Study 9: Automobile Insurance - Key Term

Question 1

uninsured motorist

Answer 1

One who drives an automobile without the statutory minimum required insurance; usually discovered after an accident.

Question 2

underinsured motorist

Answer 2

A motorist who does not carry enough liability insurance; usually this is established after a loss.

Question 3

defendant

Answer 3

In civil matters, the person or organization that is being sued.

Question 4

third-party liability insurance (automobile)

Answer 4

Covers an insured if her car injures someone else or damages property and she is held legally responsible. In some parts of the country, this is referred to as “Section A”

Question 5

accident benefits

Answer 5

Indemnity provided to an insured on a first-party basis towards the cost of medial and rehabilitative care for the treatment and recovery of injuries arising out of the use or operation of an insured’s automobile. Accident benefits may include provisions for the partial reimbursement of wage loss and home care expenses. such benefits may also include funeral expenses and survivor’s benefits in the event of a loss that involves an insured’s fatality.

Question 6

at fault

Answer 6

Where an insured is held legally liable for damage or injury (a term usually used in automobile or casualty insurance); a concept used in direct compensating in determining the degree of liability and amount of compensation.

Question 7

collision

Answer 7

The act of striking against something with force.
The impact of a moving body; for example, a vehicle, vessel, or rail with another or with a fixed object in or upon the ground.

Question 8

driver’s fault chart

Answer 8

A set of accident scenarios to determine fault or liability between drivers involved in an accident and the compensation payable. It takes into account the Highway Traffic Code and case law.

Question 9

Facility Association

Answer 9

An entity established by the Canadian automobile insurance industry to ensure that automobile insurance is available to all owners and licensed drivers of motor vehicles where such owners or drivers are unable to obtain automobile insurance through the voluntary insurance market.

Question 10

rate manual

Answer 10

A manual containing rates and underwriting rules for use by a company’s staff, agents, and/or brokers.

Question 11

driver abstract

Answer 11

A three-year record of a driver. Includes information such as driver’s name, license number, class, expiry date, conditions/restrictions, and/or status information.

Question 12

described automobile

Answer 12

The vehicle identified in an insurance policy.

Question 13

vehicle identification number (VIN)

Answer 13

The number usually found on the dashboard of a vehicle on the driver’s side, usually listed on the vehicle registration and title. The VIN is a combination of letters and numbers 17 characters in length that can be used to identify the make, model, and year of a car.

Question 14

lienholder

Answer 14

One who holds a registered claim (referred to as a “lien) against a given property as security or collateral against a loan or workmanship performed in relation to that property. The financial commitment associated with a registered lien must be fully discharged and satisfied before the property in question may be liquidated, sold, or transferred to another party.

Question 15

carsharing

Answer 15

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.

Question 16

driver training credit

Answer 16

A premium discount or rebate given under private passenger automobile insurance for all new drivers who have successfully completed an approved driver training program.

Question 17

fraud

Answer 17

1) Methods used to deceive to cause an unwarranted favorable decision for one’s own benefit.
2) Deliberate misrepresentation or misstatement.
3) Concealment of facts that should at the time be made known.

Question 18

third-party liability

Answer 18

Insurance coverage to pay compensation to anyone who sustains loss or damage resulting from an insured’s negligent conduct or omission.

Question 19

third-party

Answer 19

A claimant under a liability policy, so called because she is not one of the two parties (insured and insurer) who has entered into the insurance contact that pays her claim.

Question 20

additional agreements

Answer 20

An add-on or supplementary agreement apart from the original or existing agreement.

Question 21

absolute liability

Answer 21

Liability associated with very dangerous actions. Often found in cases involving explosives and in many automobile laws. Negligence does not have to be proven.

Question 22

minimum limits

Answer 22

The smallest amount of third-party liability insurance that may be purchased in any Canadian jurisdiction.

Question 23

direct compensation-property damage

Answer 23

Covers damage to, or the loss of use of, an automobile or its contents, to the extent that the driver of another vehicle was at fault for the accident. It is called “direct compensation” because, even thougth someone else caused the damage, the insured person collects directly from his or her insurer instead of from the person who caused the accident.

Question 24

temporary substitute automobile (TSA)

Answer 24

An automobile that is used by an insured temporarily because the described automobile is out of service because of breakdown, repairs, servicing, theft, sale, or destruction. The TSA cannot be owned by the insured or by anyone living in the same dwelling with the insured. The coverage of the described automobile applies to the TSA even though it may have insurance.

Question 25

unsatisfied judgment fund

Answer 25

A fund used to pay losses arising out of automobile accidents in which there is no applicable insurance. The fund is financed, in most instances, by the government from general taxes and license fees, and in some other areas, it is financed and underwritten by insurance companies as a group.

Question 26

uninsured motorist coverage

Answer 26

A form of insurance that pays for the bodily injury or property damage caused by the owner or operator of an automobile that is not insured. Insurance is available to a policyholder and family members if they are insured by a hit-and-run motorist or driver who carries no liability insurance and is at fault for the accident. Where the person at fault is not insured or there is a verifiable hit-and-run, a government fund may provide coverage up to the statutory limit.

Question 27

underinsured motorist coverage

Answer 27

An optional bodily injury and property damage coverage that applies in an accident involving a thrid party who dos not carry adequate liability insurance.

Question 28

replacement value

Answer 28

The current market value of the cost to replace the lost or damaged insured property