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CIP C14 - Auto - Final Exam
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CIP C14 - Auto - Final Exam
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CIP C14 - Auto - Final ExamWhy Automobile Insurance was created - CORRECT ANSWER--Mass
production made vehicle more affordable
-Vehicles can now go fast and roads are built better so higher potential for loss
-Costs due to injuries or death arising from auto accidents increased
-Society is more and more litigious
What happens when someone doesn't carry auto insurance - CORRECT
ANSWER--Fine for drivers who do not carry valid insurance (Ontario $5k-$50k)
-Driver's license suspended and vehicle impounded
-May not have access to AB
-Be held personally liable and lose ability to sue at-fault party
8 Standard Policy Forms - CORRECT ANSWER-SPF 1 - Standard Owner's
Automobile Policy (owner of veh)
SPF 2 - Standard Driver's Auto Policy (driving veh don't own)
SPF 4 - Standard Garage Auto Policy (repair shop)
QPF 5 - Complementary Insurance for Damage Caused to Insured Vehicle Form
(like OPCF 43)
SPF 6 - Standard Non-Owned Automobile Policy (responsible for use and
operation of non-owned veh)
SPF 7 - Excess Automobile Policy
SPF 8 - Lessor's Contingent Automobile Policy (business lease veh long term)
SPF 9 - Transportation Network Policy (ex: Uber)
Tort System - Settling automobile insurance claims - CORRECT ANSWER--Tort
systems compensate victims based on TP's fault/negligence
-Can go to civil justice system to recover damages
-Aim to compensate based on the degree they are not at fault
-Onus of proof on person claiming other negligent (except in case of pedestrian)
-Driver's fault charts are used to settle common accident types without the courts
Direct Compensation System - Settling Automobile Insurance claims -
CORRECT ANSWER--Compensated by their own insurer for damages caused
by third party
,-Aim is less investigations, subrogation, litigation
-Faster settlements which in turn gives cost savings
-Access to civil justice system is limited/banned
-Insureds cannot claim against TP's
-Negotiates with own insurer
Negligence definition - CORRECT ANSWER--Failure to use the degree of care
expected from a reasonable and prudent person
Automobile Third Party Liability Insurance Covers: - CORRECT ANSWER--Legal
liability for bodily injury or death of any person
-Damage to property of others due to your ownership/use of your veh
-Insured persons
*are minimum limits
*law also provides priority of payments
Automobile Third Party Liability Insurance Exclusions - CORRECT
ANSWER--Damage to property carried in or upon the automobile
-Damage to other property owned or rented by, or in the care, custody or control
of insureds
-Contamination of property being carried
-Nuclear hazards
-Amounts over the policy limit purchased - other than legal costs and
post-judgment interest
Additional Coverage Available Under Third Party Liability - CORRECT
ANSWER-1. Pay all costs taxed against insureds within limits of policy
2. Reimburse the cost of medical aid
3. Investigate, negotiate, and settle claims
4. Defend insureds
5. Pay up to minimum limits of province where accident happened
6. Follow the law of the jurisdiction
7. Protect insureds for liability claims
Responsibilities of Insured Persons - CORRECT ANSWER-1. Notify insurer in
writing within 7 days of loss or damage
2. Give insurer a statutory declaration
, 3. If asked help the insurer with the investigation
4. Do not assume liability
5. Reimburse the insurer for any payments required by law
Rental Vehicles Order of Liability - CORRECT ANSWER-1. Person who rented
the automobile
2. The driver of the automobile
3. The owner of the automobile
Non-Economic Losses - CORRECT ANSWER--Payment for loss or harm can't
be quantified money (pain and suffering)
-Lawsuits subject to a per-person deductible
-Insureds in Ontario can purchase OPCF 48 to offset tort deductible
-Changes to Ontario auto insurance legislation where claimants can sue for
non-economic damages if they suffer from:
1. permanent serious disfigurement
2. permanent serious impairment of an important physical, mental, or
psychological function
Economic losses - CORRECT ANSWER--Damages or loss that can be
quantified in money
-Right to sue without need to meet a threshold
-Recovery for loss of income and loss earning capacity limited to 70% income
more than 7 days after the accident and up to date of trial
-Post-trial, recovery for future losses is on a 100% basis
Absolute liability - CORRECT ANSWER--requires insurers to pay TP claims up to
provincial min limit even if insured have breached a policy condition
-Only protects TP claimants
Absolute liability means TP's rights to payment are not prejudiced by -
CORRECT ANSWER--Any cancellation of policy after claim
-Any act or default of insured before or after event
-Any violation of the Criminal Code
Best Defence - Absolute Liability - CORRECT ANSWER--Effective risk
management before binding
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