Study five Flashcards
Define plantiff.
- one who brings a lawsuit against another
Define defendant.
- one who is named in the lawsuit
- one who is being sued
What is the basic policy form in most provinces? and what is it in Ontario?
- Standard Auto Policy (SPF)
- in ont its known as the OAP#1
What are the 3 ways auto insurance is marketed in canada?
1) independent agents/brokers selling on behalf of various companies
2) direct writing companies through captive agency sysyems
3) provincial government crown corporations specifical;y set up for this purpose, and may be represented by agents/brokers
Explain the different ways auto insurance is used across canada.
1) BC, sask, manitoba have compulsory monopolistic government insurance plans that provide basic coverages
- private industry is permitted to offer certain additional coverages and specialty policies
2) Quebec has a unique system where certain compulsory coverages are provided by the government plan and other coverages provided by private industry
3) Everywhere else insurance companies compete for auto insurance both through direct writing and independent agents/brokers
Define extension policy.
- provide coverage over and above that provided by the basic compulsory gov plans
- are often used to increase limits or reduce deductibles
- may be issued by gov insurer or private insurer
What 3 purposes does the auto application serve?
1) identifies particulars of the contract
- applicant, insurer, agent info (name and address)
- agreements of applicant (what coverage, # of drivers)
2) confirms details of coverage
- policy period, coverage, premiums, endorsements
3) documents info required to underwrite and rate the auto exposure
What is typical information requested on an application for insurance on an auto?
1) identifies applicant
- drivers abstract
2) policy period
- states day, month, and year of policy inception and expiry
- coverage ends at 12:01 am
3) particulars of described auto
- year, trade name, serial and model number
- if there is a lienholder name and address must be given to individual whom debt is owed
4) coverages
- TPL, AB, own damage, UMC, endorsements
5) use of vehicle
- pleasure vs business
6) drivers
- names of all drivers
- # of years each has been licensed
- driver training courses
- approx % of use of each vehicle
7) impairments of persons operating auto
- pertaining to physical or mental abilities which might affect the safe operation of an auto
- history of heart attacks
8) past license and insurance experience
- of applicant and other drivers withint same household on application
- insurers can make checks with motor vehicle department
- cancelled, declined, refused to renew insurance within past 3 years for applicant and household drivers
9) accidents and claims
- arising out of the ownership or operation of any auto within the past 6 years
10) asks about registered owner and actual owner
- help determine who the principal operator of auto is
- whose name auto is registered
- who has actual custody and control of auto
11) signature of applicant
- warrant the truth of statements made in application
12) importance of correct info and implications - penalty clause
- if policy is issued on basis of incorrect info and there is a loss, the insured forfeits right to claim under policy
13) applications must contain a statement regarding certain information they need to acquire upon renewal, extension or variation thereof.
- must be bold type or underlined
- certain specified font size
What is the summary of an application?
1) identifies parties to contract and the coverages
2) identifies vehicle(s) involved and their use
3) identifies the drivers and their experience
4) obtains background info on past insurance, license and driving records, and claims history
5) states the warning about misrepresentation or fraudulent dealings pertaining to the application or claims
6) advises applicants that personal info may be sought relating to the application
How is auto rating kept fair and equitable?
- premiums of many pay for the losses of few
- premium should commensurate with the risk
- mandatory auto insurance should be affordable for all
- rating criteria should be non-discrimnatory
What is the rating criteria based upon?
RATING CRITERIA FOR DRIVERS
1) age, gender, marital status
- stats indicate there is a definite relationship to loss frequency
2) driving experience
- years licensed, driver training, newcomer to canada
3) driving record
- accidents and traffic violations within past 6 years
- if so was applicant previously insured, by whom
- did any accidents involve damage/injury for which an amount was paid
4) other regular drivers
- similar details are needed on all regular drivers of vehicle
- percentage of use by each person per vehicle
RATING CRITERIA FOR VEHICLES AND OPERATION
5) vehicle usage
- business vs pleasure
6) vehicle description
- year, make, model, serial number of vehicle
- can indicate value of vehicle, type of body, give clues to possible usage and loss potentials
7) territory and distance driven annually
- country is divided into rating territories
- regularity and distance driven affects extent to which a vehicle is exposed to loss
- mileage
8) coverage
- final factor in determining the total premium for the policy is the chosen coverage
What is the facility association and how does it work?
- a non-profit unincorporated association of insurers which is funded in proportion to the auto insurance written in the province
- is the residual market for those who cannot obtain coverage from standard auto insurers
- certain companies are designated as servicing carriers who administer policies and claims which are funded by the FA members
- when brokers have difficulties arranging insurance for a client in the open market, they are able to use FA
