Chp 9: General provisions, definitions, and exclusions Flashcards
What are the general provisions under an automobile policy? (6)
- Territory
- Occupant defined
- Consent of owner
- Automobile defined
- Two or more automobiles
- General exclusions
Territory- Difference between SPF 1 and ICBC autoplan
SPF 1- specifies that policy applies when vehicle is being operated, used, stored or parked within Canada, the US, or any other jurisdiction designated in statutory accident benefits schedule (SABS, for Ontario policies), and on a vessel between ports of those countries. All dollar limits described in policy are in Canadian funds
ICBC- similar, covers losses occurring in Canada, US, or vessel travelling between them
Occupant Defined - SPF 1
- Provision defines who is considered an occupant of the insured vehicle
- Occupant is defined to include a person, including the driver. in or on an automobile or getting into, on, out of, or off an automobile
Occupant defined - ICBC autoplan
ICBC regulation defines occupant as a person operating or riding in or on a vehicle or camper and includes
- A person entering or alighting from a vehicle or camper
- A person, other than garage service operator, who is working in or on a vehicle or camper owned by them.
Consent of owner- Difference between SPF 1 and ICBC autoplan
SPF 1- If your an occupant of a vehicle that is being used without owners consent, you will not be entitled to compensation under the owners policy.
ICBC- No need for a specific exclusions to deny TPL coverage to an occupant or driver of a vehicle driven without consent, because insured person under TPL is deemed to be a person who, with the consent of the owner, operates the vehicle described in the owners certificate. Therefore if your not considered an insured, your not insured under policy.
-AB are unavailable to both drivers and occupants of vehicle driven without consent
Automobile Defined - what is a described automobile and what other automobiles are covered under this provision?
Described automobile - The vehicle identified in an insurance policy
Other vehicles covered under this provision include:
- Newly acquired automobiles
- Temporary substitute vehicles (TSA)
- Other automobiles or “burrowed” automobiles
- Trailers
Automobile defined under ICBC
No similar definition of vehicle in regulations for ICBC, however they do outline coverage available when insured is driving other vehicles in addition to vehicle described in policy.
With autoplan, every vehicle has its own insurance, and license plate is policy number
Described automobile under SPF 1 and ICBC
SPF 1: This is any automobile or trailer registered in the name of the policyholder and specifically described in the policy. The certificate of insurance shows which coverages the insured has purchased for each described vehicle.
Coverages include:
-TPL
-Accident benefits
-Uninsured automobile
-DCPD
-Loss or damage to described vehicle if coverage is purchased
ICBC: no similar legislation exists as each vehicle is insured under a separate policy
Newly acquired automobiles - SPF 1
When an insured purchases an additional or replacement vehicle, coverage is automatically extended to it, subject to certain conditions:
- Insured must notify insurer within 14 days of taking possession of new vehicle
- Insurer has right to inspect new vehicle at any reasonable time
- Replacement vehicle is insured for same coverages as the described vehicle, however the insured must not be engaged in the business of selling vehicles
*14 days of coverage are automatic but not free and if insured has more than one vehicle, only coverages that are on all the vehicles extend to the new vehicle (Ex: insured has two vehicles, one with collision, and one without, the new vehicle will not get collision)
Newly acquired automobiles - ICBC
- Covered differently under auto-plan
- Provides 10 days of coverage from the date the substitute vehicle was acquired only if insured no longer has insurable interest in the vehicle it is replacing
- New vehicle must be same type as one its replacing
- coverage applies only if license plates are current and compatible (Ex. Private passenger plates from old vehicle must be installed on new private passenger vehicle)
Temporary Substitute Automobiles - SPF 1
- Provision defines a TSA as a vehicle that is used by an insured temporarily because the described automobile is out of service due to breakdown, repairs, servicing, theft, sale, or destruction.
- Coverage under TPL and AB is extended to TSA’s. Coverage is not provided for physical damage to a TSA, expect for limited coverage provided under loss or damage coverage. (Which is difference of deductibles between own policy and TSA policy)
Temporary substitute automobiles under SPF 1 - what happens when the insured is legally liable for damage to TSA?
- If insured is liable, the TSA policy responds first as it is primary cover, but if no cover/insufficient cover, the drivers policy will respond to physical damage of TSA
- If there is no negligence on behalf of driver of TSA, no reimbursement will be made to owner of TSA, unless a tort action is started by the owner against the driver.
Temporary Substitute automobiles under SPF 1 - under what situations will the liability coverage for the driver respond rather than the TSA’s owners policy? (2)
- The TSA is uninsured
- The limit of liability under the TSA’s policy is insufficient to pay a judgement or settlement
Temporary Substitute vehicle under ICBC
-For TSA coverage to apply. the insured must have limits in excess of the minimum provincial limit
-If insured has increased liability limits, or own damage coverage, both will apply to TSA
-Basic autoplan only covers insureds legal liability for loss or damage to TSA
Accident benefits are available from TSA if registered in BC, or if its not registered in BC, are available BC driver license.
Other automobiles under SPF 1 - what are the coverages available?
Under the owners policy, other automobiles are covered if they are private passenger vehicles owned by another person and loaned to the insured.
The coverages available for other automobiles include:
- Liability
- Accident Benefits
- Uninsured automobile
- DCPD
Other automobiles under SPF 1- What conditions must be met for coverage to extend to other automobiles? (8)
- Other automobile must be a private passenger or station wagon type
- Must be personally driven by insured or insured spouse
- Must not have gross weight over 4500 kg
- The named insured under owners policy must be an individual
- May not drive other automobile in connection with business of selling, repairing, storing, etc.
- May not be used to carry paying passengers
- Other automobile cannot be one that the insured or anyone in insured household owns or uses regularly
- Other automobile cant be owned, hired, or leased by the insureds employer or employer of anyone living in the insureds household
Other automobiles under ICBC autoplan
Insurance regulation extends coverage to borrowed vehicles similar to the automobiles owners policy, although there is no restriction to private passenger or station wagon type vehicles
Other automobiles under ICBC - Under what conditions will TPL not be extended for borrowed vehicles?(3) and what new rules impact coverage for borrowed vehicles under ICBC? (2)
- If vehicle is not licensed under MVA
- If vehicle is exempt under the act (Govt vehicles)
- Operating vehicle without consent from owner
New rules that impact coverage include the following:
- Customers will be required to list all drivers who may operate their vehicle
- Optional unlisted driver protection coverage - covers situations where a driver needs to lend a vehicle to someone not listed on policy
Trailers under SPF 1
- Owners policy gives unlimited permission to the insured to pull trailers, it does not differentiate between owned or non owned trailers.
- TPL coverage, Accident Benefits, and uninsured auto coverage will apply to any trailer used in connection with the automobile
- DCPD will apple to owned trailers not desribed on the policy. If the trailer:
- –is attached, or normally used with vehicle that has gross weight of no more than 4500 Kg
- –Is not designed or used for living in, to carry passengers or for commercial purposes
Trailers under ICBC
Trailer must be insured separately. Its different from owners policy because that extends liability of the towing vehicle to trailers, ICBC does not do that
Two or more automobiles Insured - Difference between SPF 1 and ICBC
SPF 1: When 2 or more vehicles insured under same policy, each one is treated as if it were insured separately. This avoids confusion about limits and coverage.
- IF insured is operate a non owned automobile and is involved in an accident, the insurer is only liable to pay the amount of liability that is the highest for anyone of the automobiles described in the policy. (Ex: vehicle 1 - limits of 300k, vehicle 2- limits of 500k, insurer will cover insured up to 500k)
- If insured has 2 or more vehicles insured by different insurers, and if accident occurs while insured is operating a non owned auto, the loss will be prorated among the insurers, and the limit of liability will be equal to to the highest limit provided by any one policy
ICBC: so such provision exists because vehicles must be insured seperately
General exclusions - What are the exclusions under this provision? (3)
- Excluded uses
- Garage Workers
- War risks
Excluded Uses under SPF 1 (3)
No coverage while automobile is being used for following purposes:
- The automobile is rented or leased to another
- Is used to carry explosives, or to carry radioactive material
- Is used as a taxicab, public omnibus. or for carrying passengers for hire
What is NOT considered to be carrying passengers for compensation or hire? (5)
- Giving someone a ride in return for a ride
- Sharing the cost of an occasional trip with others in vehicle
- Carrying a domestic worker hired by an insured
- Carrying current or prospective clients and customers
- Occasionally carrying children to or from school activities that are conducted within the educational program
Excluded uses under ICBC - differences between ICBC and SPF 1
-ICBC autoplan does not exclude the same vehicle uses as the SPF 1. Instead ICBC has specific rate classes for many of the uses that are excluded under SPF 1.
ICBC regulation excludes nuclear energy hazards, however it does not exclude carrying radioisotopes that are:
- Packaged and labelled in accordance with the Transportation of Dangerous Goods Act
- To be used for medical treatment, research, photography, X-ray ,etc.
Garage workers - Difference between SPF 1 and ICBC
SPF 1: Business of garage operators and workers is not covered under owners policy, would be covered under garage policy (SPF 4)
ICBC: Regulation contains a garage exclusion requiring garage personal to be covered under a garage policy
War Risks - Difference between SPF 1 and ICBC
Similar for both, insurer will not be liable under any coverage except TPL for any loss, damage, injury or death caused by war activities.
Most insurance polices have a war risk exclusion because such losses would be of a magnitude beyond the ability of the private industry to absorb
What is ridesharing and carsharing?
Ridesharing - An arrangement set up by means of a website or mobile app in which a passenger travels in a private vehicle driven by the owner, for free or for a fee
Carsharing- An arrangement set up by means of a website or mobile app that links renters, and car owners.
Ridesharing and exclusions
Regular owners policy excludes using personal vehicles for commercial purposes, including carrying a passenger for a fee, therefore ridesharing is excluded.
TPL, own damage coverage, Accident benefits can all be excluded if vehicle used for ridesharing under owners policy
The case for ridesharing - What can ridesharing be summarized as? (8)
- Ridesharing apps (Uber) link registered vehicle owners with riders
- App provides users with option of selecting from services providing various types of specialty vehicles
- Vehicle owners register ridesharing app as independent drivers or partners
- Driver partners set their own hours
- Riders post trip requests on app, including rider details and pick up and drop off locations
- Drivers access app to select rider request
- Once ride is complete, riders credit card is billed by the app, no cash exchanged
- App operators pay the drivers based on completed fairs and deduct a service fee for providing the app
What are the three distinct commercial activities during the ridesharing process that makes the regular owners policy invalid? (3)
Broken up into 3 periods:
- Period 1: driver is accessing the app in the vehicle, but has not yet selected a ride
- Period 2: Driver has accepted a ride and is driving to pick up passenger
- Period 3: Driver is carrying passenger from pick up to drop off
All these activities make owners policy invalid, and require separate coverage
Insurance for ridesharing drivers - Traditional way of insuring vehicles for ridesharing
Commercial vehicles such as taxis are typically insured under a standard owners policy with addition of a permission to carry paying passengers under endorsement OPCF 6A in Ontario or SEF 6 in Alberta. Up until 2016, this was the only way to insure a vehicle used for ridesharing
What are some solutions for encompassing the growing risk of uninsured drivers related to ridesharing? (4)
To be effective, a solution must encompass the following:
- A rating structure that chargers rideshare drivers a fair rate based on their use
- Premiums that cover claims so that personal use policy holders do not subsidize ridesharing drivers
- Market availability for ridesharing drivers
- Premiums that are reasonably affordable
Ridesharing endorsement- what criteria must be met to get this coverage? (3)
Can be added to standard owners policy to grant permission for the driver to carry paying passengers, but these endorsements are not stand alone, the driver has to be insured with a specific insurer that offers this endorsement and meet the following criteria:
- Must be contracted with the Transportation network company (TNC)
- Must not exceed the maximum number of driver hours
- Must meet minimum licensing and driver experience guidelines
Provincial regulations for ridesharing
Alberta - Any TNC (such as Uber) operating in Alberta must purchase an SPF 9. This automatically covers all drivers contracted with the TNC while engaged in ridesharing activities for TPL, AB, and optional own damage coverage
Quebec- Quebec’s approach to ridesharing is that it is essentially a taxi service and should be regulated by province. Driver will be required to obtain a taxi class drivers license, a taxi permit, and commercial insurance.
Ontario - Financial services commission of Ontario (FSCO) approved changes to definition of fleet under insurance act, which allows ridesharing companies to insure all of its driver vehicles under the fleet policy. Drivers are required to inform their insurance companies they are involved in ridesharing, and the two policies (owners and fleet policy) work together for when a claim arises. If personal use- owners policy covers it, and if in process of ridesharing- fleet policy covers it
Carsharing and Insurance
Carsharing services provide insurance to car owners. This commercial insurance provides coverage for the vehicle while it is being delivered and during the rental period when a renter is using the car. The commercial insurance can include the following:
- TPL
- Accident benefits
- Physical damage
- Uninsured automobile
