Study 2 - Third Party Liability

Question 1

The Absolute Liability provisions apply to which of the following coverages?

a. accident benefits
b. own damage
c. third party liability
d. all of the above

Answer 1

c. third party liability

Question 2

Minimum limits under the Third Party Liability coverage are

a. applicable only where there is a government insurance plan
b. not required in all Canadian jurisdictions
c. the amount of Third Party Liability coverage that must be purchased from the government in each province
d. the smallest amount of Third Party Liability coverage that may be purchased in any Canadian jurisdiction

Answer 2

d. the smallest amount of Third Party Liability coverage that may be purchased in any Canadian jurisdiction

Question 3

The insurer has a legal right to recover any amount paid by reason of absolute liability from

a. the third party
b. the insured
c. the third party’s insurer
d. all of the above

Answer 3

b. the insured

Question 4

Under the TPL coverage, the insurer does NOT agree to

a. defend civil actions against the insured
b. investigate and settle claims
c. pay post-judgment interest on that part of a judgment that is in excess of the policy limits
d. reimburse the insured for out-of-pocket for immediate medical aid to an injured third party

Answer 4

c. pay post-judgment interest on that part of a judgment that is in excess of the policy limits

Question 5

When an accident involves a motorist and a bicyclist

a. the motorist is required to prove that the bicyclist is negligent
b. the motorist is required to prove that the motorist is NOT negligent
c. the bicyclist is required to prove that the motorist is negligent
d. the bicyclist is required to prove that the bicyclist is NOT negligent

Answer 5

b. the motorist is required to prove that the motorist is NOT negligent

Question 6

The minimum limit under the TPL coverage is $200,000 in every Canadian province and territory except

a. Alberta
b. British Columbia
c. Newfoundland
d. Quebec

Answer 6

d. Quebec

Question 7

The Absolute Liability Law provides the right of third parties to have the insurance money under a policy applied to their judgment against an insured, shall not be prejudiced by:

a. a discharge of the policy by the insured before the event giving rise to the claim
b. a cancellation of the policy by the insured before the event giving rise to the claim
c. any act of default of the insured before or after the event in contravention of the Act or the policy
d. any violation of the municipality law

Answer 7

c. any act of default of the insured before or after the event in contravention of the Act or the policy

Question 8

Onus Probandi

a. always rests on the person making the claim when an automobile is involved
b. is the right to state one’s case
c. means “burden of proof”
d. means “presumed liable”

Answer 8

c. means “burden of proof”

Question 9

Negligence means

a. the omission to do something that a reasonable person would do
b. the omission to do something that a reasonable person would omit to do
c. the doing of something that a reasonable would do
d. all of the above

Answer 9

a. the omission to do something that a reasonable person would do

Question 10

Burden of proof is

a. denying that one was negligent
b. explaining to a court that one was not negligent but being unable to prove it
c. having to prove to the court that the other party was negligent
d. showing one’s ID card at a bar or tavern

Answer 10

c. having to prove to the court that the other party was negligent

Question 11

An “Insured Person” as defined in the policy would NOT include

a. the person named in the owner’s policy
b. any person who drives the described automobile With the name insured’s consent
c. an occupant of the described automobile of the name Insured
d. none of the above

Answer 11

d. none of the above

Question 12

When an accident involves a pedestrian and a motorist,

a. the pedestrian is required to prove that the motorist is negligent
b. the pedestrian is required to prove that the pedestrian is NOT negligent
c. the motorist is required to prove that the pedestrian is negligent
d. the motorist is required to prove that the motorist is NOT negligent

Answer 12

d. the motorist is required to prove that the motorist is NOT negligent

Question 13

In Canada, all motorists must carry a stated minimum limit of Third Party Liability coverage. Which of the following requires the lowest limit?

a. British Columbia
b. Newfoundland
c. Quebec
d. Saskatchewan

Answer 13

c. Quebec

Question 14

Under Absolute liability law, the insurer is required to pay the third party

a. up to the limit of the policy
b. up to $200,000
c. up to the minimum limits of the jurisdiction
d. all of the above

Answer 14

c. up to the minimum limits of the jurisdiction

Question 15

Which of the following is NOT a true statement?

a. legal liability arises out of negligence
b. the Third Party Liability coverage provides protection not only for the insured but also for anyone who drives or operates any part of the automobile with the insured’s consent
c. the Third party Liability coverage provides protection only in cases where liability is imposed by law
d. when a liability claim arises out of a collision between two automobiles, the onus of proof is upon the defendant

Answer 15

d. when a liability claim arises out of a collision between two automobiles, the onus of proof is upon the defendant

Question 16

Under Priorities of Payment, the policy limit reserved for bodily injury claims of automobile accidents in Quebec is

a. $180,000
b. $190,000
c. $45,000
d. none of the above

Answer 16

d. none of the above

Question 17

Which of the following is NOT a common exclusion under the Automobile Liability Insurance?

a. amounts in excess of limit purchased, including legal costs and post-judgment interest
b. nuclear energy hazards
c. claims arising from contamination of property carried in the automobile
d. property in the car, which is under the care, custody or control of the named insured

Answer 17

a. amounts in excess of limit purchased, including legal costs and post-judgment interest

Question 18

Mary Miller loses control of her automobile, crashes through John Johnson’s fence and destroys a beautiful oak tree. From whom will Johnson collect for the damage to the fence and the tree?

a. his own automobile insurer (Own Damage)
b. his own automobile insurer (Third Party Liability)
c. Mary Miller’s automobile insurer (Third Party Liability)
d. Mary Miller’s automobile insurer (Own Damage)

Answer 18

c. Mary Miller’s automobile insurer (Third Party Liability)

Question 19

The minimum limit of liability insurance purchased in an automobile policy is

a. to adequately cover the insured from financial ruin in case of a catastrophic injury claim
b. compulsory in all provinces except Quebec
c. the minimum amount of liability insurance allowed to be purchased by the car owner
d. the maximum amount of liability insurance that could by bought from crown corporations

Answer 19

c. the minimum amount of liability insurance allowed to be purchased by the car owner

Question 20

Define subrogation.

Answer 20

The transfer of rights(to an insurer) of someone whose debts or expenses have been paid to pursue recovery from an at fault party.

Question 21

Define absolute liability.

Answer 21

Under absolute liability the insurer is responsible to pay third party claims even though the insured has breached a policy condition.

Question 22

What is third party liability?

Answer 22

It protects a motorist who is legally liable for an accident against claims for bodily injury, death, or damage to property of others up to the limit.