Chapter 6 - Section 2

Question 1

Identify three persons insured under Section A of the SPF No. 1

Answer 1

• The Named Insured;
• Everyone else who personally drives the automobile with the consent of the Named Insured; and
• Everyone who personally operates a part of the automobile with the consent of the Named Insured

Question 2

Identify five exclusions that are general to Section A

Answer 2

• For any liability imposed by any workers’ compensations law upon any person insured by this section; or
• For loss or damage resulting from bodily injury to or the death of any employee of any person insured by this section while engaged in the operation or repair of the automobile; or
• For loss of or damage to property carried in or upon the automobile or to any property owned or rented by, or in the care, custody or control of any person insured by this section; or
• For any amount in excess of the limit(s) stated in Section A of item 4 of the application, and expenditures provided for in provisions of the section of the Insurance Act (Automobile Insurance Part) relating to the nuclear energy hazard
• For any liability arising from contamination of property carried in the automboile

Question 3

Explain how, if at all, Section A would respond if the insured was intoxicated at the time of a loss

Answer 3

This coverage section insures bodily injury and property damage caused by insured’s while under the influence of intoxicating liquor or drugs

Question 4

Identify two agreements of the insured under Section A

Answer 4

• By the acceptance of the policy, the insured “constitutes and appoints the insurer as his irrevocable attorney”
• The insured also agrees to reimburse the insurer for any amounts paid under the policy by reason of the provisions of any statute relating to automobile insurance and which the insurer would not otherwise be liable to pay under the policy

Question 5

Section B is on a “no fault” basis. Explain what this means

Answer 5

There is no requirement to show that the insured was legally responsible for the injuries caused to the claimant

Question 6

Identify the three subsections of Section B

Answer 6

• Subsection 1 - Medical Payments and Funeral Expenses
• Subsection 2 - Death Benefits and Loss of Income Payments
• Subsection 3 - Uninsured Motorist Coverage

Question 7

Identify two areas which might be considered reasonable expense under Subsection 1

Answer 7

• Medical, surgical, chiropractic, dental, hospital, professional, nursing and ambulance service
• Other services and supplies essential to treatment or rehabilitation

Question 8

Identify the three conditions that must apply before payment of any loss of income under Subsection 2

Answer 8

• Benefits payable on a weekly basis subject to a 7 day waiting period
• Insured’s must be able to establish that time they were employed at the time of the accident… or, if 18 years of age or over, employed for any six months during the preceding 12 month period
• Benefits cease at end of 104 weeks

Question 9

Define “Uninsured Automobile”

Answer 9

One in which the driver nor owner has applicable and collectible bodily injury liability insurance

Question 10

Define “Unidentified Automobile”

Answer 10

One which causes bodily injury or death to an insured person arising out of actual contact of that automobile with the automobile in which the insured is an occupant

Question 11

Identify three conditions to meet before a claim will be paid for an unidentified automobile under Subsection 3

Answer 11

• It must be shown that the identity of either the owner or driver cannot be ascertained
• The accident must be reported to authorities within 24 hours
• A statement must be filled, under oath, with the insurer within 30 days

Question 12

Identify the coverage options or subsections of Section C of the SPF No. 1 and briefly explain the perils provided by each

Answer 12

• Subsection 1 - All Perils:
  From all perils
• Subsection 2 - Collision or Upset:
  Caused by collision with another object or by upset
• Subsection 3 - Comprehensive:
  From any peril other than by collision with another object or by upset
• Subsection 4 - Specified Perils:
  Caused by fire, lightning, theft or attempt thereat, windstorm, earthquake, hail, explosion, riot or civil commotion, falling or forced landing of aircraft or of parts thereof, rising water, or the stranding, sinking, burning, derailment or collision of any conveyance in or upon which the automobile is being transported on land or water

Question 13

Most insurers include impact with wild animals under Comprehensive, rather than Collision. What are two advantages to the insured in this circumstance?

Answer 13

• The deductible applying to comprehensive claims is usually less than that provided for collision losses; and
• Claims under this section do not count as chargeable losses and, as such, do not affect the renewal premium charged to the insured to the same extent

Question 14

A deductible is normally applied to all losses under Section C. List three losses where there is no deductible applied

Answer 14

• Fire
• Lightning
• Theft of the entire vehicle

Question 15

Explain how, if at all, Section C would respond if the insured was intoxicated at the time of a loss

Answer 15

At the time of an accident, law enforcement officers may be called upon to form judgments concerning people’s ability to drive. If in their opinion, insured’s are intoxicated/under the influence and cannot properly control their automobiles, there is no coverage for physical damage. If law enforcement knows the insured has consumed alcoholic beverages and are still able to property control their automobile, physical damage to automobile would be covered

Question 16

List three exclusions to Section C

Answer 16

• Caused by the conversion, embezzlement, theft or secretion by any person in lawful possession of the automobile under a mortgage, conditional sale, lease or other similar written agreement
• Caused by the voluntary parting with the title or ownership, whether or not induced to do so by any fraudulent scheme, trick, device or false pretense
• Caused by contamination by radioactive material

Question 17

Outline the purpose of the following:

General Average

Answer 17

Designed to provide payment for ocean marine losses voluntarily incurred for the safety of the entire venture

Question 18

Outline the purpose of the following:

Custom Duties

Answer 18

If the automobile is damaged in an accident in the United States and repair is made there, those costs are subject to payment of customs duties. The insurer agrees to pay those duties

Question 19

Identify three situations where the insurer would not waive its right of subrogation under Section C

Answer 19

• Those having possession for the purposes of garaging
• Those who have breached a policy condition
• Those drivers or operators convicted of an alcohol related offence at the time the damage was caused, specifically by:
  Impaired driving
  Breathalyser offence
  Refusal to undergo a road test
  Refusal of a breathalyser test

Question 20

Coverage for loss of use arising directly as a result of theft of the entire automobile is subject to three limitations. Briefly explain what they are

Answer 20

• Provides for reimbursement of up to $25 a day for a maximum of 30 days
• Payment is made only for costs incurred to rent a substitute automobile, including payment of taxicab and public transportation fares
• A 72 hour waiting period applies, commencing after notice of theft of the insured automobile has been provided to the insurer or to the police

Question 21

Your client is planning to drive to Mexico on holiday and would like to know if his SPF No. 1 he purchased from you will respond to any accidents that may occur while on vacation. How would you answer his question

Answer 21

There is no coverage provided in Mexico for losses. All motorists will be required to purchase insurance from the Mexican government before being permitted to drive in that country

Question 22

Your client has called to explain that he purchased a new vehicle and has had an accident before notifying your office. Would there be any coverage under his SPF No. 1 with you? Outline your response to this insured

Answer 22

A newly acquired automobile is automatically insured when it:

• Replaces an automobile described on the policy
• Is in addition to others owned by the insured and which are all insured by the same insurer

Coverage is provided for 14 days without requirement for notice to the insurer. Prior to the expiry of 14 days, the insurer must be directed to specifically insure the replacement or additional vehicle

Question 23

Your client has called to advise that his 18 year old daughter was involved in an accident this past weekend. She was driving a friend’s car that was uninsured. There are third party injuries and damage to the friend’s car. Outline your response to this insured

Answer 23

• May apply to the Facility Association for payment of damages
• The primary focus of the fund established by the Facility Association is to pay for bodily injury or death claims caused by uninsured or unidentified automobiles, payment is limited to $200,000
• Payment for damage to the claimants automobile will not be provided if, at the time of the accident, the actual or registered owner “was driving the automobile or had the care or control of it, whether it was in motion or not”

Question 24

Identify five uses that are not considered carrying passengers for compensation

Answer 24

• Car pools
• Sharing cost of trip
• Carrying of domestic servants
• Carrying of clients or customers or prospective clients or customers
• Occasional and infrequent use of automobile for transporting of children to or from activities conducted as a part of an educational program

Question 25

Outline five prohibited uses by the insured under the SPF No. 1

Answer 25

• Unless he is for the time being either authorized by law or qualified to drive; or
• While his license to drive or operate an automobile is suspended or while his right to obtain a license is suspended or while he is prohibited under order of any court from any driving or operating an automobile; or
• While under age 16 or under such other age at which a license or permit to drive may be issued to him
• For any illicit or prohibited trade or transportation
• In any race or speed test

Question 26

Outline four requirements of the insured in the event of loss or damage to persons or property

Answer 26

• Promptly give written notice to the insurer of the accident
• Verify by Statutory Declaration that the claim arose out of the use or operation of the automobile and that person so involved in use or operation is an insured under this contract; and
• Forward immediately any letters, documents, advice or writ received by him from or on behalf of the claimant
• Assist the insurer in securing information and evidence and the attendance of any witnesses and co-operate, except financially, in defense or subsequent prosecution of any appeal