Study 8 Flashcards
What are STATUTORY CONDITIONS in automobile insurance?
They’re the RULES OF THE ROAD for insurance policies, protecting both the INSURED and the INSURER. Think of them as the “terms and conditions” you never read but REALLY should.
True or False: Statutory conditions can be changed to give the insured LESS coverage than the law requires.
FALSE! That’s a big NO-NO. Insurers can’t sneak in lower coverage, even if they try.
What’s the deal with PRESCRIBED CONDITIONS in British Columbia?
They’re like STATUTORY CONDITIONS but with a fancy name. They MUST be printed in every policy, word-for-word. No creative writing allowed!
What happens if you DON’T tell your insurer about a CHANGE OF ADDRESS or a SUBSTITUTE VEHICLE?
You’re in TROUBLE! You’ve got 10 days to spill the beans, or your coverage might go POOF.
Can you use your car to ESCAPE THE COPS or WIN A SPEED RACE?
NOPE! That’s PROHIBITED USE. Your insurer will laugh (and then deny your claim) if you try.
True or False: You can drive without a LICENCE as long as you’re “qualified by law.”
FALSE! You need BOTH a licence AND qualifications. No licence = NO COVERAGE.
What’s the rule if your car is DAMAGED in an accident?
PROTECT IT from further damage, DON’T REPAIR IT (unless it’s urgent), and file a PROOF OF LOSS within 90 days. Otherwise, your claim might go vroom vroom out the window.
What’s SALVAGE in insurance terms?
It’s the leftover bits of your car after an accident. The insurer gets to sell it unless you want to keep it (and pay for the privilege).
True or False: If your car is a TOTAL LOSS, you can just ABANDON it to the insurer.
FALSE! You can’t just DUMP it. The insurer has to agree to take it.
What’s a STATUTORY DECLARATION?
It’s a fancy SWORN STATEMENT where you promise you didn’t WILLFULLY wreck your car. Basically, pinky-promise you’re not a fraudster.
How long does an insurer have to PAY YOUR CLAIM?
60 DAYS after they get your proof of loss. If they’re late, they better have a GOOD excuse.
Who can give NOTICE OF LOSS if you can’t?
Your AGENT (not your insurance agent, but someone like a lawyer or dependant). Just make sure they explain WHY you couldn’t do it yourself.
How can an INSURER CANCEL your policy?
By sending you a REGISTERED MAIL notice 15 DAYS in advance. Or, if they’re in a hurry, HAND-DELIVER it with 5 DAYS’ notice.
True or False: If you cancel your policy, you get a FULL REFUND.
FALSE! It’s a SHORT-RATE refund, meaning the insurer keeps some cash to cover their ADMIN COSTS.
What’s a MATERIAL CHANGE IN RISK?
It’s any change that makes your insurer go, “Hmm, we should charge MORE for this.” Like selling your car or adding a MORTGAGE.
What’s the golden rule of NOTIFYING YOUR INSURER?
TELL THEM EVERYTHING! Changes in address, vehicle use, or risk? SPILL THE TEA ASAP.
What’s the rule if you want to CHANGE HOW YOU USE YOUR CAR (e.g., from personal to business)?
You MUST tell your insurer BEFORE you do it. Otherwise, you’re BREAKING THE RULES, and your coverage might VANISH.
True or False: If you’re driving WITHOUT A LICENCE but could’ve gotten one, ICBC might let you off the hook if you pass a driving test.
TRUE! ICBC can give you a SECOND CHANCE if you prove you’re qualified to drive.
What’s the test for ILLICIT TRADE OR TRANSPORTATION in a vehicle?
Is the activity ILLEGAL? If yes, your insurer says, “NO COVERAGE FOR YOU!”
Can you OPERATE A VEHICLE WHILE INTOXICATED and still expect coverage?
NOPE! That’s a BIG BREACH. Your insurer will say, “Nice try, but NO.”
What happens if you DON’T FORWARD LEGAL DOCUMENTS to your insurer after an accident?
You’re SABOTAGING your own defence. The insurer needs those papers to FIGHT FOR YOU.
True or False: If your car is DAMAGED, you can START REPAIRS right away.
FALSE! You need the insurer’s WRITTEN CONSENT first, unless it’s to PREVENT FURTHER DAMAGE.
What’s the insurer’s MAXIMUM LIABILITY if your car is a total loss?
The LEAST of:
- The ACTUAL CASH VALUE of the car,
- The DECLARED VALUE, or
- The cost to REPAIR/REPLACE it with LIKE KIND AND QUALITY.
What’s the DEADLINE to file a STATUTORY DECLARATION after a loss?
90 DAYS. After that, you’re OUT OF LUCK (and maybe out of coverage).
True or False: The insurer can INSPECT YOUR CAR anytime they want.
TRUE! They can pop by at REASONABLE TIMES to make sure you’re not pulling a FAST ONE.
What’s the TIME LIMIT to sue your insurer for a claim?
2 YEARS from the date of the loss. After that, the courthouse doors are CLOSED.
What are STATUTORY CONDITIONS called in Nova Scotia?
MANDATORY CONDITIONS. Because in Nova Scotia, they don’t just suggest—they DEMAND.
What’s the fancy name for STATUTORY CONDITIONS in British Columbia?
PRESCRIBED CONDITIONS. It’s like statutory conditions but with a British Columbia twist.
True or False: In Quebec, statutory conditions are called GENERAL CONDITIONS.
TRUE! But don’t let the name fool you—they’re still MANDATORY.
What’s the PURPOSE of statutory/prescribed conditions?
To PROTECT both the INSURED and the INSURER by spelling out the RULES OF THE ROAD.
What’s one topic covered by PRESCRIBED CONDITIONS in British Columbia?
PROHIBITED USE. (Hint: No racing, no escaping cops, and definitely no illicit trade!)
True or False: The MATERIAL CHANGE IN RISK condition is a prescribed condition in British Columbia.
FALSE! It’s a STATUTORY CONDITION in other provinces but NOT in B.C.
What’s the DEADLINE for notifying your insurer about a CHANGE OF ADDRESS?
10 DAYS. Don’t ghost your insurer—they need to know where to send the bills!
What happens if you BREACH the PROHIBITED USE condition?
Your insurer says, “YOU’RE ON YOUR OWN,” and denies your claim.
What’s the rule for REPAIRS after a loss?
DON’T TOUCH IT until the insurer gives WRITTEN CONSENT (unless it’s to prevent further damage).
What’s the TIME LIMIT for an insurer to PAY YOUR CLAIM?
60 DAYS after they get your proof of loss. If they’re late, they owe you INTEREST.
What is PROOF OF LOSS?
It’s a DOCUMENT you submit to your insurer after a loss, detailing what happened and how much you’re claiming.
Example: After your car is stolen, you fill out a proof of loss form to tell the insurer, “My car is gone, and I’d like $20,000, please.”
What is LIMIT OF LIABILITY?
It’s the MAXIMUM AMOUNT your insurer will pay for a claim.
What is PRO RATA CANCELLATION?
It’s when a policy is cancelled, and the insurer refunds the UNUSED portion of the premium based on the exact time left.
Example: If you cancel your 12-month policy after 6 months, you get 50% of your premium back.
What is SHORT-RATE CANCELLATION?
It’s when YOU cancel your policy early, and the insurer keeps a portion of the premium to cover ADMIN COSTS.
Example: If you cancel after 6 months, you might only get 40% back instead of 50% because the insurer says, “We had to do paperwork!”
What is SHORT RATE?
It’s the PENALTY FEE you pay for cancelling your policy early. It’s higher than a pro rata refund.
Example: Cancelling early might cost you 10% of your premium because the insurer says, “We don’t like surprises.”
What is a MATERIAL CHANGE?
It’s a CHANGE in your risk that could affect your premium or coverage, like selling your car or using it for business.
Example: If you start UBERING with your car but don’t tell your insurer, that’s a material change—and they might DENY your claim if they find out.
