Chapter 4 - Application for Auto Insurance Flashcards
Explain the approval of forms.
- forms that have to be approved by FSCO:
1) app for ins
2) policy, endorsement, renewal
3) claims forms
4) continuation certificate
STANDARD POLICIES containing:
- insuring agreements
- provisions
- used by insurers in general
APPLICATION FORM
- insurer can only used prescribed app form
What does SECTION 232 (1) include?
Copy of Application in Policy
- a copy of the written application, signed by the insured/insureds agent becomes part of the policy
- if no signed app is made, a copy of the purported app still forms part of the policy when submitted to the insurer
What happens when a policy is issued with no signed app?
- insurance act does not require insurers to obtain a signed app before an auto policy is issued
- however, the insurer must send a form of app to the insured so that it can be signed and returned
What does SECTION 233 (1) include?
Misrepresentation or Violation of Conditions Renders Claim Invalid
a) an applicant for a contract
i) gives false particulars of described auto to be insured to the prejudice of the insurer
ii) knowingly misrepresents or fails to disclose in the app any fact required to be stated therein
b) the insured contravenes a term of contract or commits fraud
c) insured willfully makes a false statement in respect of a claim under the contract
SECTION 223 (2) - subsection (1) - does not invalidate such statutory AB as are set out in the Statutory Accident Benefits Schedule
When can you use an application as defence?
Use of Application as Defence (Section 233 [3])
- that an insurer cannot use as a defence of a claim any info found in a purported copy of an app
- when there is no signed written app the insurer must find other means to:
i) establish that there is in fact a misrep
ii) prove that the applicant actually made the misrep at the time he/she applied for insurance
Explain what “Insured entitled to Copy” entails.
SECTION 232 (3)
- the insurer shall deliver/mail to insured named in policy or the agent for delivery/mailing, the policy a true copy and every endorsement or other amendment to the contract
Explain the “form of policy” provision.
SECTION 232 (4)
- when a policy is issued and it differs in any way from the written app, the following provisions apply:
i) the insurer must point out to the insured, in writing, in what ways the policy differs from the app
ii) if the insured does not object to the changes by advising the insurer in writing within 7 days, the policy is deemed to cover as it is written
Explain the “certificate of policy” provision.
SECTION 232 (5)
- if an insurer adopts a standard policy approved under subsection 227 (5), it may instead of issuing the policy, issue a certificate in a form approved by the superintendent
- if an approved certificate is used, it has the same force & effect as a policy
ex) OAP 1 (owners form)
Explain “copy of policy” provision.
Copy of Policy
- at the request of an insured to whom a certificate has been issued under subsection 5, the insurer shall provide a copy of the standard policy approved by the super.
What does the Insurance Act state about applications?
Proof of terms of policy
- where an insurer issues a certificate under subsection 5, proof of the terms of the policy may be given by production of a copy of the Ontario gazette containing the form of the standard policy approved by the super
Endorsement on forms
- upon every app form/policy, there shall be printed or stamped in conspicuous type a copy of subsection 233 (1)
What does SECTION 233 (1) contain?
Misrepresentation or violation of conditions renders claim invalid
a) if an applicant for a contract
i) gives false particulars of the described auto to be insured to the prejudice of the insurer
ii) knowingly misrepresents or fails to disclose in the app and fact required to be stated therein
b) the insured contravenes a term of the contract or commits fraud
c) insured willfully makes a false statement in respect to a claim under contract
- a claim by the insured is invalid & the right of the insured to recover indemnity is forfeited
THIS WARNING MUST BE STAMPED OR PRINTED IN CONSPICIOUS TYPE ON EVERY APP & POLICY
What information is required for an OAF 1?
1) applicants name & postal code/ lessor is applicable
- identifies insured as registered owner of auto
- provides info used for rating
- helpful in obtaining abstract of driver’s driving record
2) policy period
- time, day, month, year of policy inception
- expires at 12:01am local time, at postal code stated
3) describe auto
i) year, make/trade name, model
- body type, # of cylinders, manufacturers gross vehicle weight rating
- VIN/ serial #
(this info is necessary for rating purposes & identification in the event of a claim)
ii) asks whether inspection is required
- asks if theres unrepaired damaged to auto
- asks if an auto has been modified/customized details
iii) estimated annual driving distance
- used for carpooling?
- business/pleasure?
- great commuting distances during rush hour?
- lienholder/lessor must be named with address which establishes insurable interest of applicant in auto & protects lienholder/lessor in the event of a claim
iiii) date of purchase, new/used, purchase price
- is applicant reg owner or actual owner? (establishes whether insured has insurable interest in auto & who has actual custody/control of auto)
4) driver info
i) names of all drivers in household/business, the driver’s license #’s of each, date of birth, sex, marital status
- date first licensed in Canada & class of license at that time, other class of license, date obtained, any drivers training courses completed (certificates must be attached), and approx. usage of each vehicle by each driver
ii) do any drivers qualify for retiree discount?
a) retired, no employment income, not working/operating a business
b) age 65 or older/ collecting CPP or QPP or other RPP
c) principal or rated driver of vehicle
iii) past license experience
- info is required for a 6 year period, but only info that is knowledge of applicant
iiii) past insurance experience
- asks for insurers name, policy #, and expiry date of applicants most recent insurance policy
- any info pertaining to insurance record of applicant & any listed drivers within past 3 years
- details relating to cancellations, denial of claims due to material misrep
- if applicant/listed driver been found by court to have committed fraud connected with auto insurance
5) previous accidents & insurance claims
- details about all accidents/claims arising from ownership, use, operation of any auto by applicant/listed driver during past 6 years
- vehicle, driver, type & description of claim, and amount paid must be indicated
6) convictions
- requires disclosure for all drivers listed of all convictions arising out of the operation of an auto during past 3 years
- for each conviction the date & description must be given
7) rating info
- summary of info from sections 1-6 completed by broker/agent
- used to calculate premium
- shows class, driving record, drivers, at-fault claim surcharges, conviction surcharges, list price of new vehicle, vehicle code, rate group, location, territory & discounts
8) insurance coverages applied for
- includes all mandatory (liab, AB, UAC, DCPD) and optional coverages (loss or damage)/44R
- includes partial payment of loss clause
9) remarks
- additional details relating to sections 1-6
10) method of payment
- type of payment plan, estimated policy premium, provincial sales tax, interest, total estimated cost, amount paid with app, amount still due, # of remaining instalments, amount of each instalment and instalment due date
11) declaration of applicant
- I understand that to qualify for a driver’s licence:
i) must not suffer from any mental, emotional, nervous or physical disability that significantly interferes with ability to safely drive an auto
ii) must not be addicted to alcohol/drugs…
iii) must notify the MTO immediately if they become physically/mentally disabled to the extent…
- to the best of my knowledge:
i) all listed drivers are qualified to hold a license
ii) the details in sections 1-6 and 9 are correct - contains the warning regarding misrep and false particulars of auto to be insured (identical to section 233 (1).)
12) report of broker/agent
- short section that must be completed, signed, & dated by broker/agent
1) has the broker/agent bound risk?
2) is the business new to broker/agent?
3) what type of Motor Vehicle Liability Card was issued - temp/perm/none
4) how long has broker known applicant?
5) how long has broker known principal driver?
What is the most common court case dealing with auto insurance?
1) misrep arising from applicant not being the registered owner
2) misrep involving past accidents, refusals of insurance and use of vehicle
What does the word willfully suggest?
- that the insured intended to deceive the insurer when making a claim to which they were not otherwise entitled to
ex) consumption of alcohol, nature/amount of loss, identity of the driver and consent of owner
