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Flashcards in Chapter 2 - Legal Concepts Deck (11):

What are the four legal concepts that regulate the settlement of auto accident claims?

1) negligence
2) onus of proof
3) subrogation
4) absolute liability


Define negligence.

- is the omission to do something which a reasonable person guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable person would not do.


Define liable.

- means legally responsible


What does legislation state about who is liable if you lend your car to a friend?

1) the owner of the auto
2) the driver of auto
3) lessee of auto

- if you lend a car to your friend and he gets into an accident for which he is at fault, the owner/lessee are just are legally responsible for the accident as the driver is
- but the driver must be operating the auto with the consent or implied consent of owner/lessee



Define onus of proof.

- means the burden or responsibility of proof, and is also known as "onus probandi"
- is related to the concept of negligence
- when one person sues another, the law puts the onus of proof upon the person suing (the plantiff)
- therefore, the one who alleges the other motorist is negligent is required to prove that negligence

- one exception is an accident involving a pedestrian or cyclist, the motorist presumed to be liable must prove that he/she was not negligent


How is fault determined?

- by fault charts or a similar fault assessment process
- fault charts are based on precedent set by decisions for accidents that have previously happened


Explain subrogation.

- an insurer who pays to repair an insured's car that was damaged by a 3rd party, has the right to recover from the at-fault 3rd party
- right of subrogation can be limited or removed by legislation (in Ontario)


Define subrogation.

- is the transfer of legal rights (to an insurer) of someone whose debts/expenses have been paid to pursue recovery from an at-fault party


Explain absolute liability.

- legal concept that can influence settlement of auto insurance claims
- the insurer is responsible to pay 3rd party claims even though the insured has breached a policy condition
- 3rd parties are given a direct right of action against the insurer to have the insurance money under the policy paid directly to them
- some jurisdictions require a judgment to be obtained in the favour of the 3rd party before money will be awarded
- insurer has legal right to recover from its own insured any amount paid by reason of absolute liability
- insured may find it difficult to obtain future insurance until they have repaid any amounts their insurers paid due to absolute liability provision
- insurers are only obligated to pay up to the minimum limits of insurance in the jurisdiction involved, even if policy has higher limits
- best defense for insurers against absolute liability claims is to do a thorough research before they bind coverage


What does SECTION 258 (1) - application of insurance money, 3rd party claims, etc and SECTION 258 (4) - insurer absolutely liable contain?

The right of a person who is entitled to have insurance money applied upon the person's judgment or claim is not prejudiced by:

1) an assignment, waiver, surrender, cancellation or discharge of contract made by the insured after the happening of the event giving rise to a claim under contract
2) any act or default of the insured before/after that event in contravention of this part or the terms of the contract
3) any contravention of the criminal code or a statute of any province/territory in Canada or of any state/district of Columbia of the USA by the owner or driver of the auto


Explain negligence.

- is the fialure to do what a reasonable and prudent person would do
- its doing what a resonable and prudent person would not do
- legislation states that a negligent person in an auto accident is liable (legally responsible) for damage/injury caused