Study 2 Flashcards
How many AUTOMOBILE COLLISIONS occur on average per year in BRITISH COLUMBIA?
About 285,000 per year, according to ICBC.
What are two major categories of factors that cause COLLISIONS?
POOR ROAD CONDITIONS (weather, etc.) and POOR DRIVING BEHAVIOURS (distracted driving, speeding, etc.).
Why do people need LIABILITY INSURANCE?
Because crash costs can be WAY HIGHER than what a responsible driver can afford to pay out of pocket.
What does AUTOMOBILE THIRD-PARTY LIABILITY INSURANCE cover?
BODILY INJURY or DEATH of others and PROPERTY DAMAGE caused by your car.
Where is a person’s LEGAL LIABILITY for car accidents usually defined?
In PROVINCIAL/TERRITORIAL MOTOR VEHICLE ACTS (plus sometimes other laws and courts).
Does AUTOMOBILE LIABILITY INSURANCE cover accidents on PRIVATE PROPERTY?
Maybe, maybe not—depends on the jurisdiction!
What topics does this study cover?
TORT vs. DIRECT COMPENSATION, THIRD-PARTY LIABILITY, ADDITIONAL AGREEMENTS, ABSOLUTE LIABILITY, DIRECT COMPENSATION–PROPERTY DAMAGE, and B.C.’s SYSTEM.
What is a TORT in simple terms?
A CIVIL WRONG—basically, when one person’s actions cause harm to another.
In a TORT SYSTEM, how do people get compensated after a car accident?
The at-fault driver (or their LIABILITY INSURANCE) pays the injured party.
Why do people buy LIABILITY INSURANCE under a TORT SYSTEM?
To avoid GOING BROKE if they get sued for an accident.
In the example, why is MARIA at fault for hitting JONATHAN?
She was TAILGATING instead of driving like a “reasonable and prudent” person.
What happens if someone’s damages exceed their THIRD-PARTY LIABILITY LIMIT?
They’re ON THE HOOK for the extra amount. (Like Zahra, who had $500K coverage but caused $700K in damages!)
Who has the BURDEN OF PROOF in a tort-based claim?
The PLAINTIFF (the person suing) must prove the other party was NEGLIGENT.
What’s the REVERSE ONUS OF PROOF, and where does it apply?
In Ontario and some other provinces, THE DRIVER IS PRESUMED LIABLE in accidents with PEDESTRIANS OR CYCLISTS, unless they prove otherwise.
Do minor accidents always go to court in a TORT SYSTEM?
Nope! Many are settled using FAULT CHARTS, which follow past decisions.
Who PAYS for damages under a DIRECT COMPENSATION SYSTEM?
YOUR OWN INSURER—even if someone else is at fault.
Can you SUE a third party for damages in a DIRECT COMPENSATION SYSTEM?
Nope! You deal ONLY with your insurer.
What does DIRECT COMPENSATION–PROPERTY DAMAGE (DCPD) cover?
Damage to YOUR CAR, CONTENTS, and LOSS OF USE if you’re NOT AT FAULT.
In a DIRECT COMPENSATION SYSTEM, what happens if you’re partially at fault?
Your insurer pays for the not-at-fault portion, and if you have OWN DAMAGE COVERAGE, it covers the rest (minus your deductible).
What’s the ultimate goal of a DIRECT COMPENSATION SYSTEM?
FASTER CLAIMS + LOWER PREMIUMS!
Name FIVE benefits of a DIRECT COMPENSATION SYSTEM.
Less investigation, less subrogation, less litigation, faster settlements, and dealing only with your insurer.
Which system leads to lower insurance premiums—TORT or DIRECT COMPENSATION?
DIRECT COMPENSATION! Less legal drama = cheaper insurance.
What is a TORT in automobile insurance?
A CIVIL WRONG caused by NEGLIGENCE that results in damage to another person’s vehicle or property.
In a TORT system, who pays for the damages in an accident?
The AT-FAULT DRIVER (or their insurer) compensates the THIRD PARTY for damages.
What is THIRD-PARTY LIABILITY INSURANCE?
INSURANCE that protects the policyholder against claims for BODILY INJURY or PROPERTY DAMAGE caused to OTHERS.
What is an example of NEGLIGENCE in a car accident?
Tailgating another vehicle and being unable to stop in time, causing a REAR-END COLLISION.
What happens if a driver in a TORT system has insufficient liability coverage?
They must pay OUT-OF-POCKET for any damages beyond their POLICY LIMITS.
What is the REVERSE ONUS OF PROOF in Ontario?
In ACCIDENTS INVOLVING PEDESTRIANS OR CYCLISTS, the DRIVER is PRESUMED NEGLIGENT unless proven otherwise.
How does a DIRECT COMPENSATION system work?
Each DRIVER’S INSURER pays for their VEHICLE DAMAGE, regardless of who was at fault.
What are the benefits of a DIRECT COMPENSATION system?
LESS INVESTIGATION, LESS LITIGATION, FASTER SETTLEMENTS, and LOWER PREMIUMS.
What is DCPD coverage?
DIRECT COMPENSATION–PROPERTY DAMAGE, which pays for the insured’s vehicle damage caused by a THIRD PARTY.
How is compensation calculated in a DIRECT COMPENSATION system?
The INSURER pays for the portion of damage based on the driver’s PERCENTAGE OF FAULT.
What is the basic THIRD-PARTY LIABILITY limit in BC under Autoplan?
$200,000 for liability in lawsuits where allowed.
What did BC introduce in 2021 to limit lawsuits for car accidents?
ENHANCED CARE, a NO-FAULT insurance system.
What does third-party liability insurance cover OUTSIDE British Columbia?
DAMAGES caused to other vehicles and BODILY INJURY in jurisdictions where LAWSUITS ARE ALLOWED.
Who is insured under a third-party liability policy in BC?
The VEHICLE OWNER, HOUSEHOLD MEMBERS, and anyone with the OWNER’S CONSENT to drive the car.
How can BC drivers increase their liability coverage beyond $200,000?
By purchasing EXTENDED THIRD-PARTY LIABILITY COVERAGE from ICBC or a PRIVATE INSURER.
What happens if a BC driver hits a fence or building?
Their THIRD-PARTY LIABILITY INSURANCE covers the DAMAGE.
What document must BC drivers carry as PROOF OF INSURANCE?
The VEHICLE CERTIFICATE, which shows coverage details.
What is the consequence of providing FALSE INFORMATION on an insurance application in BC?
The claim may be INVALID under Section 75 of the INSURANCE (VEHICLE) ACT.
What determines a driver’s legal liability for injuries or damage to others?
NEGLIGENCE, such as poor driving behavior or road conditions, makes the driver legally liable.
Which law governs a motorist’s legal liability in Ontario?
The HIGHWAY TRAFFIC ACT, which outlines the motorist’s legal responsibilities.
What are common causes of automobile accidents?
Distracted driving, poor road conditions, excessive speed, and failure to follow road rules.
What factors contribute to the increasing number of vehicle accidents?
More vehicles, distracted driving, unique vehicle designs, and changing road infrastructures like roundabouts.
Why is it important to have adequate liability insurance?
The rising cost of claims and lawsuits makes it essential to protect against financial ruin.
What is the minimum amount of third-party liability insurance required in BC?
$200,000, provided by ICBC’s basic Autoplan.
Which provinces have a minimum of $500,000 in third-party liability insurance?
Manitoba, Nova Scotia, and Quebec (for specific vehicles).
What happens if an insured’s coverage isn’t enough to cover claims from an accident?
The law dictates PRIORITIES OF PAYMENT to determine how the claim will be distributed.
What is the minimum third-party liability coverage in Ontario?
$200,000, as specified by provincial regulations.
What is excluded from third-party liability coverage under the Insurance (Vehicle) Regulation?
Damage to the insured’s own property, property in the insured’s care, and certain types of accidents.
What is the exclusion for garage service operators under third-party liability insurance?
Damage caused while working on customers’ vehicles for business purposes, unless it’s their own vehicle.
How does the law handle accidents when a vehicle is used without the owner’s consent?
No coverage is provided if the insured doesn’t have the owner’s consent to drive.
What types of accidents are excluded from third-party liability insurance in BC?
Losses caused by war, radioactive substances, or accidents involving unlicensed vehicles.
Is there coverage for bodily injury or death of a spouse or child of the driver in BC before 1985?
No, accidents before 1985 are excluded under the Law and Equity Act.
What is the nuclear hazard exclusion in automobile insurance?
No coverage is provided for losses arising from nuclear hazards unless there’s a separate nuclear energy liability policy.
What does THIRD-PARTY LIABILITY coverage deal with?
It deals with CIVIL matters and lawsuits—basically, when you’re the one being sued!
Who helps pay for LEGAL FEES if you’re sued in a THIRD-PARTY LIABILITY claim?
ICBC! They cover the legal costs to defend YOU.
What kinds of extra costs does ICBC cover in THIRD-PARTY LIABILITY claims?
Emergency MEDICAL aid, fire extinguishers, jacks, and other necessary emergency SUPPLIES.
Does ICBC cover all costs after a third-party LIABILITY judgment?
They cover the costs within the POLICY limits, but anything above that? You’re on your own!
If a judgment exceeds your POLICY limit, what happens?
You’ll need a lawyer to handle the extra risk and cover the excess amount over the policy limit!
How does ICBC handle accidents outside the home PROVINCE?
They follow the laws of the place where the accident happened, not where you live!
What happens if an insured doesn’t follow the duties outlined by ICBC?
ICBC might say ‘NOPE!’ and not cover you, especially if they are prejudiced by your failure.
What must an insured do after an accident involving death, injury, or damage?
Notify ICBC in WRITING with details about the incident—no slacking off!
What happens if the insured receives LEGAL documents in relation to a claim?
Send them STRAIGHT to ICBC immediately—don’t sit on them!
What should the insured NOT do in a THIRD-PARTY LIABILITY case?
Don’t assume LIABILITY for the incident or settle a claim without ICBC’s say-so!
Can ICBC inspect your vehicle after an accident?
Yep! They can inspect it ANYTIME they want, as long as it’s reasonable.
If ICBC has to make a payment on your behalf, do you owe them anything?
Yep! You might have to PAY ICBC back for certain LEGAL payments they made for you!
What happens if you have an accident in a province with HIGHER insurance limits?
ICBC follows the HIGHER limits, even if your own insurance limit is lower!
If you’re involved in an accident in another province or the U.S., who defends you?
ICBC acts as your ATTORNEY in those cases, helping you out of province!
What can happen if you fail to notify ICBC of an incident involving your vehicle?
ICBC could say ‘Bye-bye’ to your coverage—it’s a BIG no-no.
What’s the cost of hiring a lawyer when a claim exceeds the POLICY limit?
It’s YOUR responsibility if the claim exceeds your POLICY—prepare your wallet!
Does ICBC help with EMERGENCY medical expenses?
Yup! They’ll cover reasonable EMERGENCY medical expenses for injured third parties, even if you’re not at fault!
What’s the maximum ICBC will pay for a THIRD-PARTY LIABILITY claim?
They’ll cover costs up to the POLICY limit—anything above that, you’re footing the bill!
Does ICBC cover all defense costs in THIRD-PARTY LIABILITY lawsuits?
Yep! They cover DEFENSE costs, but only up to your POLICY limit!
What happens if ICBC pays for emergency medical aid but you’re not at fault?
ICBC still covers the costs for THIRD-PARTY medical aid—even if you’re NOT liable!
If ICBC has to pay for something they’re not legally liable for, what happens?
You’ll have to REIMBURSE ICBC if they paid for something due to the law, not the policy!
What’s the insured’s responsibility when an action is brought in another province?
ICBC is your ATTORNEY, but you still need to cooperate in the defense and hand over all documents!
What happens if you drive a car that YOU don’t own but it has insurance?
You’re COVERED—if you have PERMISSION from the owner!
What if the borrowed vehicle doesn’t have insurance?
You might be COVERED under your OWN Autoplan or driver’s licence, as long as you believe it’s insured!
When is Autoplan coverage transferable to a non-owned vehicle?
When the vehicle’s driven by a household member, employee, or a spouse living with the insured. Simple, right?
What’s the deal with coverage if the borrowed car already has insurance?
Your coverage is SECONDARY—let the vehicle’s policy do its thing first!
What’s excluded from third-party liability coverage under a driver’s certificate?
ATVs! And other pesky exclusions—check the fine print.
Who gets covered under a driver’s certificate?
Only the PERSON named on the driver’s licence—no freebies!
When is the vehicle owner’s insurance PRIMARY?
When both the driver’s certificate and vehicle owner’s certificate are active at the same time. Vehicle’s insurance wins!
When is Autoplan coverage NOT transferable to a non-owned vehicle?
If you’re working at a garage, using the vehicle for BUSINESS, or it’s regularly yours—no freebies there either!
Does Autoplan cover a vehicle used as a taxi or for deliveries?
Nope! If it’s used for COMMERCIAL purposes, you’re out of luck!
Can you drive a government vehicle under Autoplan if it’s from another province or country?
Nope! Government vehicles are a no-go unless it’s BC!
What happens if you drive a car without the OWNER’S consent?
No coverage! If you know they didn’t say “YES,” you’re on your own!
What does absolute liability mean for insurers?
The insurer still pays for THIRD-PARTY claims, even if the insured messes up the policy conditions!
If an insured violates their policy, does that affect third-party claims?
Nope! THIRD-PARTY claims are still protected, even if the insured broke the rules.
When does absolute liability apply?
When the insured violates the policy, but innocent third parties still get PAID!
What happens if the insured lets someone with a SUSPENDED license drive their car?
Normally, no coverage! But absolute liability ensures the third-party still gets PAID if the insured is liable.
Can insureds claim their own damages if they violate the policy?
Nope! Absolute liability only helps THIRD PARTIES, not the insured.
What’s the maximum an insurer can pay under absolute liability?
It’s the minimum liability limit of the jurisdiction, no more, no less.
Can an insurer defend a claim under absolute liability after coverage is bound?
Not really! It’s much harder to defend once the policy is in place—better to catch issues up front!
What’s the best defense for insurers against absolute liability claims?
Solid risk management and making sure all policy applications are accurate and complete!
What happens if an insured violates the Criminal Code or a provincial law?
Doesn’t affect the third party’s ability to claim—absolute liability still covers them!
What does BVDC stand for in British Columbia?
Basic Vehicle Damage Coverage—it covers repairs for damage caused by a third PARTY!
How much does BVDC cover for vehicle damage?
Up to $200,000 for repairs or replacement of your vehicle—no deductible!
Can you claim damage to your car contents under BVDC?
Nope! BVDC doesn’t cover your stuff—just the vehicle!
What’s the deal with loss of use under BVDC?
BVDC pays for a rental car—so you’re not stranded when your car’s in the shop!
When doesn’t BVDC apply?
No BVDC if it’s a solo crash, hit-and-run, or you’re 100% at fault!
Can BVDC cover you if you’re 100% at fault?
Sorry, no. You’re on your own unless you have optional collision coverage!
What’s the benefit of own damage coverage?
Optional collision coverage steps in when you’re at fault—BVDC can’t help you there!
What happens if you’re 50% at fault?
You get 50% covered by BVDC—the rest might come from your optional collision coverage!
How does the fault determination work for BVDC?
ICBC decides who’s at fault—not you or your neighbor who always thinks they’re right!
How does inverse liability work?
If you’re hit in a place where you can’t claim from the other driver, inverse liability covers you!
What if you’re in a crash outside BC and can’t claim from the other driver?
Inverse liability has your back—covers repairs to your vehicle based on fault!
What does BVDC cover for a 100% not-at-fault driver?
BVDC covers 100% of your repairs and loss of use—but no damage to contents!
If a crash involves no other vehicle, can you use BVDC?
Nope! BVDC needs another vehicle to be at fault—no vehicle, no coverage!
What happens if you’re 50% at fault in a crash?
You’ll get 50% of the damage costs from BVDC, the rest might come from optional coverage!
Can you claim for cargo damage under BVDC?
No, damage to cargo is handled by the other driver’s liability—not BVDC.
Does BVDC apply in other provinces or outside Canada?
Only if you’re in BC—other provinces have their own DCPD systems!
What does the Civil Resolution Tribunal (CRT) do in a claim dispute?
The CRT helps you resolve disputes with ICBC—no lawyers needed!
What happens if you disagree with ICBC’s fault assessment?
You can challenge it through the CRT or court—but good luck proving you’re not the bad driver!
Can you still use collision coverage if you’re not at fault?
Absolutely! Collision coverage steps in if you need more help than BVDC provides.
What if you’re 100% at fault?
BVDC won’t cover anything—unless you’ve got optional collision coverage.
Does BVDC apply if the other driver’s car is unidentified (hit-and-run)?
Nope! You’re stuck with your own insurance in hit-and-run situations—unless you have special coverage!
What is the main difference between TORT and DIRECT COMPENSATION systems?
TORT systems are adversarial and involve legal action, while DIRECT COMPENSATION systems involve claims handled by the insured’s own insurer.
What does THIRD-PARTY LIABILITY INSURANCE cover?
It covers bodily injury or death of others and damage to their property caused by the insured’s automobile.
What benefits does ICBC THIRD-PARTY LIABILITY coverage provide?
It includes coverage for legal costs, medical aid, investigations, claim settlements, and defense against civil actions.
What is required of the insured under ICBC THIRD-PARTY LIABILITY coverage?
The insured must notify the insurer, provide evidence, and refrain from settling claims or assuming liability.
Can AUTOPLAN THIRD-PARTY LIABILITY coverage be transferred to another vehicle?
Yes, but only under specific conditions with qualifying persons and excluding certain vehicles.
When are a driver’s certificate and the owner’s certificate used together?
The owner’s certificate is primary in a claim if both certificates are in effect for the same incident.
What is the MAXIMUM paid under the absolute liability provision?
The minimum required third-party liability insurance limit.
Can an insurer be liable for third-party judgments if the insured violated a policy condition?
Yes, but the insurer has the right to recover the payment from the insured.
What is the role of FAULT DETERMINATION RULES in direct compensation systems?
Insurers use them to assess fault in claims for property damage under DCPD.
What does INVERSE LIABILITY cover in British Columbia?
It covers vehicle damage when local laws prevent the insured from claiming against the at-fault driver after a collision in other parts of Canada or the U.S.
