Chp 10: Endorsements and Special Coverages

Question 1

What is an endorsement? What is the purpose of an Automobile Insurance Endorsement?

Answer 1

An endorsement is an amendment to the policy that can change the terms and conditions of a policy. It can broaden, restrict or alter coverage.
Some risks that are excluded from autoplan or have only limited coverage require special coverage to be property protected. (Ex: collectors or vintage cars)

Question 2

What requires automobile insurance endorsements or special coverages? (5)

Answer 2

• Automobile storage
• Automobile value changes
• Underinsured motorists
• Loss of use
• Driving of non owned automobiles

Question 3

Endorsements related to reduction and deletion

Answer 3

Insurers cant use endorsements to change policy terms that would result in less coverage than what is mandated by the statutory conditions.
All endorsements that reduce or delete coverage must be issued with extra care and must be carefully explained to insured.
It is not permissible to delete or reduce TPL limits below the $200,000 minimum.

Question 4

What are the two forms of loss of use coverage?

Answer 4

• Loss of use only due to theft of the entire vehicle (available to all insureds who purchase own damage coverage including coverage for theft)
• Loss of use for reasons other than theft (Optional loss of use coverage, purchased separately)

Question 5

Loss of Use due to theft and provisions that apply

Answer 5

If insured vehicle is stolen and insured has own damage coverage that covers theft of entire vehicle, ICBC will reimburse the insured for cost of renting a substitute vehicle, hiring a taxi, or using public transportation.

Following provisions apply to this coverage:

• Coverage does not commence until 72 hours after theft is reported to police
• Coverage terminates either on date repairs are completed or when ICBC settles or offers to settle the claim for the vehicle, whichever is earlier.
• Coverage is available only after total limits of loss of use coverage are exhausted
• Coverage does not apply to taxis, U-drive vehicles, or limousine-use vehicles

Question 6

Optional loss of use coverage

Answer 6

Covers the loss of use of the vehicle due to an insured peril.
The difference between this and the loss of use due to theft coverage is that the eligibility for coverage for transportation replacement begins immediately after the claim for loss of use of the vehicle is reported. (Don’t have to wait 72 hours)
The amount paid for coverage will not exceed the amounts set out in the owners certificate
Coverage will terminate on the earlier of the following dates:
-Date on which repairs are completed
-Date on which corporation settles or offers to settle the claim for loss or damage of vehicle
-Once the coverage limits have been exhausted

Question 7

What are the policies and certificates available for covering special vehicles? (7)

Answer 7

• Collectors motor vehicle agreed value policy
• Non owned vehicle liability policy
• Non owned vehicle damage policy
• Rental vehicle policy
• Off road vehicle insurance
• Unlicensed vehicle policy
• Vintage motor vehicle certificate

Question 8

Collector Motor vehicle Agreed Value Policy

Answer 8

Covers vehicles that are collected by enthusiasts but do but do not qualify for vintage motor vehicle certificates.

Offers a range of TPL limits and own damage coverage. Premiums and licence plate fees are reduced and this coverage is not offered by ICBC and must be purchased through a private insurer.

Question 9

What makes a vehicle a “Collectable”?

Answer 9

Collector vehicles must be maintained or restored to a condition that conforms to original manufacturers specifications, it must be solely used for pleasure purposes and be at least:

• 25 years old and considered to be of collectible value
• 15 years old and considered to be of collectible value due to production being discontinued or being one of a limited number of vehicles produced

Also considered a collectible if registered in BC as a 1974 model or earlier, in condition which ICBC considers it of collectible value

Question 10

What is a Non owned vehicle liability policy (APV29)? and what are its exclusions?

Answer 10

Protects against liability imposed by law on the named insured because of loss, damage, injury or death arising out of use of a vehicle not owned, or leased by the insured.
Does not cover liability arising from the use or operation of any vehicle driven by the named insured, or any liability imposed upon any person insured by this policy, as well as:
- By any workers compensation law
- For loss of or damage to property carried in or upon a vehicle driven by any person insured by this policy

Question 11

Non owned vehicle damage policy (APV27)

Answer 11

protects insureds who operate and wish to purchase own damage coverage for vehicles and trailers belonging to others.

Question 12

Rental vehicle policy (APV281)

Answer 12

Insureds usually purchase this policy when they want to rent or borrow a vehicle for a short period of time.
Available for private passenger cars, commercial vehicles, motor homes, trailers and motorcycles.

Coverage provided includes:

• TPL with 1 million limit
• Accident benefits
• Underinsured motorist protection
• Collision
• Comprehensive
• Loss of use with daily limit of $25, and total of $250

Question 13

What is excluded under a rental vehicle policy? Describe accident benefits related to this policy?

Answer 13

It excludes vehicles used for commercial use, including:

• Delivering or carrying goods
• Carrying passengers in a vehicle with a seating capacity of 16 or more
• Carrying passengers for compensation or hire

Accident benefits under this policy are just “top up” benefits from the other policies. They are essentially the same except that they do not restrict coverage for a person who is not a BC resident

Question 14

Off road vehicle insurance

Answer 14

Includes snowmobiles, snow vehicles, all terrain vehicles, off road motorcycles and dirt bikes, utility terrain vehicles and golf carts.

Off road vehicles being operated entirely on private property are exempt from coverage, but can be registered if owner chooses to register them.

All off road vehicles operating on crown land, or forest service roads, and those with limited highway use require basic TPL coverage of $200,000.

Optional coverage is available through ICBC and it includes TPL coverage for use on highways in excess to basic limits or TPL coverage for use off highways, as well as own damage coverage.

Question 15

Unlicensed vehicle policy - What is the covered and what are the exclusions?

Answer 15

Covers certain types of off road vehicles while they are being used off the highway.
Applies only when the vehicle is operated by a person that is 16 years of age and older and holds a valid drivers license for that specific vehicle.

No coverage if vehicle being operated by a person who’s license is under suspension, and there’s no indemnity if the person is not a resident of BC or if the vehicle is an amphibious vehicle

Question 16

Vintage motor vehicle certificate (APV44)- how does a vehicle qualify for vintage number plates?

Answer 16

Covers vehicles that carry vintage license plates, to qualify, the owner must sign a declaration that the vehicle:

• is 30 years if age or older
• has been maintained as much as possible with original component parts
• will only be operated as a collectors item
• will not be operated for general transportation or commercial uses

Question 17

What may antique vehicles be used for?

Answer 17

• For presentation of the vehicle at a designated inspection facility
• For the purpose of obtaining vehicle repairs and services
• For exhibitions, club activities, parades and other like functions which may include participating in weddings and graduations, participating in public functions,etc.

Question 18

What coverage does APV44 provide?

Answer 18

Provides own damage coverage on a valued basis. This means ICBC will pay the stated value of the vehicle if it is declared a total loss provided that the vehicle be in the same condition at the time of the loss as it was declared when coverage was initially bound. If it fails this, than actual cash value will be paid.

Question 19

What are the special coverages used to extend autoplan coverage or alter autoplan insurance terms? (4)`

Answer 19

• Excess special equipment endorsement
• Limited depreciation coverage
• Replacement cost endorsement
• Storage policy

Question 20

Excess Special Equipment endorsement (APV300)

Answer 20

Covers vehicle equipment not supplied by or available from the manufacturer that has a combined greater value than :

• $1000 for permanently attached and shuttle mounted sound or communication equipment
• $5000 for other permanently attached equipment, including a custom paint finish

Each item of sound or communication equipment or other equipment and its value must be listed on the endorsement, and the vehicle must have own damage coverage to be covered under this endorsement.

Standard equipment is covered by normal policy, so not covered here, and vehicles with declared value do not require this endorsement, because special equipment is included in that value

Question 21

Limited depreciation policy - what is covered?

Answer 21

Provides the owner or lessee of a new or used vehicle that is three model years old or newer with protection against the effects of depreciation on the value of the vehicle in the event of a loss.
If the insured vehicle suffers loss or damage, it provides the following coverage:
-Total loss settlement based on the original price of the vehicle
-Repairs using new or used parts of like, kind, and quality to those used by the manufacturer

Question 22

What are the exclusions under a limited depreciation policy?

Answer 22

It excludes losses due related to warranties, and the following vehicle are also excluded:

• rebuilt vehicles (vehicles that have been in previous accident and declared a total loss, but have been repaired)
• Vehicles with altered status (Significant modifications)
• Replicars and replikits (custom made vehicles with a body that is a copy of a vintage vehicle)
• Speciality vehicles (low powered vehicles, farm trucks, off road vehicles, etc)
• For vehicles that are in model year 3, excludes total losses caused by fire, theft, vandalism, or malicious mischief.

Question 23

What are the loss settlement options under a limited depreciation policy?

Answer 23

Settlement options available depend on whether the vehicle is new or used, and whether an accident renders the vehicle a total loss (or constructive total loss) or a partial loss.

If declared total loss, insured will recieve either of the following:

• replacement vehicle
• cash payment

If not a total loss, ICBC determines that parts must be replaced, replacement is done:

• using new or used parts of similar kind or quality of those used by the manufacturer
• without requiring the insured to contribute any amount for depreciation toward the cost of the parts that are replaced

Question 24

What items are subject to depreciation in a limited depreciation policy? (4)

Answer 24

• Tires
• Batteries
• Convertible tops
• Repainting the entire vehicle

Question 25

Replacement cost endorsement - What is covered? exclusions and settlement options?

Answer 25

Provides the owner of a vehicle that is three model years old or newer with protection against the effects of inflation and depreciation on the value of the vehicle in the event of a loss.
Provides the following coverage:
-Total loss settlement based on the cost of replacing the vehicle with new one of the same make and model at current market prices
-Repairs using original manufacturer parts if the vehicle is not a total loss

• Exclusions are the exact same as the limited depreciation policy except for the model year 3 peril exclusions.
• Settlement option is similar to limited depreciation policy except that when the vehicle is not total loss, replacement of parts is done using new original equipment manufacturer parts (OEM), or new parts of like, kind or quality.

Question 26

Storage policy (APV 345)

Answer 26

Provides TPL coverage, own damage coverage, and accident benefits for a vehicle in storage, during conveyance; in the care, custody and control of a garage service operator, or while on consignment.

Question 27

What does a vehicle in storage mean?

Answer 27

A vehicle not currently licensed that is being stored on the insureds private property or on a private property located anywhere in Canada, The United States, or on a vessel between ports in Canada and the US, and that it will not be driven on a highway, private road or private property.

Question 28

What does a vehicle in conveyance mean?

Answer 28

Vehicle that is being transported on a highway by conveyance, provided that no part of the vehicle is in contact with the highway

Question 29

What does a vehicle on consignment mean?

Answer 29

A vehicle currently not licensed that has been placed by the registered owner in the care, custody and control of a garage service operator