Study 9 - Automobile Physical Damage Claims

Question 1

What must an adjuster have knowledge of to handle first party and third party claims?

Answer 1

• Civil Code of Quebec or the applicable provincial or territorial common law system
• Provincial or territorial automobile insurance legislation
• Highway safety legislation
• Specialty agreements derived from legislation (for example, direction compensation agreements)
• Policy wordings and endorsements
• Reciprocal claims agreements among provinces and territories

Question 2

What do private insurers offer in BC?

Answer 2

Section A: excess third party liability
Section C: coverage for loss or damage
Section D: excess underinsured motorist protection

Question 3

What acts as proof of insurance in Saskatchewan?

Answer 3

Registration and drivers license

Question 4

What do private insurers offer in Saskatchewan?

Answer 4

Optional and excess

Question 5

What do private insurers offer in Manitoba?

Answer 5

Optional and excess

Question 6

How does insurance in Quebec work?

Answer 6

Injury is through SAAQ

Damage is through private; can also offer excess AB

Question 7

What five provinces have direct compensation?

Answer 7

New Brunswick, Nova Scotia, Ontario, PEI & Quebec

Question 8

What are the government insured provinces?

Answer 8

Manitoba, Saskatchewan, BC

Quebec for bodily injury

Question 9

What provinces does apply the auto deductibles for fire and lightning?

Answer 9

Saskatchewan

Question 10

What is considered illegal use of the auto?

Answer 10

Convicted cause death or bodily injury due to criminal negligence

Failing to stop at an accident

Driving while impaired

Refusing to comply with breath sample

Operating auto when disqualified from doing so

Under the influence, unable to maintain proper control, using the car in a race or illegal activity, and driving when not authorized by law

Provinces w/ DCPD do not carry the exclusions

Question 11

What are some common endorsements that may related to auto damage?

Answer 11

Loss of use
Limitation of amount
Waiver of depreciation
Liability for damage to non-owned
Blanket-basis fleet
Ridesharing

Question 12

What does IBC do in relation to clains?

Answer 12

Data collection, compilation & reporting
Receives info from insurance companies
Maintains database of stolen automobiles

Question 13

What are the four types of Appraisal programs?

Answer 13

Appraisers
Appraisal Centres
Direct Repair Programs
Garage Estimates

Question 14

What are the minimum standards for a repair facility to qualify for direct repair programs?

Answer 14

Having well-trained staff
Adequate office space
Capacity to do the number of jobs

Question 15

What should a diagram of an auto accident include?

Answer 15

• Identify accident locus to show type of intersection (T, Angular, Fourway, Fiveway, Sixway, None, lane markings)
• Location of accident, label each street
• Stop, slow or any other traffic signs
• Directions, including compass directions
• If a parking lot, show how configured
• Do not use terms such as ‘insured’ or ‘third party’ for impartiality, use a legend

Question 16

What can be included on written statements from police?

Answer 16

• Position of autos when police arrived
• Tire tracks
• Was it asphalt surface
• Nature and location of debris
• Snow, ice, other surface elements
• Layout of the scene
• Existing weather conditions

Question 17

What three things are typically in automobile claim statements?

Answer 17

• Discrepancies between application/policy
• Representations by insured when policy was issued
• Material changes during the policy period

Question 18

What physical aspects of the accident may be included in the statement?

Answer 18

• State of the weather
• Conditions affecting visibility
• Surface, markings, grade and bend of the road
• Road signs and speed limit postings
• Obstruction of lines of sight by trees, bushes, or other landscape features

Question 19

What are the typical items in the sequence of events reviewed?

Answer 19

• Direction of travel
• Speeds
• Where impact occurred
• Final resting location of autos

Question 20

How may you use experts in automobile claims?

Answer 20

• Accident reconstruction can be used to determine how an accident happened / determine fault
• Cause and origin engineer can investigate fire, accelerants, equipment failure (could lead to subro)
• Mechanic may be asked to report on state of auto, to establish value
• Antique car specialist can be asked to evaluate a total loss when conflict of value is anticipated
• Surveyor may be required to check topography of roadway, if defect in road caused against recovery could be possible

Question 21

What is typically included in the investigation reported?

Answer 21

• Signed statements
• Police reports
• Photographs
• Experts reports
• Documents to support recommendations

Question 22

Why do most insurers prefer to pay for auto repairs directly?

Answer 22

• Safety of auto could be impaired if insured fails to have damage repaired immediately
• Insured has another accident, overlapping damages could be paid twice, increasing claim costs
• Psychologically, tendency may exist for people to exercise less care with a damage auto
• Repair is considered to be a return to pre loss condition, thus discouraging fraud

Question 23

How are total losses treated in Quebec?

Answer 23

They may still proceed with repairs

Question 24

What are the typical steps in an automobile fire investigation?

Answer 24

• Obtain statements from owner and person last possession of auto
• Interview firefighters, police, tow truck driver and any other witnesses
• Hire an expert to determine the cause if required
• Check maintenance records of auto
• Review insured’s finances, including any liens on the auto
• Determine whether insured had other insurance losses
• Check for any reent changes in policy, such as reduced deductible or increase in coverage

Question 25

Explain signs of electrical fire in an auto

Answer 25

• Shorted wire shows beads at end of bridge
• Burned wire sharply pointed
• Should cause damage to battery and motor
• Seldom pass into passenger compartment

Question 26

Who oversees the direct compensation agreement in Quebec?

Answer 26

GAA

Groupement des assureurs automobiles

Question 27

When does DCA apply to collisions in Quebec?

Answer 27

On public highways, two or more identified drivers

Question 28

What issues does the DCA driver fault chart ignore?

Answer 28

• Actions of pedestrians
• Speed
• Weather conditions
• Road conditions
• Light sound or hand signals
• Marked or unmarked road lines

Question 29

What are the three steps to making a claim in Quebec?

Answer 29

1) Indemnification under auto policy under first party coverages purchased by the insured
2) Application of DCA to determine fault and pay the insured under Section A-Civil Liability, according to percentage of fault assessed against third party
3) Pursuit of any opportunity to recover from third party

Question 30

What is the basic deductible in Saskatchewan?

Answer 30

$700

Question 31

Explain temporary substitute automobile

Answer 31

• When the insured is driving a temporary substitute vehicle, the insured’s own policy may provide coverage.
• If the deductible under the insured’s policy is a lower amount than the deductible under the insurance carried by the owner of the temporary substitute automobile, such an additional insuring agreement covers the difference in the deductibles.
• If the owner of the temporary substitute automobile does not carry physical damage coverage, and if the loss is covered by the insured’s policy, then there is coverage for the damage to the temporary substitute automobile subject to the provisions of the insured’s policy.
• Many credit cards now offer insurance on substitute or rental vehicles, so no additional coverage is required on the insured’s own policy.
• For example, if the insured carries a collision deductible of $100 and the owner of the temporary substitute automobile carries a collision deductible of $250, the maximum amount payable by the insured’s policy is $150.

Question 32

When the insured is suspected of having a breached policy condition and might be denied coverage,
what action should the loss adjuster take in order to avoid estoppel?

Answer 32

 Issue a non-waiver agreement.
 Issue a reservation of rights letter.
 Alert the underwriting department of any misrepresentation and material change of risk.
 The insurer may be permitted to reduce the amount of insurance applicable or to charge additional premium to reflect the risk undertaken.

Question 33

Who must provide an automobile loss theft statement and what details are listed on it?

Answer 33

• The person last in possession of the automobile, if not the owner, must prepare the statement.
• Information required in the statement includes the following:
o Who last had the automobile?
o When and where was it last known to be?
o What are the details of all special equipment installed on the automobile?
o Is there any pre-existing mechanical or body damage?
• The adjuster can interview other family members or witnesses to confirm the information received.
• The police investigation may be another helpful source of information.

Question 34

If a car theft is not recoverable, what are the steps?

Answer 34

• If the automobile is not recovered and all appears to be in order, the actual cash value of the automobile is the basis of settlement.
• The ownership and keys are turned over to the insurer.
• The police are advised in case the automobile is later recovered.
• When the entire automobile is stolen and the appropriate coverages are carried, most policies cover substitute transportation beginning after a period of 72 hours and continuing for a limited period of time until a settlement is reached.
• The insured will want to know how long payments will continue and how much will be paid on a daily basis for a rental automobile.

Question 35

Would a deductible apply to a theft claim? How would the policy respond?

Answer 35

• Would pay a deductible. In Ontario, the deductible under the comprehensive own vehicle damage coverage applies in such claims.
• The loss adjuster must make certain that any specific equipment stolen is covered.
• Some policies specify that audio equipment must have been attached to the automobile for the policy to cover its theft.
• The loss adjuster should verify the quality of the equipment.
• Merchants who sell and install equipment can be very helpful in confirming how certain equipment is installed.