Study 12 – Direct Compensation Plans: Ontario and New Brunswick

Question 1

Which of the following was NOT an objective of no-fault insurance?

a. allowing the claimant to recover his own insurer
b. increasing legal fees and court costs
c. speedier settlements for insureds
d. cost savings because of the absence of litigation

Answer 1

b. increasing legal fees and court costs

Question 2

Which of the following statement is NOT true, with respect to “Direct Compensation Property Damage (DCPD)?

a. loss of use subject to the extent that the own insured is not at fault
b. DCPD still applies even if there is a breach of policy condition
c. a claim could not be made under this section when the other driver has not directly struck the insured’s vehicle, even if the other driver is identified and found to be negligent
d. all of the above

Answer 2

c. a claim could not be made under this section when the other driver has not directly struck the insured’s vehicle, even if the other driver is identified and found to be negligent

Question 3

Which of the following is NOT true of “knock-for-knock” agreements:

a. British insurers were the first to implement this kind of agreement
b. these agreements cover both physical damage to vehicles and damage to other property
c. these agreements were never binding on insureds, and they could sue if they disagreed
d. each insurer paid its own insured and did not pursue subrogation

Answer 3

b. these agreements cover both physical damage to vehicles and damage to other property

Question 4

Which of the following was an objective of “no-fault” automobile insurance?

a. allowing the claimant to recover from his own insurer
b. cost savings because of the absence of litigation
c. speedier settlements for insureds
d. all of the above

Answer 4

d. all of the above

Question 5

Which of the following statement is NOT true of Direct Compensation?

a. insured could bring an action against own insurer if not satisfied with settlement
b. insured could bring an action against the third party’s insurer if not satisfied with settlement
c. insured could bring an action against a non-Ontario insurer who is not subscribed to the DCPD agreement, if the damage involves a non-Ontario third party
d. none of the above

Answer 5

b. insured could bring an action against the third party’s insurer if not satisfied with settlement

Question 6

Insurers in Ontario and Quebec rely on these charts or rules, to establish chargeability for insurance premiums

a. fault rules in Ontario
b. fault rules in Quebec
c. fault rules in IBC agreements
d. fault rules in no-fault agreements

Answer 6

a. fault rules in Ontario