Chapter 5+ Flashcards
Outline the options available for insuring loss of or damage to the insurers automobile
Own damage coverage
Physical damage coverage
First party veh damage coverage
Loss or damage coverage
What are the 4 subsections of coverage under loss or damage coverages
Specified perils
Comprehensive
Collision or upset
All perils
List the specified perils
Fire Theft or attempted theft Lightening Windstorm, hail, or rising water Earthquake Explosion Riot or civil disturbance Falling or forced landing of an aircraft The stranding sinking burning derailment or collision of a conveyance in or upon which a described automobile is being carried on land or water
What does comprehensive insurance cover
Perils listed in specified perils
Falling or flying objects
Missiles
Vandalism
What is All perils ?
All perils is the combination of collision or upset coverage with comprehensive
Exclusions under loss or damage coverage
General wear and tear or lack of maintenance on a veh
Damage caused by theft of a person who is in the lawful possession of the veh
Damage caused by voluntary parting with title ownership
Damage directly or indirectly caused by contamination of radioactive material
Damage to contents of trailers or personal effects
Damage to media in which is detached from the veh
Damage caused by the insured if they are under the influence of alcohol or drugs.
Loss or damage caused by a person living in the same dwelling
Outline the additional benefits under loss or damage coverages
Payment if charges
Forgoing the right to recover
Coverage for temporary substitute automobiles
Coverage for loss of use due to theft
What is general average
A term used in marine insurance for a loss that is shared by interests such as owner of the ship, owners of the cargo, receivers of the freight charges
What additional charges may arise that the insurer agrees to pay under payment of charges
General average charges
Salvage charges
Fire department charges
Canadian or us customs duties
When will an insurer for go the right to recover ?
When the person has the automobile in connection with a garage business, including selling, repairing, maintaining, storing, servicing or parking the automobile
When the person using the automobile violates any condition of the policy or operates it for any illegal use, as described under the policy under the exclusions for loss or damage coverages
Define TSA temporary substitute automobile
An automobile that is used by an insured temporarily because the described automobile is out of service because of a break down, repairs, servicing, theft, sale, or destruction.
Summarize Loss of use due to theft coverage
There must be coverage purchased under a subsection of the loss or damage to insured automobile section of the policy, which includes protection against loss by theft
Theft of entire automobile
Coverage is confined to the reimbursement of the actual outlay for rental of a similar substitute automobile, for hiring taxis, or for public transit
Reasonable expenses will be reimbursed to a total amount of 900
The period of reimbursement doesn’t begin until 72 hours after the police or insurer has been notified
Under loss of use due to theft when does the reimbursement period end?
When the stolen veh is replaced
If the veh is recovered and after the necessary repairs are completed
Upon such earlier date as the insurer makes or tenders settlement for the loss or damage
Phantom vehicle
A veh that does not exist or is already wrecked
Paper collision
When parties conspire to create the illusion of an accident using either pre damaged vehs or by intentionally and covertly inflicting damage on suspects vehicle
What’s the purpose of automobile insurance application
The application contains information needed to underwrite, rate, and issue the policy. The actual form used must be approved by the provincial or territorial insurance regulator and is standard within a given jurisdiction
What provisions apply when a policy is issued and it differs in any way from the written application
The insurer must point out to the insured in writing in what ways the policy differs from the application
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
Outline the information requested in an automobile insurance application
Item 1: applicants full name and postal address
Item 2: policy period
Item 3: particulars of the described automobile
Item 4: coverages
Item 5: list of all drivers of the described automobiles
Item 6: impairments
Item 7a: convictions
Item 7b: previous accident or insurance claims
Item 8: past licence experience
Item 9: past insurance experience
Item 10: use of veh
Item 11: commercial use of veh
Item 12: registered owner and actual owner info
Item 13: penalty of false statement
Item 14: additional info for drivers shown in item 5
Item: 15 name and address of employer
Item 16: all residents of household or employees in the business not already listed in items 5 and 14
Item 17: veh used for carpools or share the ride arrangements
Item 18: fuel if not powered by gas or diesel
Item 19: unrepaired damage
Item 20: special equipment
Item 21: veh anti-theft device
Item 22: previous addresses
Item 23: total number of private passenger vehicles in household
Item 24: remarks
Item 25: report of broker/agent
Item 26: broker/agent declaration
Item 27: description of any trailer if not listed
Item 28: commercial rated veh
Item 29: commercial use for veh
Item 30: any merchandise or material carried
Item 31: volatile, toxic, corrosive, radioactive, or explosive materials
Item 32: any machinery or equipment mounted or attached to the vehicle
Underwriting rules
The rules used by insurance companies to assess the insurability of a particular risk
Reasons insurers may reject risk
The insurer may not insurer that class of business
The risk may be so much more hazardous than the average that potential loss is almost certian
The risk may be substandard. The potential for improving our upgrading exists, but the applicant is not prepared to carry out suggested improvements
The risk could be very well managed with great engineering reviews but the claims frequency and severity for the last one or two years may have placed it in an unfavorable underwriting rating position
What is the criteria used in auto rating
Age, gender, and marital status Driving experience Driving record Other regular drivers Territory and distance driven annually Veh usage Veh description Coverage
Automobile statistical plan ( ASP)
A collection of statistical information that all automobile insurers who write business in Canada must record and file as prescribed by the superintendent of insurance commonly known as the green book
Commercial liability statistical plan ( CLSP )
A manual that sets out the statistical data reporting requirements of each participating jurisdiction currently only in Ontario
Ontario statutory accident benefits statistical plan ( OSABSP )
Every insurer that writes automobile insurance in Ontario must report data in accordance with the OSABSP
3 components of loss costs
Paid losses
Outstanding losses
Incurred but not reported losses
Earned loss ratio
Ratio of loss costs to the earned premiums
Define trending
The process of adjusting statistics for premiums and losses to current or anticipated future levels to represent changes in insurance experience from economic and demographic forces and to use data to determine present and anticipated future levels of cost
Define vehicle rate group
A rate group is a numerical value assigned to a vehicle based on its expected claims costs. The value assigned is based on a number of factors including body style horse power, costs of repairs, frequency and costs of actual claims and veh price
Canadian Loss Experience Automobile Rating ( CLEAR)
A method for classifying different models of cars for insurance purposes by using historical claims data, including collision, comprehensive, DCPD and accident benefits coverage
The control of rate boards exercised varies, as the following illustrates:
Prior approval - companies file their proposed dates and must wait for approval
File and use - companies file proposed dates and use them as proposed, but face inquiries by the board
File and use following adjudication period- companies file their proposed rates and the law allows a period of time such as 30 or 60 days during which the board can challenge them
Prior setting of rates by the board with various from benchmark - the board sets the rates and these are known as the bench mark
Provinces and territories that do not have rating boards includes
Northwest territories Nunavut Quebec Saskatchewan Yukon
Traditional rating vs UBI rating
Traditional: relies on actuarial studies of aggregated historical data to produce rating factors including the following driving record, credit bases insurance score, personal characteristics, veh type, garage location, veh use, previous claims, liability limits, deductible
UBI: driving behaviours and mileage are tracked using odmeter readings or in vehicle telecommunications device self installed into a special veh port. The data collected includes miles driven, time of the day the veh is driven, GPS where the veh is driven, rapid acceleration, hard braking, hard cornering, airbag deployment
Statutory conditions that apply to SPF 1 in Alberta
Material change in risk
Prohibited use by insured
Requirements where loss or damage to persons or property
Requirements where loss or damage to the automobile
Inspection of the automobile
Time and manner of payment of insurance money
Who may give notice and proofs of claim
Termination
Notice
Prohibited use by insured
They are not authorized to drive
They are not qualified to drive
They are below the min age requirement for licensing
They are engaged in any illicit or prohibited trade or transportation
They were in a race or speed test
Requirements where loss or damage to persons or property
Give prompt notice to the insurer of any accidents or resulting claims
Verify that a claim arose from the insured automobile being operated and that the responsible party is insured under the policy
Forward immediately to the insurer all the writs, claims, correspondence, and so on
Do not assume or admit liability
Do not interfere with claims proceedings
Aid in securing information and evidence and the attendance of the witness and cooperate in the defence of any action
Obligations of the insured where loss or damage to the automobile
When there has been a loss the insured us required to give prompt notice of loss, protect the automobile from further damage and submit a proof of loss within 90 days
Any further loss is excluded if it’s caused by the insureds failure to protect the automobile as far as reasonably possible
There are to be no repairs made nor any removal of evidence of damage unless the insurer gives it’s written consent or there has been a reasonable time for the insurer to examine the automobile
The insurer may require the insured to submit to an examination under oath and to present all documents pertaining to the loss
The insurers max limit of liability is at least ACV
The insured may not abandon the automobile even if the veh is a total loss
If the insurer and insured disagree about the repairs or replacements or amounts payable, they must comply a dispute resolution process as provided under the insurance act
