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CAIB 1 > Intro to Automobile Insurance Ch. 7 > Flashcards

Intro to Automobile Insurance Ch. 7 Flashcards

1
Q

Which provinces have government automobile insurance plans? (4)

A

BC, Saskatchewan, Manitoba, and Quebec

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2
Q

What are the two systems of automobile insurance in Canada?

A

Tort System- allows an injured party to sue the responsible owner or driver for damages for bodily injury and property damage.

No-fault System- the injured party does not have to sue the responsible party for bodily injury or property damage losses, instead, these amounts can be claimed directly from the insured’s own policy.

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3
Q

What information is needed on an automobile insurance form for List of Drivers?

A

How many years licensed and what percentage of time they will use the vehicle.

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4
Q

How far back does a convictions history go?

A

6years

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5
Q

How far back does an accident and claims history go?

A

3 years

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6
Q

What information is found in an applicants driver history?

A

If the applicant’s drivers license been suspended, cancelled or lapsed in the previous six years, and if reinstated whether there have been any subsequent convictions or suspensions.

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7
Q

What information is important in ‘Use of Vehicle’?

A

Whether the vehicle is used for pleasure or business, if used to commute to work, the usual distance driven.

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8
Q

What is the purpose of the Facility Association?

A

To provide coverage for those drivers that carry a higher risk that private insurers are not willing to insure.

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9
Q

What are the four coverages included on every SPF 1?

A

Coverage A- Third Party Liability
Coverage B- Accident Benefits
Coverage C- Loss or or Damage to Insured Automobile
Coverage D- Uninsured Motorist Cover(some provinces include this in coverage B)

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10
Q

Third Party Liability: Insuring Agreement definition

A

Insures the legal liability of the insured for bodily injury and property damage arising out of the ownership, use or operation of the insured automobile.

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11
Q

Third Party Liability: Persons Insured defined

A

Persons insured are the named insured on the policy, including anyone who personally drives the insured automobile or operates any part of it with the insured’s consent.

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12
Q

What is the purpose of Financial Responsibility Laws?

A

To ensure that the innocent victims of automobile accidents are not left without compensation for the bodily injury and property damage that has been done to them, the Insurance Act requires automobile owners to purchase a minimum amount of third party liability insurance, usually $200,000.

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13
Q

Discuss Priority of Payment Laws

A

In the event there is a claim against the insured for both bodily injury and property damage, and there is not enough insurance to pay fully for both of them, the law dictates that the majority of money be set aside to pay for the bodily injury component of the claim.

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14
Q

Name 4 ways an insured could breach their automobile insurance contract.

A
  • use vehicle in race or speed test
  • transport passengers for compensation
  • knowingly allow a person who’s driver’s license was suspended to drive the vehicle
  • driving the vehicle when over legal blood alcohol limit
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15
Q

How do insureds provide proof of motor vehicle liability insurance?

A

With “pink cards”, or the pink copy of registration, which are issued by the inter-provincial motor vehicle act to provide evidence that third party liability minimum coverage have been purchased for the insured vehicle.

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16
Q

Exclusions of Liability Coverage on Owners Form automobile policy (3)

A
  • for bodily injury cause to a person who is covered by WCB
  • injury or death of an employee
  • damage to or contamination of property carried in or upon vehicle, belong to insured or others
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17
Q

At no extra cost to the insured, what do Additional Insuring Agreements cover?

A

Cost to investigate and negotiate settlement of the claim, defense costs, court costs, interest on award, and immediate medical aid costs.

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18
Q

What basis are Section B- Accident Benefits paid?

A

On a no fault basis. Accident benefits are payable under the insured’s own policy without regard to fault.

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19
Q

Who are the persons insured by Accident Benefits Coverage? (3)

A

The insured and any other permitted drivers who sustain injury
injured occupants
injured pedestrians

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20
Q

In subsection 1 of Section B Accident Benefits, What Dos Medical, Rehabilitation and Funeral Expenses cover?

A

Pays all reasonable expenses for necessary medical, surgical, chiropractic, hospital, professional nursing and ambulance services essential for the treatment, occupational retraining or rehabilitation of the insured person.
Funeral expenses are paid as a lump sum amount per person.

21
Q

Subsection 2 of Section B- Accident Benefits covers Death Benefits and Loss of Income Payments.
How are the amounts of benefit payable determined in death benefits, and how does an insured qualify to collect Loss of Income Payments?

A

The amount of death benefit payable is determined by the status of the deceased’s income for the household in the year preceding the date of the accident.

To qualify to collect the Loss of Income Payments, the insured over 18 years of age must have been employed at least 6 of the previous 12 months, and been unable to perform those duties for a period of at least 7 days.

22
Q

Subsection 3 of Section B-Accident Benefits, gives Uninsured Motorist Protection.
What is the amount of this benefit?

A

Amount of Benefit is up to the minimum limit of liability insurance required to be purchased, usually $200,000

23
Q

What four conditions are required to be met to qualify for Accident Benefits coverage for unidentified automobile claims?

A
  • neither driver nor automobile can be determined
  • claim must be made within 30 days to insurer
  • police are notified within 24 hrs
  • automobile must be available for inspection.
24
Q

List 6 exclusions from Section B- Accident Benefits

A
  • race or speed test
  • carrying radioactive material
  • suicide
  • sickness or disease
  • Worker’s Comp
  • illegal use
25
Q

What are the 4 types of coverage available in Section C- Loss or Damage to the Insured Automobile

A
  • All Perils
  • Specified Perils
  • Collision and Upset
  • Comprehensive
26
Q

With All Peril auto coverage, there is a deductible applied to all losses except: (3)

A
  • fire
  • lightening
  • theft of entire vehicle
27
Q

Describe benefit of All Perils Coverage in Section C-Loss or Damage to Insured Automobile, in regards to theft?

A

All perils will provide coverage for theft when the automobile is stolen by someone living with the insured.

28
Q

The insurance company includes the following coverages under the Standard Automobile Policy (Owners Form) when physical damage coverage has been purchased by the owner of an automobile. -General Average
Explain what this covers.

A

General Average applies when automobiles must be thrown overboard while being transported on water by vessel in order for the vessel to continue to be safe. If the insured’s automobile was not one of those thrown overboard, they will still share in the payment of the loss to those that were.

29
Q

The insurance company includes the following coverages under the Standard Automobile Policy (Owners Form) when physical damage coverage has been purchased by the owner of an automobile. -Salvage Costs
Explain what this covers.

A

The insured is required to take all reasonable means to protect the insured vehicle from further loss or damage after an accident.

30
Q

The insurance company includes the following coverages under the Standard Automobile Policy (Owners Form) when physical damage coverage has been purchased by the owner of an automobile. -Payment of Customs Duties
What is covered?

A

When repairs have been made in the USA to the insured vehicle after an accident in that country, there may be customs duties owed based on the value of those repairs. These duties will usually be required to be paid before the automobile is allowed to cross the border back into Canada.

31
Q

Summarize coverage provided on Temporary Substitute Automobiles.

A

If the insured’s vehicle cannot be used because of a breakdown, repair, servicing, loss, destruction or sale, the insurance company agrees to provide the insured with the same coverage for any temporary substitute automobile they are using during that time.
Payment is made only when the client is legally liable for damage to the temporary vehicle.

32
Q

How long must an Insured wait in order to be eligible for a substitute automobile due to a loss by theft of entire vehicle?

A

The Insured must wait 72 hrs after the loss has been reported to the insurer or police.

33
Q

What are the only 2 coverages available on rented automobiles?

A

Section A- Third Party Liability

Section B- Accident Benefits

34
Q

What are three business uses not reported to insurer that could cause coverage denial?

A
  • taxi
  • carrying radioactive material
  • vehicle is rented or leased to other
35
Q

Identify three compensation situations allowed by automobile policies?

A
  • car pool
  • sharing the cost of a trip
  • occasionally driving children to school events
36
Q

Discuss Loss of Use Endorsement

A

Loss of Use Endorsement extends coverage for perils other than theft of entire vehicle when denied use of automobile.
Payment is limited to reasonable expenses incurred by the insured to rent a substitute automobile, on a daily limit or for a specified amount. This could be used for a rental, taxi, or public transit.

37
Q

What is the intent of the Legal Liability for Damages to Non-Owned Automobiles Endorsement?

A

To provide legal liability coverage for the insured, their spouses and all drivers listed on the policy who drive, rent or lease other automobiles for a short period of time. Coverage is provided for physical damage only and only when the insured is liable. Insurance is provided for the same perils and deductibles as the insured purchased for their own vehicle, and is intended for private passenger or station wagon type vehicles.

38
Q

Explain Recreational Vehicle Endorsement

A

Provides third party liability for unlicensed vehicles such as snowmobiles, trail bikes, motor scooters, moped etc. Includes coverage for under-aged drivers when operating off public roads.

39
Q

Who would buy the Limited Waiver of Depreciation Endorsement and why?

A

When an insured is the first owner of a new vehicle, this endorsement with waive depreciation for a loss within the first 24 months of the delivery date of the automobile insured. If the their is a total loss the insurer will pay the lower of either the manufacturer’s suggested retail price it was originally purchased for, or the actual purchase price.

40
Q

What does the Family Protection Endorsement do?

A

This endorsement pays the difference between the driver at faults third party liability limit and the insureds claim amount up to the limit of the insured’s third party liability. This endorsement insures the insured and their dependent relatives.

41
Q

Define Coverage Territory

A

Canada and the USA and upon vessels plying between the two and their ports.

42
Q

Occupant defined

A

Any person who drives the automobile or is being carried in or upon or entering into or leaving the automobile.

43
Q

Define: Consent of Insured

A

Any person who uses the insured automobile or is an occupant of that automobile without having obtained the consent of the owner is not entitled to any of the benefits provided by this policy.

44
Q

Describe Exclusion: Garage Personnel

A

There is no coverage under this policy for claims arising out of the use of the insured’s automobile by anyone engaged in the business of selling, repairing, maintaining, storing, servicing or parking automobiles. A separate garage insurance policy can be purchased.

45
Q

Describe Statutory Condition: Prohibited Use by Insured/Others (5 points)

A

Insured and others must not drive or operate vehicle:

  • unless they are authorized and qualified to do so
  • when their driver’s license is suspended
  • under 16 yrs old
  • for illicit or prohibited trade
  • in any race or speed test
46
Q

Where Requirements of Loss or Damage to Persons or Property apply, the insured shall: (4 points)
and shall not: (2points)

A

The insured shall:
-promptly notify the insurer
-verify under oath that the claim is for the insured auto and person insured under the policy
-forward all legal documents to the insurer immediately
-assist the insurer int he defense of the claim
The insured shall not voluntarily assume any liability or settle any claim, or interfere in any negotiations for settlement or legal proceedings.

47
Q

In Requirements where Loss or Damage to the Insured Automobile, the insured shall: (6)

A
  • promptly notify the insurer in writing of the details of the loss
  • at own expense, take reasonable steps to protect from further loss
  • provide insurer with Proof of Loss Form within 90 days
  • agree to be examined under oath and produce all documents relating to the matter
  • be compensated with ACV
  • not abandon the vehicle to the insurer without consent
48
Q

How long does the insurer have to pay the claim after a receipt of proof of loss?

A

60 days

CAIB 1 (9 decks)

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