C14 Auto Insurance Study Guide PDF

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2018/2019 (C14) Auto Insurance Part 1 COMPREHENSIVE STUDY GUIDE ALL CHAPTERS ***NOTE: In order to view the notes for each Chapter - Please ensure that you click the arrow beside each chapter heading which will drop the information down.***

C14 - Chapter 1 Terms Identify the TWO (2) distinct

Definitions the common law and Quebec civil law

legal systems used in Canada. Why is common law also called

"judge-made law?" What is the Civil Code of

Quebec?

the principle of precedent based on previous

judgments is legally binding in courts the legal system used in the Quebec, it is

based on canon law and the customs of the Code Napoleon

Give an example of a law that

municipal - parking bylaws

has been enacted with respect to the

provincial - speed limits

operation of an automobile by each of

federal - criminal code regarding impaired driving

the three levels of government in Canada. What coverages were first

injury and property damage to others

provided by automobile insurance policies? Why did the provinces establish

there was too much fine print in policies

mandatory policy wordings for automobile insurance policies? How has automobile insurance

developed along with the automobile?

increased traffic, more accidents and higher

repair costs have led to a complex insurance

2018/2019 (C14) Auto Insurance Part 1 COMPREHENSIVE STUDY GUIDE ALL CHAPTERS product In which province is Accident

Newfoundland and Labrador

Benefits optional? How is automobile insurance

marketed in Canada? In which provinces is automobile

it is sold through either private insurance

companies or provincial crown corporations Saskatchewan, Manitoba and B.C.

insurance operated by a Crown Corporation? Who decides on the wording of

wordings are governed by each province

an automobile policy? What does SPF, OAP and QPF

stand for in automobile policy forms?

To what extent, if any, are

automobile policies in Canada subject to standard policy forms and standard endorsement forms? Where crown corporations

provide automobile insurance, what takes the place of the insurance policy? What are the SIX (6) main

automobile policies?

SPF - standard automobile policy

OAP - Ontario Auto Policy QPF - Quebec Policy Form some provinces use different prefixes to

identify their policies while government plans require endorsements to be standard and approved form a motor vehicle certificate of registration is

issued and serves as the owner's certificate of insurance

SPF1 - standard auto policy, OAP1 - Ontario

Auto Policy (owners policy) SPF2 - coverage for

2018/2019 (C14) Auto Insurance Part 1 COMPREHENSIVE STUDY GUIDE ALL CHAPTERS drivers who are driving vehicles they do not own, OAP2 - drivers policy. SPF4 - standard garage auto policy, OAP4 - garage policy Who decides what the rules for

Provincial governments

the operation of automobiles should be? What provincial legislation

Ontario highway traffic act

embodies the majority of rules relating to the operation of automobiles? Name the THREE (3) distinct

first party - protected by policy

types of automobile coverages

second party - provides the insurance

available.

third party - anyone else involved in a motor vehicle accident

What is "financial responsibility"

it is the ability to pay if responsible for injury

as it relates to the operation of automobiles? How do you file proof of

financial responsibility?

an insurer files a certificate with the Registrar

of Motor Vehicles showing that a motor vehicle liability policy has been issued

What constitutes proof of

a pink card is a proof of liability policy

financial responsibility? What is another term for "own

damage" coverage?

no-fault is another term for own damage

coverage.

2018/2019 (C14) Auto Insurance Part 1 COMPREHENSIVE STUDY GUIDE ALL CHAPTERS

C14 - Chapter 2 Terms What is "negligence"?

Definitions negligence is an act that a

reasonable and prudent person would not do or an omission to do something said person would do. What are the consequences of

negligence in the operation of a motor vehicle?

a negligent person would be liable

for damages caused by their actions

What is "onus of proof?

the burden of responsibility to prove

How is onus of proof determined?

the plaintiff has the responsibility to

prove guilt In most cases, on whom is the onus of

the plaintiff has the onus of proof

proof? Explain "subrogation."

it is the right to recover from a

responsible party through the transfer of legal rights Who has the right of subrogation?

the party that pays for damages has

the right to subrogation. What gives the right of subrogation its

validity? How can provisions be made to account for exceptions?

it allows the insurer to recover funds

from the at-fault party.

2018/2019 (C14) Auto Insurance Part 1 COMPREHENSIVE STUDY GUIDE ALL CHAPTERS What is "absolute liability"?

the insurer is responsible to pay

third party claims even though the insured has breached policy condition it is necessary so that third party

Why are the absolute liability provisions of

the law necessary?

rights are not prejudiced by insured's actions

Who derives the greatest benefit from the

absolute liability provisions?

innocent third parties are protected

under the absolute liability provisions

What does an insurer pay to a third party

under the absolute liability provisions?

the insurance money under a policy

is paid directly to the third party no, the insurer has a legal right to

When an insurer pays a third party

judgment under the absolute liability provisions of a policy, is that the end of the matter as far as the insured is concerned? Explain

recover from its own insured any amount paid by reason of absolute liability

What precautions can an insurer take to

the insurer is only obligated to pay

minimize its exposure to claims arising out of the absolute liability provisions?

up to the minimum limits of insurance in effect in the jurisdiction involved, even if the policy has a higher limit

C14 - Chapter 3 Terms Why is there often confusion

Definitions insurers define no-fault as the insured recovers

with respect to how consumers

from them after a loss whereas consumers think it

and insurers define no-fault?

relates to whether their premiums increase

2018/2019 (C14) Auto Insurance Part 1 COMPREHENSIVE STUDY GUIDE ALL CHAPTERS What TWO (2) distinctions

must be made when considering

vehicle damage and injuries must be considered

separately.

no-fault concepts? What early agreements used

"knock for knock" agreements. each insurer paid

the original concept of no-fault

for repairs to its own policyholders regardless of who

automobile insurance?

was at fault.

What are the aims of no-

fault automobile insurance?

1. less investigation 2. less subrogation activity. 3.

less litigation 4. speedier settlements for insureds 5. insureds deal only with their own insurer 6. costs savings which result in lower premiums.

How is fault determined for

premium chargeability in Quebec?

Quebec - driver's fault chart

Ontario/NB - fault determination rules

In Ontario? In New Brunswick? To which type of automobile

insurance coverage was the no-

no-fault concepts were first applied towards

injuries.

fault concept first applied in Canada? What auto policy coverages

are the forerunners of present day

accidents benefits coverage evolved from

medical expense coverage from the 1940s.

no-fault plans? What is a "threshold" as it

relates to auto insurance?

it is the degree of injury a claimant must establish

before being allowed to commence a legal action against the responsible party

What provinces presently

Quebec, Manitoba and Saskatchwan. Ontario

2018/2019 (C14) Auto Insurance Part 1 COMPREHENSIVE STUDY GUIDE ALL CHAPTERS have no-fault plans?

has a threshold no-fault plan

What provinces allow no

suits for injury?

Quebec and Manitoba have completely banned

lawsuits

What provinces allow suits

in certain circumstances only?

Ontario allows conditionally lawsuits for injured

parties.

C14 - Chapter 4 Terms What is the purpose of an automobile

insurance application? Who regulates automobile insurance

forms and under what authority?

Where can one find the rules regarding

Definitions the gathering of information used to

formulate a policy The superintendent regulates auto

insurance forms under the Insurance Act of Ontario The insurance act of Ontario.

automobile applications and policies? Is it mandatory to obtain a signed

application before an automobile policy is issued? Explain. What are the disadvantages of an oral

application? If an insurer issues a policy with a lower

limit than the insured asked for in the written

no it is not required but a signed

application must be returned to the insurer after it is sent an oral application is harder to prove

in cases of misrepresentation the insurer must point out what ways

the policy differs from the application in

2018/2019 (C14) Auto Insurance Part 1 COMPREHENSIVE STUDY GUIDE ALL CHAPTERS application, what must the insurer do? If an insured receives a policy that does

writing. the insured has 7 days to object to

not correspond to the written application, what

changes by writing to the insurer or he can

are the insured's options?

accept the policy by not responding

On whom is the onus of proof if a

misrepresentation is suspected? List the TWELVE (12) information

the onus is on the insurer to prove

misrepresentation 1. applicant's name and postal address 2. policy period

sections found in an application for automobile

3. described automobile(s)

insurance.

4. driver information 5. previous accidents and insurance claims 6. convictions 7. rating information 8. insurance coverages applied for 9. remarks 10. method of payment 11. declaration of applicant 12. report of broker/agent

When does an automobile policy

commence and expire?

it commences and expires at 12:01

am, local time at the postal address stated.

Why is it important that the application

contain an accurate description of the

it is important for rating purposes as

well as identification in the event of a claim

automobile to be insured? What information is required regarding

past convictions?

automobile related convictions of the

past 3 years. the date and description for each conviction.

2018/2019 (C14) Auto Insurance Part 1 COMPREHENSIVE STUDY GUIDE ALL CHAPTERS Why does the application ask for past

insurance experience of the applicant and

it is used to confirm any material

misrepresentations.

other drivers? Why is it important to the insurer that

information regarding the use of the vehicle is

different vehicle uses have higher

risks of loss.

provided? What is the difference between the

registered owner may be a user of

registered owner of a vehicle and the actual

the vehicle but an owner actually paid for

owner?

the vehicle

Who has an insurable interest in the

vehicle?

the owner of the vehicle has an

insurable interest not to have it damaged or destroyed.

Is there an insurance benefit to

it may result in lower premiums but

registering your vehicle in your parents' name

the issue of ownership and absolute

if you are underage? Explain. What problems

liability may arise down the road

could arise? Who is not an insured under an

automobile policy, according to the Insurance

anyone who is not named on the

application as a driver of the automobile.

Act? What does the application say with

the insured must "knowingly"

respect to the misrepresentation of facts on an

misrepresent or fail to disclose any fact

automobile insurance application?

required to be stated in the application.

What types of problems can arise when

an application contains incorrect information,

it could give rise to legal implications

when a claim is made.

2018/2019 (C14) Auto Insurance Part 1 COMPREHENSIVE STUDY GUIDE ALL CHAPTERS even though there was no intent to defraud or mislead? Summarize the rating information

requested in an automobile application.

the summary of information from

sections 1-6 in the application is used to calculate the premium.

Why is it necessary for insurers to

include the item regarding obtaining personal

it allows the insurer to obtain relevant

information e.g. past records

information about the applicant? What coverages are mandatory, and

which ones are optional?

liability, accident benefits, uninsured

automobile and direction compensation property damage is mandatory. loss or damage coverage and family protection is optional.

Why is it important that applicants sign

applications?

it demonstrates that they have

declared on information on the application to be true.

What are the insurer's obligations with

the insurer has an obligation to make

respect to providing a "policy" to an insured?

sure that all information o the application

Explain.

is correct and true.

Are insurers permitted to issue a policy

that differs from a written application? Explain.

insurers are permitted to issue a

policy that differs and the insured has the option to accept or reject it

Discuss how a misrepresentation can

occur with an OAP1?

agents/brokers fill out most

applications and an omission or error in the application could lead to a

2018/2019 (C14) Auto Insurance Part 1 COMPREHENSIVE STUDY GUIDE ALL CHAPTERS misrepresentation.

C14 - Chapter 5 Terms Who has an insurable interest in an

automobile policy?

Definitions the named insured has an insurable

interest in the auto policy as he/she is the registered owner.

Distinguish between a "named

a "named insured" is the registered

insured" and an "insured" under an

owner whereas "insured" can be an person

automobile policy.

who is insured to use the automobile.

Where is the legal basis for liability

it is stated in the Highway Traffic Act.

arising out of motor vehicle accidents stated? What does Liability coverage include?

provides protection for injury to others

(Bodily Injury) and damages to the property of others (Property Damage) Who is insured under the Liability

coverage section of a policy? Why is having an adequate amount of

liability insurance important?

the named insureds and persons

insured in the policy are covered the average cost of injuries and

property damage is constantly increasing. without adequate insurance, financial ruin is a possibility.

What types of losses are not covered

under the Liability section of a policy?

other property carried in the vehicle,

contamination of property carried in vehicle

2018/2019 (C14) Auto Insurance Part 1 COMPREHENSIVE STUDY GUIDE ALL CHAPTERS are all excluded What coverage is provided for nuclear

hazards under an automobile policy?

the policy will cover up to $200,000

where loss or damage caused directly or indirectly by a nuclear hazard.

What is Direct Compensation Property

Damage (DCPD)?

insureds only deal with their own

insurer in the case of a loss and cannot claim against third parties or their insurers

When does DCPD apply?

when there is damage to a vehicle in

which the party is not at-fault of the loss. To what extent does an insured

recover under DCPD? How is fault determined for the

purposes of DCPD? What can an insured do if he or she is

an insured can only claim if they are

100% not at-fault of the accident. the fault determination rules are used in

Ontario to determine fault. an insured can sue their own insurer.

unsatisfied with the degree of fault

they must provide evidence of "special

apportioned to him or her as a result of an

circumstances" that caused the damage.

automobile accident? When may an insured sue a third party

for damage to an insured vehicle?

they can only sue if the negligent party

is insured outside of Ontario and are not subscribed to DCPD.

Can an insurer subrogate against a

the insurer can subrogate against

garage if a mechanic test-drives an insured

automobile businesses as stated under

vehicle and it is damaged in an accident?

section 7 of regulation 664.

2018/2019 (C14) Auto Insurance Part 1 COMPREHENSIVE STUDY GUIDE ALL CHAPTERS On what authority did you base your

answer to the preceding question? Who is responsible for damages to an

the authority of the Ontario Insurance

Act. the insurer pays for damages but may

insured automobile when it is towed by a

subrogate the amount from the tower if they

third party?

are negligent.

What recovery provisions exist for

insurers with respect to contents losses?

if...