Short Answer Flashcards

1
Q

Describe the three levels of legal jurisdictions in Canada

A
•	Federal- matter affecting all of Canada 
o	Criminal law
o	Interprovincial trade
o	Telecommunications
o	Customs & Immigration
o	Fisheries
•	Provincial & Territorial- Matters affecting provinces and territories
o	Education
o	Property
o	Health
o	Transportation
o	Auto insurance
•	Municipal- Bylaws dealing with Local Matters
o	Zoning
o	Construction Permits
o	Crosswalk
o	Parking bylaws
o	Speed limits within municipal borders
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2
Q

State why Automobile insurance was created

A

• Automobile insurance has evolved along with society’s mass adoption of cars for transportation
• It evolved to cover the following:
o Physical damage to vehicles and destruction or disappearance of vehicles
o Costs due to injuries or death arising from automobile accidents
o Lawsuits to recover damages from accidents

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3
Q

Explain how laws requiring mandatory automobile coverage led to the evolution of standard automobile policy forms across Canada

A

• Laws in Canada’s various provinces and territories require that all motorists have automobile insurance
• The wording of policy forms and endorsement forms is governed by each province’s and territory’s regulation (except Saskatchewan)
• There are 6 policy forms used in Canada and one extra form used in Alberta only
• They are used for in provinces with private schemes, or for optional insurance in those government schemes
* refer also to chart

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4
Q

Describe what constitutes proof of automobile insurance

A
  • Each Canadian province or territory has mandatory insurance laws, such as Ontario’s Compulsory Automobile Insurance Act
  • Every owner or lessee of a motor vehicle being operated on a public road must have insurance
  • Motor vehicle liability cards are designed to serve as proof of automobile third party liability insurance
  • Most jurisdictions in Canada require physical cards, but there are initiatives to allow electronic cards or “eSlips” ( as in Nova Scotia)
  • Filing proof of financial responsibility is accomplished by an insurer filing a certificate with the Registrar of Motor vehicles showing a policy has been issued in the name of the person involved, and giving a description of the vehicle(s) owned.
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5
Q

Contrast tort versus direct compensation systems to settle automobile insurance claims for damage caused by third parties

A

Tort System- Compensate victims based on the third party’s fault/negligence and provide access to the civil justice system to recover damages
- Onus of proof: is on the motorist who alleges the other is negligent (with exceptions for pedestrians)
- Drivers fault charts: (or similar fault assessment processes) are used to settle common accident types without the courts
Direct compensation Systems- allow people to be compensated by their own insurer for damage caused by a third party
- Access to the civil justice system to recover damages is strictly limited or banned ( insureds cannot claim against third parties or third parties’ insurers)
- Goals: Less investigation, less subrogation, less litigation, speedier settlements, negotiations with own insurer only, and ultimately cost savings and lower premiums

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6
Q

Explain how claims for vehicle damage caused by a third party are compensated under third-party liability coverage

A

• Automobile third party liability insurance covers legal liability for bodily injury or death of any persons or damage to property belonging to other persons arising out of the ownership, use, or operation of an automobile.
o Insured persons: named insured, and anyone who has, drives, or operates the automobile with the insureds consent
o Minimum limits: required in each jurisdiction and priorities of payment apply if insurance amount does not satisfy the claims
• Exclusions:
o Damage to property carried in or upon the automobile
o Damage to other property owned or rented by, or in the care, custody, or control of insured
o Contamination of property being carried
o Nuclear Hazards
o Amounts over the policy limit purchased- other than legal costs and post- judgement interest

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7
Q

Summarize the additional coverage available under third-party liability coverage

A

• Insurer additional coverage agreements
o Pay all costs taxed against insureds and interest judgement amounts within the limits of the policy
o Reimburse the cost of medical aid necessary at the time/scene of the accident
o Investigate, negotiate, and settle claims on behalf of insureds
o Defend insureds and pay the cost of any civil action
o Be liable up to the minimum limits of the province or territory where the accident occurred
o Do not use a defense against a claim that is not available in the province or territory where the accident occurred
o Protected insureds for liability claim against each other, as if a separate policy were issued to each (but only up to the policy limit plus legal costs, and post-judgement interest)
• Responsibilities of insured persons
o Notify the insurer in writing within seven days of loss or damage to persons or property (if incapacitated, as soon as possible)
o Give the insurer a statutory declaration, if requested
o Help the insurer obtain all necessary information and evidence about the incident
o Send everything received in writing about the claim to the insurer
o Refrain from assuming any liability, settling claims, or interfering in legal proceedings/ negotiations
o Reimburse the insurer for any payments made under absolute liability
• Rental vehicles have a specified order of liability:
o Person who rented the auto
o The driver of the auto
o The owner of the auto

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8
Q

State the types of injury claims that could be expected under the liability section of the automobile policy

A

• Pre-1990 Ontario Motorist protection plan (OMPP) claimants could sue for economic and non-economic loss in Ontario
• Non-Economic losses
o Lawsuits subject to a per-person deductible
o Changes to Ontario Automobile insurance legislation (1990, 1994, 1996, 2003, and 2010) have established the verbal threshold system where claimants can sue for non-economic general damages if they suffer
- Permanent serious disfigurement; or
- Permanent impairment of an important physical, mental, or psychological function
• Economic losses
o There is a right to sue without the need to meet a threshold for all types of economic loss
o Recovery from tortfeasors for loss of income and loss of earning capacity (both as determined by regulation) is limited

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9
Q

Explain how absolute liability means the insurer is responsible for paying third party claims even though the insured has breached a policy condition

A

• Absolute liability requires insurers to pay third party claims up to provincial/territorial minimum limits even if insureds have breached a policy condition
• Absolute liability provisions in the provincial/territorial insurance acts mean third parties’ rights to payments are not prejudiced by
o Any assignment, waiver, surrender, cancellation, or discharge of the policy by the insured after the even giving rise to the claim
o Any act or default of the insured before or after the event in violation of the act or the policy
o Any violation of the Criminal Code or statute of any province or territory by the owner or driver of the automobile

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10
Q

Explain how claims for vehicle damage caused by a third party are compensated under direct compensation-property damage coverage

A

• Direct compensation- property damage (DCPD) coverage
o Insureds deal with their own insurers to indemnify them for the cost of repairs, damage to contents carried in the vehicle, and vehicle loss of use to the extent that they are not at fault
o DCPD applies if damage occurs in Ontario, and both vehicles are insured under Ontario auto policies (or where insurers from outside Ontario have signed DCPD agreements)
• Subrogation is limited:
o Insureds can sue negligent parties if they are insured outside of the province, and their insurers do not subscribe to DCPD agreements
o Insurers that pay DCPD claims can subrogate against garage risks, tow trucks, and other insurers for contents losses over $20,000

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11
Q

Identify who is covered under the accident benefits section of the owner’s policy

A

• For Accidents in Ontario with insured/ other automobiles
o Named insured and any person specified in the policy as a driver of the insured automobile
o Spouse of the named insured
o Dependent of the named insured or spouse
o Person who is involved in an accident involving the insured automobile
• For accidents outside Ontario
o Person who is an occupant of the insured automobile and who is a resident of Ontario, or was a resident of Ontario at some point during the 60 days prior to the accident
• For persons not actually involved in accidents
o If they suffer psychological or mental injuries because of an accident that injures certain relatives or dependents
o There is a legislated order of payment for a person who is injured in a car accident in Ontario that is covered by more than one automobile insurance policy

Ontario SABS Priority of Payment
Victims own insurer -> Insurer of the automobile victim was an occupant in-> insurer of any automobile involved in the accident-> Ontario Motor vehicle accident claims fund

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12
Q

Summarize the coverage provided by the accident benefits section of the owner’s policy

A
  • Accident Benefits under Ontario owner’s policies
    o Income replacement benefit- for people who are disabled from an accident and can’t work and were working at the time of loss/ or sufficiently prior to the loss, subject to seven day deductible maximum limits
    o Non-Earner Benefit- Subject to four week waiting period and maximum limits; payable to insureds who suffer inability for normal life and
     Do not qualify for an income replacement benefit
     Cease to receive a caregiver benefit because there is no longer a person in need of care
     Were enrolled on a full-time basis in elementary, secondary, post-secondary, or continuing education at the time of the accident or had completed it less than one year prior and not yet working in their field
    o Caregiver Benefit- Paid to persons who were primary caregivers of others (and not paid for that role) who suffer catastrophic impairment in an accident, Subject to maximum limits.
     Can be extended for non-cat impairments for additional premium
    o Medical, rehabilitation and attendant care benefits- benefits have an aggregate total for the amount paid (depending on cat or non cat impairment)
     Medical benefit – pays for all reasonable and necessary medical expenses that are not payable under another insurance plan or law; minor injuries subject to minor injury guideline
     Rehab benefit- pays for reasonable measures to reduce or eliminate the effects of any disability resulting from the impairment
     Attendant care benefit- for payment of all reasonable expenses incurred by or on behalf of an insured person for services provided by an aide or attendant or a long term care facility including a nursing home, home for the aged or chronic-care hospital
    o Payment of other expenses – covers certain other expenses, including educational expenses, expenses of visitors; housekeeping and home maintenance expenses; damage to clothing, glasses, hearing aids, and other devices, cost of examination
    o Death and funeral benefit- Pay lump sums on the death of the insured, insureds spouse or dependents, also pays $6000 for funeral cost, option to increase to $8000
    o Optional benefits- increased limits to the various accident benefit and annual indexation of benefit and limits based on the CPI
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13
Q

Identify the exclusions under the accident benefits section of the owner’s policy

A
  • Excluded person under income replacement or non-earner benefits, educational expenses, expenses of visitors and housekeeping and home maintenance expenses
    o Person convicted of impaired driving or failing to provide breath sample
    o Drivers who knew or ought to have known that they were operating an uninsured automobile
    o Persons driving the automobile without a valid driver’s license
    o Drivers who are excluded under the policy
    o Drivers operating the automobile at the time of the accident without the owner’s consent
  • Excluded persons under all accident benefits
    o Any person who has made, or who knows of, a material misrepresentation or who intentionally failed to notify the insurer of a change in the risk material to the contract
    o An occupant of an automobile who knew or ought reasonably to have known that the driver was operating the automobile without owner’s consent
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14
Q

Describe how the Statutory accident benefits schedule (SABS) interacts with the other systems when Ontario Residents are involved in an automobile accident outside Ontario or Eligible for payments under other benefit plans

A
  • Accidents outside Ontario
    o Ontario residents injured in accidents outside Ontario (anywhere in Canada or the united states or a vessel travelling between these countries) can choose between Ontario level of benefits and the no-fault benefits available where the accident occurred
  • Social assistance payments
    o Automobile insurers are the first payer of benefits to an insured person who is also entitled to receive social assistance payments
  • Collateral benefits
    o Sources of entitlement outside the automobile policy including employer plans income continuation plans and others
    o Insurer may deduct certain amounts in calculating the amount of weekly income replacement or non-earner benefit payable to an insured person
    o Insures are required to top up the loss of income paid by these sources to 70 percent of gross income to a maximum top up of $400 per week
  • Workers compensation- insurer is not required to pay benefits to a person who is entitled to workers compensation
    o An employee injured in the course of operating an automobile has a legal right to take action against the party responsible for the accident
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15
Q

Identify indicators of accident benefits fraud associated with injury claims

A
  • Fraud rings
    o Auto collisions typically happen between two vehicles, producing many claimants who may be eligible for accident benefits
    o Claimants may also be involved in multiple accidents and in different vehicles (rental vehicles, for example, claim benefits simultaneously form several insurers and use various names)
    o Witnesses for certain claims may appear on many claims’ reports
  • Planned accidents
    o Accident are typically staged at night, behind buildings or in area where there are no witnesses.
    o The vehicle (often an older rental vehicle) may be driven into a wall at a low speed, typically causing less than $500 damage
    o Phony claimants are referred to clinics for treatment (that they do not need or receive) accident benefits forms are then submitted to the insurers after a few weeks of extensive treatment; the goal is to obtain cash settlement from the insurer
  • Rehabilitation and medical service providers
    o Fraud includes overbilling, collusion with patients to increase insurance payments, operating illegal referral schemes and paying fees to third parties for referring patients
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16
Q

Outline the coverage provided by the owner’s policy for accidents caused by uninsured or unidentified motorists

A
  • Uninsured auto coverage
    o Insureds can recover from their own insurer for damages arising from accidents caused by
     Uninsured auto- neither the owner nor the driver has liability insurance
     Unidentified auto- the owner or driver cannot be determined
    o Insureds must be legally entitled to recover from the uninsured or unidentified motorist
    o Section 5 covers damage and loss of use of the auto and or damage to contents that insureds have a legal right to recover from the identified owner or driver of an uninsured auto subject to $300 ded and $25,000 max limit
  • Insured persons
    o For death or bodily injury- the insured, the insureds spouse, and any dependent relative of either when occupants in uninsured auto or if struck by uninsured/unidentified auto (with limitations)
    o For property damage- the owner of the automobile, the owner of contents damaged
  • Claims
    o Insured policy must comply with explicit policy requirements for claims that differ somewhat between bodily injury or death and property damage claims and if the third party is unidentified or uninsured
  • Limitation and exclusions
    o Impact how much the insurer will pay for uninsured auto coverage claims
    o Limit payments in cases where insureds can recover from other parts of the policy, other insurance policies or unsatisfied judgement funds
    o No coverage for losses due to radioactive material or where car is driven by excluded driver
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17
Q

Describe how the family protection endorsement provides coverage for damage caused by inadequately insured motorists

A
  • Inadequate insurance
    o At fault motorist is insured and identified, but carries a limit of 3rd party liability insurance that is less than the value of a judgment awarded against him or her
  • Family protection endorsement
    o An optional coverage available in Ontario and other provinces that insureds can purchase to protect against situations involving underinsurance
    o Covers the difference between the value of the insureds claims and the 3rd party limit of liability insurance
  • Insured persons under family protection endorsement
    o Named insureds and their spouses and dependents who are occupants of insured cars, occupants of other cars ( not leasing), pedestrians struck by cars
    o Officers, employees, or partners for whose regular use the described auto is provided or the dependent spouses or relatives of officers, employees, or partners when occupants of insured cars occupants of other cars (not leasing) or pedestrians struck by cars
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18
Q

Describe how motor vehicle accident claims funds are “payers of last resort” for people injured in automobile accidents with no other existing automobile insurance to pay their claim

A
  • Motor vehicle accident claims fund ( MVACF)
    o Set up in most Canadian jurisdictions to ensure that innocent victims of accidents by uninsured automobiles are compensated
    o May also be called uninsured auto funds or unsatisfied judgement funds, and were historically called highway victims indemnity funds
    o Some funds cover bodily injury only
     Others also cover property damage, subject to a deductible, if the owner or driver of the car responsible for causing the loss is identified
    o Payments from the MVACF are based on the extent of the uninsured driver’s legal liability. If the claimant is at fault the fund does not pay
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19
Q

Outline the options available for insuring loss of or damage to the insured’s automobile

A
  • In Ontario, coverage is offered under Section 7- Loss or Damage Coverages under the owner’s policy (OAP 1). There are four subsections of coverage:
    a) Specified Perils- Covers losses from the following:
    • Fire
    • Theft or attempted theft
    • Lightening
    • Windstorm, hail, or rising water
    • Earthquake
    • Explosion
    • Riot or civil disturbance
    • Falling or forced landing of aircraft or of parts thereof
    • The stranding, sinking, burning, derailment, or collision of any conveyance in or upon which a described automobile is being carried on land or water
    b) Comprehensive- Protects an insured automobile against all perils other than collision or upset including the following:
    • Perils listed under specified perils
    • Falling or flying objects
    • Missiles (including windshield claims caused by stone chips)
    • Vandalism
    c) Collision or upset- covers damage to the vehicle caused by collision with another vehicle, person, object, or the surface of the road, or by upset. It is usually sold in combination with comprehensive coverage.
    • But collision with an animal is typically a comprehensive claim
    d) All Perils- combines collision or upset coverage and comprehensive coverage and covers certain types of automobile theft that are excluded under comprehensive.
    • Theft by a person residing in the insured’s household
    • Theft of the vehicle if stolen by an employee who drives or uses, services, or repairs the described automobile
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20
Q

State the exclusions under loss of damage coverages of the owner’s policy

A

• Exclusions under loss or damage coverages
o Damage usually associated with the general wear and tear or lack of maintenance of a vehicle
o Damage caused by theft of the vehicle by any person who is in lawful possession of the automobile
o Damage caused by the voluntary parting with title of ownership
o Damage directly or indirectly caused by contamination by radioactive material
o Damage to contents of trailers or to personal effects
o Damage to media and equipment for use with a sound system
o Damage to the insured automobile when the insured drives or operates it while impaired by alcohol or drugs to such an extent as to be incapable of the proper control of the automobile, or while in a condition for which he or she is convicted of an offence under the Criminal Code of Canada
o Under Comprehensive and specified perils coverages only, loss or damage caused by theft by any person or persons living in the same dwelling premises as the insured or by any employee of the insured engaged in the operation, maintenance, or repair of the automobile
• These perils are considered uninsurable, better insured elsewhere, or that might cause insureds to be careless if covered

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21
Q

Explain how deductibles affect coverage and premiums for loss or damage coverages

A

• Deductible
o An agreed specified amount that the insured must pay in the event of a loss before the insurance company will cover the rest of the claim
o The insured selects the deductible amounts at the time of application for insurance
o Insureds can select different deductibles under the various types of loss or damage coverage
 Higher deductibles come with lower premiums, and lower deductibles comes with higher premiums
o Each occurrence giving rise to a claim is subject to a deductible, except in the case of fire or lightning, in which case no deductible applies
o A deductible may also be selected under DCPD coverage, but it is optional and many insureds choose not to have one

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22
Q

Outline the additional benefits under loss or damage coverages

A

• Additional benefits
o Payment of charges
 General average charges
 Salvage charges
 Fire Department charges
 Canadian or US customs duties for which one is legally responsible as a result of an insured peril
• Forgoing right to recover- insurer agrees to waive this right in certain circumstances (except against garage risks or people violating policy conditions or illegal use)
• Coverage for temporary substitute automobiles- Used by an insured because the described automobile is out of service because of breakdown, repairs, serving, theft, sale, or destruction
• Coverage for loss the use due to theft- 72 hour waiting period, up to $900 paid for transportation replacement when entire auto stolen and policy covers theft

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23
Q

Outline the agreements of insureds under loss or damage coverages

A

• Agreements of insureds
o Notifying their insurer in writing within seven days of the incident
o Doing as much as is reasonably possible to protect the automobile from further damage
o Making no repairs beyond those needed for protection of the automobile without their insurer’s written consent; allowing their insurer to copy all documents
o Permitting their insurer to inspect the automobile at any reasonable time
o Completing a statutory declaration within 90 days of the incident, if requested
o Not abandoning the automobile with their insurer unless it agrees to accept it

24
Q

Describe how fraudulent claims arise from leased and phantom vehicles, theft rings, staged accidents, and arson

A

• Fraudulent automobiles loss or damage claims happen when unscrupulous owners burn their cars or otherwise make them disappear to collect insurance money
• Fraudulent claims are also made in sophisticated schemes run by organized crime rings
• Common sources of fraudulent automobile claims include the following:
o Planned theft of leased vehicles
o Phantom vehicles
o Auto theft rings
o Vehicular arson
o Staged accidents
• CANATICS- Canadian National Insurance Crimes Services
o Is a major initiative to use data analytics to combat automobile insurance fraud by identifying suspicious claims activity and providing alerts to CANATICS member insurance companies

25
Q

Explain the purpose of automobile insurance applications

A

• Application forms
o Contain the information needed to
 Underwrite
 Rate
 Issue the policy
o Must be approved by the provincial or territorial insurance regulator and are standard within a given jurisdiction
• Misrepresentation on an automobile insurance application
o If a signed application is received by an insurer, the information in the application may be used to establish the misrepresentation
o If the application was oral, proving an alleged misrepresentation is more difficult
• Issuing a policy different than the application
o The insurer must point out to the insured, in writing, in what ways the policy differs from the application
o If the insured does not object to the changes by advising the insurer in writing within seven days, the policy is deemed to cover as it is written

26
Q

Outline the information requested in an automobile insurance application for an owner’s policy and comment on how it is used by the insurer

A
  • Applicant’s name
  • Policy period
  • Described automobile- including liens, mods, unrepaired damage, annual km’s, commute, registered/ actual owner
  • Driver information- age, gender, DL#, DT, Retiree, past license, and ins experience
  • Previous accidents and insurance claims- for applicant and listed drivers for past six years
  • Convictions- for all drivers for past 3 years
  • Rating information- Used to calculate premium
  • Insurance coverages applied for- also includes endorsements requested
  • Remarks- additional details for Section 1-6
  • Methods of payment- application also states there is a minimum retained premium
  • Declaration of applicant- Applicants must sign the application and warrant they qualify for drivers license, among other things
  • Report of broker/ agent- including signature of broker
27
Q

Differentiate between head office and individual underwriting by explaining the functions of each

A
  • Underwriting- Scrutinizing a risk and then deciding on its eligibility for insurance
  • Head office underwriting- management establishes a marketing philosophy and creates underwriting and rate manuals and operation systems to attract and classify profitable business
  • Individual underwriting- includes risk selection and rating to calculate premium
  • Government automobile insurers- Influenced by the mandate to provide insurance to “all persons” and usual function of underwriting of declining risks is illegal
28
Q

Explain the criteria used in automobile rating

A

• Commonly used rating factors
o Age, gender, and marital status- prohibited in some jurisdictions and considered discriminatory by some
o Driving experience- numbers of years licensed, driver training courses
o Driving record- number of accidents (Past 6 years) or traffic violations (past 3 years)
o Other regular drivers
o Territory and distance driven annually- amount of time and where vehicle driven
o Vehicle usage- purpose the vehicle is used for, including personal, business, or commercial use
o Vehicle description- year, make, model, and VIN
o Coverage- More extensive coverage for damage resulting from more perils will result in higher premiums

29
Q

Describe the process of automobile ratemaking

A

• Law of large numbers- degree of uncertainty is reduced as the number of events increases and this can assist actuaries to establish rates coverages
• Components of automobile insurance rates
o 1. Pure premium- the amount required to pay only the anticipated losses
o 2. Expense loading- the amount added to the pure premium, which includes the following
 Acquisition costs- commission and cost of the insurer’s sales structure
 Processing and servicing costs- administration
 Taxes- federal, provincial/ territorial, and municipal
 Contingencies- catastrophes, extra-large losses, and reinsurance costs
 Profit
• Statistical body and data collection
o All private automobile insurers who write business in Canada must record and file automobile experience data; General insurance statistical agency (GISA)
• Components of loss costs
o Paid losses- known amounts
o Outstanding losses- provision for claims that are reported but not yet paid; usually referred to as estimates in claim files
o Incurred but not reported (IBNR) losses- liability for future payments on losses that have occurred but have not yet been reported to the insurer
• Trending
o Current loss costs x development trend factor= projected loss costs
• Vehicle Rate Group
o Rate group is a numerical value assigned to a vehicle based on its expected claims costs
o In the past, rate groups were calculated using the manufacturer’s suggested retail price
o Insurers now use the Canadian loss experience automobile rating (CLEAR) system, which classifies car using historical claims data, including collision, comprehensive, direct compensation-property damage, and accident benefits coverages
• Final premiums
o Expense loadings (using differentials) are added to projected loss costs (pure premium). Use insurer investment income to modify premiums is monitored by regulators

30
Q

Comment on the extent of government control of automobile insurance rates across Canada

A

• Rate boards- set up by some provincial governments to control automobile insurance rates
• Types of rate control
o Prior approval- companies file their proposed rates and must wait for approval before using them
o File and use- Companies files proposed rates and use them as proposed, but may face inquiries by the board
o File and use following an adjudication period- companies file their proposed rates and the law allows a period of time, such as 30-60 days, during which the board can challenge them. Following this period, the company can use the unchallenged rates as they are then deemed to be approved
o Prior setting of rates by the board with variations from “benchmark”- the board sets the rates, and these are known as the benchmark. Insurers can use the benchmark rates or vary them, based on a board-approved percentage. If an insurer wishes to deviate up or down from the benchmark, or vary the classes or other rating factors, a board hearing is usually required- this may take the form of a public hearing. The board then allows, disallows, or varies the application

31
Q

Outline the main provisions of the automobile statutory conditions

A

• Statutory Conditions
o Definitions, rules, and regulations that govern every automobile insurance policy
o Called mandatory conditions in Nova Scotia , prescribed conditions in British Columbia, and general conditions in Quebec
o Must be a part of every automobile insurance contract (extension policies in government-insurance provinces)
• Material change in risk- insured must notify the insurer of any change that may lead the insurer to charge a different premium because the exposure has changed
• Incorrect classification, premium overpayment- if there is an overpayment of premium due to incorrect classification, the insurer must refund it with interest; if there is underpayment, insurer can seek additional premium from insured if the error is caught within 60 days of policy issue with no interest.
• Monthly payments- insured can pay premium in equal monthly installments, without penalty but with interest (rate is regulated)
• Authority to drive and prohibited use- no coverage if insureds/others drive or operate the automobile in the following circumstances
o They are not authorized to drive (have no Drivers license or have suspended or expired license)
o They are not qualified to drive (do not know how to drive or do not have the proper license class to operate the automobile)
o They are below the minimum licensing age
o They are engaging in any illicit or prohibited trade or transportation
o They are in any race or speed test
• Requirements where loss or damage to persons or property
o Promptly notify insurer of any accidents or resulting claims
o Verify claim arose from the operation of insured automobile and responsible party is insured
o Forward immediately to the insurer all writs, claims, correspondence and so on
o Do not assume or admit liability
o Do not interfere with claims proceedings
o Aid in securing information/evidence/witness, and cooperate in the defense of any actions• Requirements where loss or damage to the automobile
o Give prompt notice of loss, protect the auto from further loss, and submit a proof of loss within 90 days
o Make no repairs (expect to prevent further loss) nor remove evidence of damage without insurer’s written consent, a reasonable time for the insurer to examine the automobile has passed.
o Give an examination under oath and present all documents about the loss at the insurer’s request
o The insurers maximum limit of liability is the least of the actual cash value (ACV) of the automobile or the cost to repair or replace with like, kind, and quality (LKQ)
o If insurer chooses to repair, rebuild or replace
 Written notice of this intention is given to the insured within 7 days of receiving proof of loss
 Repairs or replacement must be of like, kind and quality
 Repairs or replacement must be done within a reasonable time
o No abandonment of the automobile without the insurers consent even if it is a total loss; salvage if any, vests in the insurer
• Time limit- insured must notify insurer of loss or damage within 7 days of the incident; deadline may be extended if insureds are unable to meet this deadline due to incapacity
• Inspection of automobile- insurer has the right to inspect the automobile and its equipment at all reasonable times
• Time and manner of payment of insurance money
o Insurer will any loss within 60 days of receiving proof of loss; or 15 days after the award by appraisers
o If the insurer refuses to pay a claim, it shall promptly inform the insured in writing of the reasons
o If disagreement on the nature, extent, or adequacy of repairs/rebuilding/replacement parts or the amount payable for the loss or damage, it will be resolved by appraisal process
o Insured must comply with the statutory conditions of requirements where loss or damage to persons or property and requirements where loss or damage to automobile and the amount of loss must have been determined
o Every action or proceeding against the insurer for loss or damage to the automobile or its contents must be commenced within one year of the loss occurring and for loss or damage to persons or property must be commenced within two years after the cause of action
• Who may give notice and proofs of claim
o The agent of the insured- the insureds inability to give notice or proof must be explained
o A person whom any part of the insurance money is payable- the inability of the insured to give notice or proof must be explained or shown that the insured refused to give notice or proof of loss
• Termination
o The insurer may terminate the policy by doing either of the following
 Giving 15 days written notice by registered mail. The 15 days notice period begins the day following receipt of the letter at the post office to which the registered letter is addressed
 Giving 5 days written notice if handed delivered. A receipt as proof of delivery should be obtained
o The insured may terminate the contract at any time by making a request
• Notice- if insurer wishes to give formal and proper notice to the insured, however, these provisions must be strictly followed
• Statutory accident benefits protected- an insured is entitled to some, but not all, statutory accident benefits if the insured contravenes certain statutory conditions

32
Q

Summarize the content of each of the general provisions, definitions, and exclusions

A

• Standard policy forms (such as Ontario’s owner’s policy) contain a number of general provisions, which consist of rules, definitions, and exclusions that apply to all parts of the policy, unless stated otherwise
• Territory
o Policy applies for automobile operated, used, stored, or parked within Canada & the states, any other jurisdiction designed in the statutory accident benefits schedule and on a vessel travelling between ports of those countries
o Dollar limit described in the policy are in Canadian funds
• Occupant defined
o A person, including the driver, in or on an automobile or getting into, on, out of, or off an automobile
• Automobile Defined
o Defines automobiles covered by the policy
 Described automobile
 Newly acquired automobiles
 Temporary substitute automobiles (TSA)
 Other automobiles or borrowed automobiles
 Trailers
• Two or more automobiles insured
o When a policy covers two or more automobiles, each is treated as if insured by a separate policy for claims resulting from its use or operation
o When insureds has two or more automobiles insured by separate policies, accidents with temporary substitute automobiles are pro-rated between them
• Trailers and towing
o An automobile pulling one or more trailers will be treated as a single automobile for third-party liability, accident benefits, and uninsured automobiles coverages
o Trailers are treated as separate automobiles for determining the deductible, DCPD payments, and loss or damage coverage payments
• Inspection
o The automobile may be inspected at any reasonable time
• General exclusions
o Excluded uses
 Expect for certain AB coverage, there is no coverage under this policy if the automobile is used
• To carry explosives or radioactive material
• As a taxicab, bus, a sightseeing conveyance, or to carry paying passengers
• Excluded drivers and driving without permission
o Except for certain AB coverage, there is no coverage (including coverage for occupants) under the owners policy for automobiles
 Being used or operated by a person without the owners consent
 Being driven by a person named as an excluded driver of the automobile
• Rented or leased automobiles
o Expect for certain accident benefits coverage, there is no coverage under this policy if the automobile is rented or leased to another
• Garage workers
o No person who sells, repairs, maintains, stores, services, or parks automobiles as part of a business (plus workers in other garage risks) is covered by this policy while involved in conducting that business
• War risks
o Insurers are not liable under any coverages except third-party liability for any loss, damage, injury, or death caused by war activities
o This includes bombardment, invasion, civil war, insurrection, rebellion, revolution, coup, or actions of armed forces while engaged in war, whether declared or not

33
Q

Explain the risk exposures arising from automobile and transportation sharing

A

• Ridesharing- an arrangement set up by means of a website or mobile app in which a passenger travels in a private vehicle driven by its 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. Sometimes called vehicle sharing or peer-to-peer car rental services
• Transportation network companies (TNC)- Online-enabled application or system to facilitate ridesharing services
• Commercial use excluded under the owner’s policy
o Canadian owners policies generally exclude using personal vehicles for commercial purposes including carrying passengers for a fee in ridesharing. Exclusions can apply to
 Third-party injury and property damage claims
 Own vehicle damage
 Accident benefits or personal injury claims
o See “Three commercial periods in ridesharing”
Refer to table***

• Insurance for ridesharing
o Insurers and regulators have been working to develop solutions to the growing risk of uninsured drivers to meet the following goals
 A rating structure that charges rideshare drivers a fair rate based on their use
 Premiums that cover claims so that personal-use policyholders do not subsidize ridesharing drivers
 Market availability for ridesharing drivers
 Premiums that are reasonably affordable
 Ontario
o While the vehicle is driven for personal purposes, the owners policy will respond to a claim that driver is operating for the ridesharing app, the TNC fleet policy will respond
o Some insurers have ridesharing endorsements, but they are not standalone and require the driver to be insured with a specific insurer (that offers the endorsement)
o Ridesharing endorsement extend all policy coverages under the owners policy while the vehicle is operated for ridesharing
 Alberta
o TNC is responsible for insuring its drivers
o Alberta Treasury Board and Finance approved a new standard automobile policy form, the Standard Automobile Form- Transportation Networks (SPF 9)
 Quebec
o Quebec took the approach that ridesharing is essentially a taxi service
o Ridesharing drivers will be required to obtain a taxi class drivers license, a taxi permit, and commercial insurance in order to operate in the province
 Manitoba
o Rideshare companies and drivers must have municipal authorization and meet provincial and municipal requirements
o Drivers can operate their vehicle with a regular passenger vehicle and light truck (Class 5) drivers license and regular passenger vehicle license plates
 Saskatchewan
o Rideshare companies and drivers must have municipal authorization and meet provincial and municipal requirements
o Drivers have the option of using a commercial class license (Class 1 to 4) or a Class 5 license
 Insurance for carsharing
o Under the owners policy, an exclusion says that except for certain accident benefits coverage there is no coverage under the policy if the automobiles is rented or leased to another
 But some insurers permit this use and have coverage for it
o Many carsharing services provide insurance to car owners to fill coverage gaps. This commercial insurance provides coverage for the vehicle while it is being delivered and during the rental period

34
Q

State the purpose of automobile insurance endorsements

A

• An endorsement is an amendment to a policy that changes the terms and conditions of the policy
• Endorsements override any policy provisions that contradict them, unless the endorsement states otherwise
• The following common situations require endorsements to amend the owner’s policy
o Automobile storage
o Automobile value changes
o Underinsured motorists
o Loss of use
o Driving of non-owned automobiles
o Protecting those with a financial interest, such as a lessor or lienholder

35
Q

Describe the endorsements commonly used with the owner’s policy to provide permission and coverage for otherwise prohibited uses of the insured automobile

A

• Permission for otherwise excluded uses of automobile (OPCF 4 series in Ontario, QEF 4 series in Quebec, and SEF 4 series in other provinces and territories)- allows otherwise excluded uses of the automobile
o Permission to carry explosives; grants permission is to carry specific types of explosives, and coverage is granted for specific sections of the policy while the explosives are being carried
o Permission to carry radioactive material; grants permission to carry radioactive materials
• Rented or leased automobiles (OPCF 5 series in Ontario, QEF 5 series in Quebec, and SEF 5 series in other provinces and territories)
o Amend the policy conditions granting permission for the automobile to be leased on a long-term basis
• Conversion (OPCF 5D in Ontario, QEF 5D in Quebec, and SEF 5D in other provinces and territories)
o Amends the owners policy exclusion of loss or damage resulting from an illegal disposal or theft of the automobile by anyone who has legal possession of it under a written agreement (a mortgage conditional sale, lease or other similar agreement)
o Changes it to specify that it excludes loss or damage resulting from “a written agreement (a mortgage, conditional sale or similar agreement) except a lease”
• Passenger risks (OPCF 6 series in Ontario, SEF 6 series in other provinces and territories)
o Endorsements are available to provide coverage for particular kinds of passenger risks
 Taxis, private buses, carpooling arrangements
 School buses
 Public transportation
 Driver training schools
o Most passenger risks endorsements are not offered in Quebec, where bodily injury exposes are covered by the Société de l ’assurance automobile du Quebec (SAAQ) or in other provinces with government insurers

36
Q

Describe the endorsements commonly used with the owner’s policy to restrict or exclude coverage

A

• Marine use excluded (amphibious vehicles) (OPCF 9 in Ontario, QEF 9 in Quebec, and SEF 9 in other provinces and territories)
o Amphibious vehicles are insured for the automobile part of the risk under an owners policy
o The water risk is insurable under another form of policy
• Restricting glass coverage (OPCF 13C in Ontario, QEF 13C in Quebec and SEF 13D in other provinces and territories)
o Used to limit glass cover under comprehensive to specified perils that do not include damage caused by gravel and stones
• Suspension of coverage (OPCF 16 in Ontario, QEF 16 in Quebec, and SEF 16 in other provinces and territories)
o Suspends coverage for use or operation of the described, newly acquired, and temporary substitute automobile
• Reinstatement of coverage (OPCF 17 in Ontario, QEF 17 in Quebec, and SEF 17 in other provinces and territories)
o Reinstates the regular coverages so car can be driven on the road again
• Amount Paid
o limiting the amount paid for loss or damage coverages (OPCF 19 in Ontario, QEF 19 in Quebec, and SEF 19 in other provinces and territories)
 Limits the settlement on an automobile, specifically when the actual cash value (ACV) exceeds the rating values used in automobile rating manuals
• Example- older car with extensive modifications that cost more than the car itself and endorsement limits payment to ACV of car before the modifications
o Agreed Value of Automobiles (OPCF 19A in Ontario, SEF 19A in other provinces and territories, not available in Quebec)
 Used when vehicles (or their attached equipment) are valued greater than their ACV; this endorsement would override and enhance the statutory condition insurer liable for cash value of automobile
• Example- classic car that is used for shows and has an appraised value far higher than the ACV, and owner wants to insure it for the higher value
• Excluding, reducing, or increasing coverage for named persons
o Reducing coverage for named persons (OPCF 28 in Ontario, QEF 28 in Quebec, SEF 28 in other provinces and territories)
 Restricts the amount of coverage when certain individuals are operating the vehicle
o Excluded driver (OPCF 28A in Ontario, SEF 28 in other provinces and territories)
 Used to exclude all coverage for named drivers, except for some legislated accident benefits coverage
o Additional coverage for named persons (OPCF 29 in Ontario, QEF 29 in Quebec, SEF 29 in other provinces and territories)
 Used to provide additional coverage for specified drivers

37
Q

Describe the endorsements commonly used with the owner’s policy to extend coverage

A

• Drive other automobiles (OPCF 2 in Ontario, QEF 2 in Quebec, and SEF 2 in other provinces and territories)
o Expands the definition of insured person for the purpose of third-party liability when operating a non-owned or other automobile to allow drivers that are listed on the endorsement to be covered
• Government-owned automobiles (OPCF 3 in Ontario, QEF 3 in Quebec, and SEF 3 in other provinces and territories)
o Provides a form of non-owned coverage for particular circumstances when the insured drives government automobiles and the insured is negligent (or the insured’s driver)
• Property damage reimbursement (OPCF 8 series in Ontario, QEF 8 series in Quebec, and SEF 8 series in other provinces and territories)
o The insured agrees to reimburse the insurer for the sum stated in the endorsement, or the amount of the loss, whichever is less, for property damage losses under third-party liability coverage
• Coverage for transportation replacement (OPCF 20 in Ontario, QEF 20 in Quebec, and SEF 20 in other provinces and territories)
o Covers the loss of use of the insured automobile due to any perils covered by the physical damage section of the policy (including the cost of renting a replacement car, taking taxis or public transit)
• Liability for damage to non-owned and providing other coverages when insured persons drive other automobile (OPCF 27 in Ontario, QEF 27A in Quebec, and SEF 27A in other provinces and territories)
o Provides legal protection for physical damage to a non-owned automobile
o Extends liability insurance from the normal named insured and spouse offered under the basic policy wording to those individuals listed on this endorsement
• Coverage for emergency road service (OPCF 35 in Ontario, QEF 33 in Quebec, and SEF 35 in other provinces and territories)
o Provides limited coverage if the insured automobile is disabled and requires emergency road service
• Removing depreciation deduction (OPCF 43 in Ontario, QEF 43 in Quebec, and SEF 43R in other provinces and territories)
o Insurer waives the application of depreciation for the repair or total loss of the insured vehicle should it be damaged by an insured peril (for partial losses, no depreciation is applied to the replacement cost of parts)
o The waiver applies for a specified time after purchase, when the vehicle is purchased new, and the insured is the original owner
• Family protection (OPCF 44R in Ontario, SEF 44 in other provinces and territories, not available in Quebec)
o Covers the difference between the value of the insured’s claims and the third party’s limit of liability insurance when the third party is at fault but is inadequately insured or uninsured

• Added coverage to offset tort deductible (OPCF 48 )
o Reduces the deductible that applies to a claim payment for a bodily injury liability lawsuit for non-economic loss
o Available in Ontario only

38
Q

Describe the endorsements commonly used with the owner’s policy to alter policy terms

A

• Lienholders and mortgagees (OPCF 23 in Ontario, QEF 23 in Quebec, and SEF 23 in other provinces and territories)
o Option A: Lienholder protection endorsement
 Provide for payment for loss/damage directly to lienholder/mortgage
 Insurer will notify lienholder/mortgagee directly if policy cancelled
 Copy of endorsement given to lienholder/mortgagee as proof of coverage
o Option B: Mortgage endorsement
 Broader coverage than Option A and additional premium charged
 Provides protection for mortgage if insured breaches policy condition/misrepresents/commits fraud
 Additional requirements for mortgagee
• Alterations (changes) (OPCF 25A in Ontario, QEF 25 in Quebec, and SEF 25 in other provinces and territories)- used to make the following changes
o Change of name or address of insured
o Substitution of automobile
o Addition of automobile
o Deletion of automobile
o Change in coverage or limits
o Addition of coverage
o Deletion of coverage
o Change in rating classification
• Motorized recreational vehicles (OPCF 32 in Ontario, QEF 32 in Quebec, and SEF 32 in other provinces and territories)
o Waives compliance with the statutory condition pertaining to qualification and age of the operator of the vehicle while it is being operated off the public highway
• Fire Deductible (OPCF 40 in Ontario, QEF 40 in Quebec, and SEF 40 in other provinces and territories)
o Extends the deductible under all perils, comprehensive or specified perils to losses caused by fire
• Agreement not to rely on SABS priority of payment rules (OPCF 47 in Ontario only)
o Attached to a policy where persons are entitled to receive optional statutory accident benefits in Ontario
o Allows these people to claim statutory accident benefits under this policy including the optional AB provided by this policy, provided they do not make a claim for AB under another policy

39
Q

Outline the function of a driver’s automobile policy

A
  • Provides coverage when a person drives a vehicle that belongs to another and does not have automobile insurance under the owner’s policy to extend coverage to “other automobiles”
  • Most frequent use is providing proof of financial responsibility to obtain a drivers license for commercial purposes and comply with financial responsibility laws
40
Q

State how each of the following impacts insurance in Canada: Insurance companies Act, provincial and territorial insurance acts, provincial and territorial highway traffic acts or motor vehicle acts, and any regulations made to accompany an act

A

 Insurance companies act
o Deals with federal licensing and supervision of insurance companies and solvency standards for insurers; enforced through the office of the superintendent of financial institutions ( OSFI)
 Provincial and territorial insurance acts
o Deal with licensing of private insurance companies, brokers and agents and adjusters
o Set out basic provisions of life, accident and sickness, automobile and some hail insurance policies and prescribes statutory conditions
o Prescribe general rules for all policies
 Provincial and territorial highway traffic acts
o Deal with registration and licensing of motor vehicles, licensing of drivers, and traffic control of vehicles on highways
o Set out requirements of proof of financial responsibility and safety responsibility
 Regulations
o Prescribe the detail that gives shape and life to the statutory concept of modern statutes

41
Q

List the major areas in which consumers protection legislation has been affected and briefly explain the main provisions in each case

A

 Ontario’s insurance regulatory authority
o Automobile insurance falls under the jurisdiction of provincial and territorial governments
o In Ontario, it has been under the jurisdiction of the financial services commission of Ontario ( FSCO) but it is transitioning to the new Financial services regulatory authority of Ontario (FSRA)
 Consumer protection under Ontario’s insurance Act
o This act prescribes the information to be given to applicants and insureds, which is part of the application for automobile insurance
 Examples of unfair or deceptive acts and practices and misconduct
o Committing prohibited acts
o Discriminating unfairly between individuals in same class
o Discriminating unfairly between risks of essentially the same physical hazards and same rating territory
o Misrepresenting the terms, benefits, or advantages of an insurance policy or contract in any illustration, circular, memorandum, or statement
o Making false or misleading statement about terms, benefits, or advantages of an insurance contract or policy
o Making incomplete comparisons of any insurance policies or contracts from different insurers to induce an insured to lapse, forfeit, or surrender a policy or contract
o Making (or offering) any payment, allowance, or gift to induce to any prospective insured to buy insurance
o Charging a premium allowance or fee (other than as stipulated) in an insurance contract upon which a sales commission is payable
o Causing unreasonable delay or resistance to the fair adjustment and settlement of claims
o Making the issuing or amending of an automobile insurance policy conditional upon the purchase of another insurance policy
o Misclassifying the person or vehicle under the insurers risk classification and rating system for determining the premium for an automobile policy
o Using a document instead of a form approved for use by the superintendent (unless no deviations in the document from the approved form affect the substance or are calculated to mislead)
o Conducting any examination under oath that does not comply with the requirements under the insurance act or the regulations
 The RIBO act prohibits similar unfair or deceptive practices for RIBO- Licensed brokers
 Insurance policy cancellation and refusal to renew
o Insurance Act (section 238) gives the superintendent specific authority when it comes to the cancellation or refusal to renew insurance policies, including
 Overseeing requirements for an insurer to decline to issue, terminate, or refuse to renew an automobile insurance policy
 Overseeing grounds for insurers to decline to issue, terminate, or refuse to renew a contract of auto insurance
 Non- renewal procedures
o Policy cannot be simply lapsed
o Proper notice must be given to an insured or the policy must be placed with another insurer
o The insurance act (Section 236) is very explicit
o Failure to follow prescribed procedures could have grave consequences for the broker and the insurer

42
Q

Explain how the Facility Association operates to make insurance available to licensed drivers who may have difficulty obtaining insurance in the regular market

A

• Facility Association
o An entity established by the Canadian auto insurance industry
o It provides auto insurance to owners and operators of motor vehicles who may otherwise have difficulty obtaining insurance through the voluntary market
o Every insurer licensed to write automobile liability insurance in any jurisdiction the facility association serves is required by law to become a member and remain a member of the association
o Insurers share in the operations of the association based on their market share of automobile business in the jurisdiction where the association operates
• Servicing carriers
o The underwriting and claims functions are provided by a limited number of designated members called servicing carriers
o They are compensated by operating and service fees
• Insurance from voluntary market or facility association
o Applicants must be declined by an insurer (for not meeting underwriting guidelines) before being accepted to the facility association
o Insurers have different underwriting guidelines, so a decline by one insurer does not necessarily mean an applicant needs the facility association
Applicant has two past claims, applies to standard market and is a decline, can obtain insurance through facility association, applies to Facility it is accepted

43
Q

Explain how risk sharing pools operate

A

• Risk sharing pools
o The facility association manages risk sharing pools in Alberta, New Brunswick, Nova Scotia, and Ontario
 Note: Newfoundland and Labrador to move to a risk sharing pool in early 2020
o Underwriters can transfer certain automobile exposures that may meet the companies underwriting guidelines, but still present higher-than-average risk, and losses are shared among members
 Alberta- Grid pool, non grid pool, 100% ceded; results shared based on market share
 New Brunswick- First chance pool, 100% ceded; results shared based on market share
 Nova scotia- Inexperienced driver pool, 100% ceded, results shared based on market share
 Ontario- Risk sharing pool- 15% retention; results shared based on market share and pool usage

44
Q

Describe the functions and operation of the Quebec Risk Sharing Plan

A

• Quebec risk sharing plan
o In Quebec, the groupement des assureurs automobiles (GAA) administers a risk sharing plan called the plan de repartition des risques (PRR)
o The PRR supports insurers providing access to automobile insurance for all Quebec automobile owners
o The PRR is a mechanism that allows an insurer to transfer any risk that does not meet its underwriting criteria into a shared pool
• The underwriting profit or loss of the pooled risks, as well as administration costs, are shared between participants in the ratio of their percentage of the total automobile written volume in Quebec

45
Q

Briefly outline how and by whom automobile insurance is provided in each province and territory and how it is regulated

A

• Automobile insurance in Canada falls under the jurisdiction of provincial and territorial governments
• It varies across jurisdictions in terms of the details of mandatory and optional coverages and also how the insurance is distributed
• Alberta, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, PEI, Yukon, Nunavut, and NWT have private companies providing basic coverage
• In Saskatchewan, Manitoba and BC, government insurers provide basic automobile insurance coverage
• In Quebec, basic coverages are provided by private insurers and the government
• Insuretech
o Brings new innovations, such as smartphone apps, peer-to-peer (P2P) insurance, custom policies, and more, to insurance
o Must comply with existing regulatory requirements for consumer protection
o Will support and be adopted by traditional distribution channels, such as allowing existing insurers to use digital technology to sell their products directly to customers
o May change things considerably- the role of agents or brokers may change, or risks may be insured by networks of peers without the need for a traditional insurer ( as with P2P insurance)
• Peer-to-peer (P2P) insurance- a method where a group of individuals form a network to pool their premiums to insure against a risk

46
Q

Outline how property damage losses are settled under tort, no-fault, direct compensation, private, and government insurance schemes

A

• Tort Schemes
o Alberta, BC, NWT, Nunavut and Yukon
o The at fault party is responsible for paying for the damage he or she causes to another person’s property due to his or her negligent operation of the automobile
o Negligence is determined in accordance with common law
o In most cases, the at fault party is insured and the at fault party’s insurance company compensates the party who suffers property damage
• Direct Compensation schemes
o Fault is determined in accordance with the insurance act and legislated fault determination rules
o Insurers assign liability according to the position of the vehicles at the time of the loss
o Insureds own insurer pays for any property damage caused by a negligent third party
o Insureds can’t bring an action against an at fault 3rd party for property damage
o Insurers must follow the fault determination rules
o In extenuating circumstances, the insured can bring an action against his or her own insurer to have the fault decision reversed by court
• Government insurance schemes
o Saskatchewan and Manitoba have no-fault government-operated auto insurance plans
o BC has a tort Government-operated auto insurance plan
o Crown corporation operate each plan similar to any other insurance company, but are the sole providers of certain basic coverages
o When individuals apply for their vehicle registration, they must automatically purchase basic insurance at the same time. Additional coverages, including higher limits and lower deductibles, may be purchased from the government insurer or from private insurers
• Quebec
o Quebec uses a dual distribution system
o The government plan administered by the Societe de l’ assurance auto du Quebec (SAAQ) provides basic coverage for bodily injury
o Private insurers provide civil liability coverage
o Coverage for not-at-fault property damage is provided on a direct compensation basis (under the Direct compensation Agreement, or DCA) as a subsection of civil liability coverage
o Optional loss or damage coverages are also provided by private insurance companies. Insureds deal only with their own insurers for claims, regardless of fault
• TORT
o Alberta
o BC
o NWT
o Nunavut
o Yukon
• Choice of TORT or No Fault
o Saskatchewan
• No Fault
o Manitoba
o New Brunswick
o Newfoundland and Labrador
o Nova Scotia
o Ontario
o PEI
o Quebec

47
Q

Outline the penalties that could arise for motorists that drive without insurance

A

There are fines for vehicle owners , lessees and drivers who do not carry valid automobile insurance

People found driving without valid insurance can also have their drivers license suspended

People found driving without valid insurance can have their vehicle impounded

If they are convicted of driving without valid automobile insurance, their insurance company may consider them high-risk drivers and charge them higher premiums or refused to sell them insurance altogether

If they are injured in an Accident while driving or occupying an uninsured vehicle they may be prevented from recovering for the loss: They may not be entitled to receive certain types of accident benefits, and they may not be allowed to sue the at fault driver for compensation as a result of the injuries from the accident

48
Q

Name and purpose Of five standard policy forms available in Ontario in addition to the owners policy (OAP 1 or SPF1)

A

SPF2 Standard drivers automobile policy - Provides coverage for drivers who are driving vehicles they do not own

SPF 4 standard garage automobile policy -
Provide certain types of automobile related businesses (Generally referred to as garages, but could include dealerships, repair shops, parking operations, and so on) With coverage for old automobiles, non-owned automobiles, and customers automobiles

SPF6 standard non-owned automobile policy- Provides non-owned automobile insurance where there is responsibility for the use an operation of non-owned vehicles

SPF7 excess automobile policy- Provides access insurance for liability exposure is, for you so long with SPF one, two, four, or six

SPF8 lessors contingent Automobile policy- Provides contingent insurance for businesses that leased vehicles on a long-term basis

49
Q

Identify five items of information shown on motor vehicle liability cards in addition to name and address of the insured

A
Name and address of insurer
Agency or brokerage of insured
Description of insured vehicle
Policy number
Effective and expiry date
Warning of penalties for the cards misuse
50
Q

Describe the key attributes of direct compensation systems of automobile insurance

A

Direct compensation systems allow people to be compensated by their own insurer for damages caused by a third-party

The jurisdictions where the systems exist, access to the civil justice system to recover damages is strictly limited or band

Insureds cannot claim against third parties or third-parties insurers

Their own insurers will identify them for the cost of repairs, as well as for damage to contents carried in the vehicle and it’s loss of use to the extent that they are not at fault

Automobile insurance policies in these systems include direct compensation property damage coverage to provide this compensation

51
Q

State the aims of direct compensation automobile insurance plans, in addition to the ultimate goal of cost savings that result in lower premiums

A
Less investigation
Less subrogation activity
Less litigation
Speedier settlements for insureds
Insureds deal only with their insurer
52
Q

State the exclusions under third-party liability coverage

A

Damage to property carried in or upon the automobile

Damage to other property owned or rented by, or in the care, custody, or control of the named insured or other insured person

Contamination of property being carried

Nuclear hazards, unless the insured has a nuclear energy hazard liability policy, and then only as excess insurance

Amounts over the policy limit purchased, other than legal costs and post judgement interest

53
Q

What does it mean to be negligent

A

Being negligent means failing to use the degree of care expected from a reasonable and prudent person

54
Q

Federal legal jurisdictions

A

Federal jurisdictions is matters affecting all of Canada

Example criminal law, interprovincial trade, Telecommunications, customs and immigration, fisheries

55
Q

Provincial and territorial legal jurisdictions

A

Provincial and territorial is matters affecting Provinces and territories

Example education property health transportation including automobile insurance

56
Q

Municipal legal jurisdictions

A

Municipal is the bylaws dealing with local matters

Example zoning , construction permits , crosswalk and parking bylaws speed limits within municipal borders