be the price for covering an exposure unit of insurance (often $100 units for property or $1000 units for liability insurance) for a period of one year

Question 30

what are the particulars of described automobile?

Answer 30

it is necessary to obtain particulars of the described automobile: the year, make, models and serial number (also called vehicle identification number or VIN). THIS INFORMATION IS NECESSARY FOR RATING PURPOSES AND IDENTIFICATION IN THE EVENT OF A CLAIM.

This information establishes the insurable interest of the application in the automobile and it records the interest of lien holders so that in the event of a claim their interests are protected.

Question 31

coverage requested?

Answer 31

1. Third party liability insurance will pay all sums for which the insured is legally liable for bodily injury and property damage to third parties resulting from a motor vehicle accident.
2. Accident benefits include medical payment, death and total disability benefits without any regards to fault. it also includes uninsured motorist coverage in some province; in others this is separate section
3. Direct compensation- property damage in provinces when applicable, compensates insureds through their own insurers for property damage resulting from an automobile collision caused by another party.
4. Own damage coverage pays for loss of or damage to the insured automobile. four specific choice are usually available
5. Uninsured motorist coverage is an optional bodily injury and property damage coverage that applies in an accident involving a third party who does not carry insurance.

it covers the administration costs of issuing and cancelling the policy or endorsement. the application summarizes what is covered and has space for the agent, broker, or insurer to state the premium charge for each coverage.

Question 32

What are the uses of vehicle?

Answer 32

use of vehicle is an important factor in determining the premium

Question 33

Drivers?

Answer 33

the application ask the name of all drivers, the number of year each has been licensed, any driver training course and the approximate percentage of use each vehicle.

Question 34

Impairments?

Answer 34

Impairments include the loss of or loss of use of various body parts or functions physical or mental abilities that might affect the safe operation of an automobile.

Not a question of disabilities per se; it is question of determining mental or physical disabilities that might affect the safe operation of an automobile.

Question 35

Registered owner and actual owner

Answer 35

A lienholder is an entity that holds a registered claim, or lien, against the automobile, which is often the case when insureds borrow funds to finance purchasing the automobile.

Question 36

What are Penalty Clause?

Answer 36

The importance of giving correct and honest information on an automobile application is emphasized by the prominent penalty clause or warning printed on every application. it is a direct quote from the provincial and territorial insurance acts and underline the importance of utmost good faith

if insureds contravene a term of the contract, then they forfeit the right to recover indemnity. such a situation could when the insured uses the vehicle for a purpose that is prohibited either by the statuary condition or by the general provision, such as an illicit or prohibited trade or transportation, or a race or speed test.

Question 37

Statement regarding use of personal information?

Answer 37

Applications for automobile insurance in all jurisdictions except Quebec contain the following or a similar statement: Reports containing personal, credit, factual, investigative or driver record information may be sought in connection with this application for insurance or renewal, extension or vacation thereof.

Question 38

What are considered to be Rating?

Answer 38

Where insurance is purchase from private insurers, the component coverage under a policy are rated, a premium is calculated and it becomes payable when the policy is issued. in provinces where government insurance exists, no policies are issued. a premium is paid when the operators licence is purchased or when a vehicle registered is issued. In Quebec, certain coverage must be purchase must be purchase from the government plan and others from private industry.

• Age , age, and martial status
• Driving Experience
• Other regular drivers
• Driving records
• Territory and distance driven annually
• Vehicle usage
• Vehicle Description
• Coverage

Question 39

Motor vehicle liability insurance cards

Answer 39

Motor vehicle liability cards are designed to serve as proof of automobile Third party liability insurance. they were formerly commonly called pink cards because they were legally mandated to be printed on pink paper.

Question 40

What are the variety of reason for the delay in switching to electronic cards in motor vehicle liability insurance card in Canada?

Answer 40

1. Privacy concerns, including those relating to handing police officers a mobile phone to view the electronic card if proof of insurance is required
2. Government insurers who have combined the motor vehicle liability card with the provincial motor vehicle registration card.
3. Fraud concerns, although fraud is a concern with paper cards as well .

Question 41

What information should be present on the motor vehicle liability insurance card?

Answer 41

1. Name and address of insured
2. Name and address of insurer
3. Name and address of agent/broker
4. Description of insured vehicle
5. Policy number
6. Effective date term of the policy

Question 42

Name the 3 types of cards that are use?

Answer 42

1. Temporary cards :- theses are used by agents or brokers in binding risks and are valid for 30 days which should give sufficient time to issue a policy and a permanent card.
2. Permanent cards are used by the insurers and recording agent. they are effective until the expiry date shown on the card, unless the policy is cancelled. it is illegal to use a card when the supporting policy has been cancelled.
3. Endorsement cards:- these cards are used when an endorsement is required to record a change of insured vehicle or address.