C14 Ch 1-4

Question 1

Describe the three levels of legal jurisdiction in Canada

Answer 1

Federal jurisdiction - the federal government deals with matters that affect all of Canada, such as criminal law, trade between provinces, telecommunications, customs and immigration, and fisheries

Provincial jurisdiction- the provinces and territories make laws in such areas as education, property, and health services they also set out rules if the road. This includes speed limits, stop signs ect.

Municipal jurisdiction - municipal governments can make bylaws dealing with local matters, such as zoning, smoking, animal control, and the issuance of construction permits

Question 2

Why was automobile insurance created?

Answer 2

Owners of automobiles stand to incur costs if their vehicle is damaged in an accident or if it burns or is stolen. There is a greater potential for expenses if injury or death results from an accident. Such a large debt would be impossible to pay and be a life long burden and could stand in the way of personal happiness and financial success. Another consideration is the threat of a potential lawsuit.

Question 3

Explain how laws requiring mandatory automobile coverage led to the evolution of standard automobile policy forms across Canada

Answer 3

Laws in Canada’s provinces and territories determine the types of mandatory coverage and the wording of the automobile insurance policy forms used to provide coverage. This led to the evolution of standard policy forms. These insurance policy forms are designed to be used by different insurers and have exactly the same provisions, regardless of the insurer issuing the policy.

Question 4

Name the 7 SPF ( standard policy form)

Answer 4

SPF 1 - Standard owners policy - provides coverage for owners of vehs that are used for commercial of personal purposes

SPF 2 standard drivers policy - provides coverage for drivers who are driving vehs they do not own

SPF 4 standard garage policy - provides certian types of coverage for auto related parking operations, with coverage for owned vehs, non owned vehs, and customers autos

SPF 6 - standard non owned auto policy - provides non owned auto insurance where there is a responsibility for the use and operation of non owned vehs

SPF 7 - excess auto policy - provides excess insurance for liability exposures for use along with SPF 1,2,4 and 6

SPF 8 lessors contingent auto policy - provides contingent insurance for businesses that lease veh on a long term basis

SPF 9 transportation network policy - covers accidents that arise from the use or operation of the automobile as a transportation network

Question 5

Note the difference between contingent and excess insurance

Answer 5

Contingent insurance refers to a policy that is contingent on the absence of other insurance and does not apply if there is another policy providing coverage

Excess insurance is a policy that will begin paying when all other similar insurance on the same subject is exhausted, or the loss exceeds a previously agreed upon amount.

Question 6

Describe what constitutes proof of insurance

Answer 6

Motor vehicle liability cards are designed to serve as proof of automobile third party liability insurance. Most insurereds in Canada are required to have a physical copy of the card, but there are incentives to bring electronic cards into use, as in the United States.

Question 7

What does the motor vehicle liability card display ?

Answer 7

Name and address of insured 
Name and address of insurer 
Name and address of agent/broker
Description of insured vehicle 
Policy number
Effective date and term of the policy

Question 8

When is proof of financial responsibility required and how is it accomplished?

Answer 8

Proof may be required to be filed either because of conviction under criminal code or Highway traffic act, or because of involvement in an accident while underinsured. It also may be required for underage drivers and elderly drivers. It’s accomplished by insurers filing a certificate with the registrar of motor vehicles showing that a motor vehicle liability card has been issued in the name of the person involved by giving a description of the vehs owned.

Question 9

Contrast tort vs DCPD systems and how they settle auto insurance claims for damages caused by third parties

Answer 9

Tort based automobile insurance systems compensate persons based on fault and provide injured parties with access to the civil Justice system to recover damages. When one person she’s it puts the onus of proof on the person suing. Except when a pedestrian is involved the motorist is deemed to be liable and it’s up to the motorist to proof they were not negligent.

DCPD - allow people to be compensated by their own insurer for damage caused by a third party.access to the civil Justice system is strictly limited or banned.Insureds cannot claim against third parties or third parties insurers. Their own insurers will indemnify them for the cost of repairs as well as damage to contents carried in the vehicle and it’s loss of use to the extent they are not at fault.

Question 10

What is the ultimate aim and secondary aims of DCPD

Answer 10

Ultimate aim: cost savings that result in lower premiums
Less investigation
Less subrogation
Less litigation
Speedier settlements for insureds
Insureds deal only with their own insurer

Question 11

Explain how claims for vehicle damage caused by a third party are compensated under third party liability coverage

Answer 11

Automobile third party liability insurance is designed to provide protection for legal liability imposed by law upon the insured for bodily injury or death of any persons or damage to property belonging to other person’s arising out of the ownership, use, or operation of an automobile.

Question 12

Exclusions under third party liability coverage

Answer 12

• liability imposed on an insured by a workers compensation law
• loss or damage to an employee of an insured who is engaged in operating or repairing the automobile.
• damage to property carried in or on the automobile or damage to other property owned, rented by, in the care of, custody, or control of the named insured or other insured persons
• contamination of property being carried
• amounts over the policy limits purchased.

Question 13

Summarize the additional coverage available under third party liability coverage

Answer 13

The additional coverage agreements require the insurer to:

• pay all costs taxes against the insured and interest on any part of the judgment that is within the limits of the policy after the judgement has been rendered
• reimburse the insured for any outlay for necessary medical aid at the time of the accident causing injury
• investigate, negotiate, and settle claims on the behalf of the insured or other insured persons
• defend the insured and pay the cost of civil action
• be liable up to the minimum limits prescribed in the province or territory where the accident occured if that limit is higher then the policy limits
• do not defend against a claim that would bit defend the policy were issued in the province or territory where the accident occured

Question 14

Under additional third party liability coverage what are the responsibilities of the insured?

Answer 14

1. Agree to the insurer being appointed as the insureds attorney to conduct civil defense in actions arising out of the ownership, use, or operation of the automobile.
2. Reimburse the insurer upon demand for any payments it was required by law to make, even though it was not otherwise liable for them under this policy - this can arise due to absolute liability provisions of the law.

Question 15

Explain how absolute liability means the insurer is responsible for paying third party claims even though the insured has breached a policy condition

Answer 15

The insurance acts of the provinces and territories contain absolute liability provisions so that the right of any third parties to payment under a policy in a judgment against van insured will not be prejudice by:

• any assignment, waiver, surrender, cancellation, or discharge of the policy by the insured after the event giving rise to a claim
• any act or default of the insured before or after the event in violation of the act or the policy
• any violation of the criminal code or statute of any province or territory by the owner or driver of the automobile

Question 16

What is the best defense for insurers against absolutely liability claims

Answer 16

Establish effective risk management practices before coverage is bound

Question 17

Explain how vehicle damage caused by third parties are compensated under DCPD

Answer 17

Under DCPD insureds deal with their own insurers for claims for damage to their own vehicle. Insureds cannot claim against third parties or third parties insurer. Their own insurers will indemnify them for the cost of repairs , as well as damage to contents carried in the vehicle and it’s loss of use to the extent that they are not at fault. If insureds have bought own damage coverage it will cover for the damage they are at fault.

Question 18

What are the circumstances in which subrogation is allowed under DCPD

Answer 18

• When someone who is in a business relating to automobiles
• for damage that occurs when an automobile is being towed, if the tow truck driver is negligent
• if the contents loss is over 20,000, an insurer may recover from the insurer if the at fault party

Question 19

What is inverse liability and where does it apply

Answer 19

In BC inverse liability coverage is party of their basic plan. It covers BC insureds who are involved in a collision where local laws prevent then from seeking compensation from the at fault driver after the crash and insureds are responsible for paying the costs of repairing their own vehicles.

It only covers damage. The coverage provided is to the degree the driver is not at fault.

Question 20

Summarize the coverage provided by the accident benefits section of the owners policy

Answer 20

Subsection 1: medical benefits
Subsection 2 part 1: death, grief counselling, funeral
Part 2: total disability
Subsection 3: uninsured motorist cover

Question 20

Summarize the coverage provided by the accident benefits section of the owners policy

Answer 20

Subsection 1: medical benefits
Subsection 2 part 1: death, grief counselling, funeral
Part 2: total disability
Subsection 3: uninsured motorist cover

Question 21

What does subsection 1: medical payments under accident benefits cover?

Answer 21

Medical treatments
Surgical treatments
Chiropractic services 
Dental services 
Hospital services
Psychological services
Physical therapy
Occupational therapy
Massage therapy 
Acupuncture
Professional nursing
Ambulance services

Question 22

What kind of injuries does DTPR or diagnostic and treatment protocols regulation apply to?

Answer 22

Types of injuries include: sprains, strains, whiplash, temporomandibular joint injuries and related physical or psychological symptoms. The DTPR outlines general approach for treating minor injuries.

Question 23

Limits that apply to subsection 1:medical payments

Answer 23

50,000 per person
750 for chiropractic services
250 for massage therapy and acupuncture

Question 24

Subsection 2 part 1 what does it cover ?

Answer 24

This section of accident benefits pays a death benefit if an insured person dies as a result of an automobile accident and is survived by at least 60 days by a spouse or one or more dependants. Benefits are paid in a lump sum

Question 25

What are the sums payable for spouse or adult interdependent partner, dependants under 5 or over 69, dependants between 10 and 17, and dependants of all other ages

Answer 25

10,000 for the spouse or adult interdependent partner
1,000 for dependants under 5 or over 69
3,000 for dependants between 10 and 17
2,000 for all other dependants

Question 26

Qualifications for total disability benefits

Answer 26

• The insured person was employed at the time of the accident or was working for any 6 months during the 12 months preceding the accident ( for persons 18 and older)
• with in 60 days from the date of the accident, such injury prevents the insured to preform any and every duty pertaining to the insured persons occupation or employment
• if required by the insurer, the disability of the insured person must be certified by a duly qualified medical practitioner

Question 27

Under accident benefits what is an insured person defined as

Answer 27

• Any occupant of the described automobile, newly acquired, or temporary substitute automobile, or while a pedestrian, who is struck, in Canada by such a vehicle
• the insured, spouse, and dependants of either, living in the same household, while the occupants of any other automobile or while a pedestrian who is struck by an automobile provided

They are not engaged in selling, repairing, storing, or parking automobiles at the time of the accident
The automobile is not owned or regularly used by them nor is it owned hired or leased by their employees
The automobile is not used for carrying passengers for compensation

Question 28

Exclusions to accident benefits

Answer 28

• the person commited suicide or attempted suicide
• the person’s injury or death was caused directly from sickness or disease
• the person is entitled to workers compensation
• the person was using the automobile in a race or speed test
• the person was using the automobile for any illicit or prohibited trade or transportation

Question 29

The insurer will not pay for anything under subsection 2 part 2 for the following reasons

Answer 29

Injury to the driver who is convicted for driving while impaired

• injury by any person driving the automobile who is under the minimum age required for acquiring a driver’s licence
• injury or death of the driver not authorized by law or qualified to drive

Question 30

When is money payable under accident benefits?

Answer 30

Within 60 days after the insurer has recieved proof of claim involving medical payments, funeral benefits, or death benefits

Within 30 days after the insurer has recieved proof of disability claim involving weekly benefits and then every 30 days after that if the insurer remains liable for payments, if the insured person supplies proof of continuing disability when requested by the insurer.

Question 31

Outline the indicators of accident benefits fraud associated with injury claims

Answer 31

Insurance fraud often involves groups of people who work together in what is known as a fraud ring. Automobile collisions typically happen between 2 vehs producing many claimants who may be eligible for accident benefits. When individuals participate in fraud rings they may be involved in multiple accidents in different vehicles.

Question 32

Indicate service provider billing fraud

Answer 32

• Patterns for services that are outside the provincial standards
• services that were never proven as provided to the claimant
• services that were billed repeatedly
• services that were billed out side of normal business hours
• treatments that were not administered by a licensed therapist
• the listed therapist is no longer employed by the firm
• the need for services is mis represented

Question 33

Indicate service provider billing fraud

Answer 33

• Patterns for services that are outside the provincial standards
• services that were never proven as provided to the claimant
• services that were billed repeatedly
• services that were billed out side of normal business hours
• treatments that were not administered by a licensed therapist
• the listed therapist is no longer employed by the firm
• the need for services is mis represented

Question 34

Outline the limitations for coverage provided by the owners policy for accidents caused by uninsured or unidentified automobiles

Answer 34

• There is no liability to anyone who can recover from an unsatisfied judgement fund or similar fund
• there is no liability to anyone attempting settlement directly with out the written consent of the insurer
• the insurer is liable for lesser of the minimum limits where the accident occured or the min limits in AB
• payments made under this subsection are used to reduce any amount the insurer may be entitled to recover from any person who is insured under section A third party liability of the insureds policy.
• the insurance company has paid benefits to the insured under the accident benefits section of the policy, those amounts can be deducted from the settlement under uninsured auto coverage.

Question 35

Describe how the family protection endorsement provides coverage for damage caused by inadequately insured motorist

Answer 35

This endorsement applies when the insured cannot fully recover from his or see damages for bodily injury or death caused by a negligent third party it covers the difference between the value of the I shreds claims and the third party liability limit. When the third party is at fault it covers the short fall when the third party is inadequately insured to cover the insureds claims or when the third party is uninsured.

Question 36

Describe how motor vehicle accident claims funds are payers of last resort for people injured in automobile accidents with no other existing automobile insurance to pay their claim

Answer 36

This is considered payers last resort because they provide compensation to people injured in automobile accidents when there is no other existing coverage automobile insurance to pay their claim.