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CAIB 3 > Chapter 3 > Flashcards

Chapter 3 Flashcards

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1
Q

Explain SEF 20: Loss of Use Endorsement

A

Pay charges incurred by the insured to rent a substitute vehicle while the insureds vehicle is in the shop for repair of an insured peril

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2
Q

Explain SEF 30 - Excluding operation attached machinery endorsement

A

Removes third-party liability and accident benefits for losses arising out of equipment attached to the automobile

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3
Q

Other than Quebec, name two different systems used to insure automobiles in Canada

A

Private insurers and compulsory government insurance plans

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4
Q

Identify three types of standard policy forms that are used to insure vehicles

A

SPF No. 1 Standard Owners Form
SPF No. 4 Standard Garage Automobile Policy
SPF No. 6 Standard non-owned automobile policy

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5
Q

What is meant by “standard” policy forms

A

Standardized policy forms developed by the insurance industry

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6
Q

Identify three types of automobiles that can be insured on SPF #1

A
  1. Private passenger
    2 commercial vehicles
  2. Public vehicles
  3. Trucks and delivery vehicles
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7
Q

Identify three alternate third party liability limits that may be required by federal legislation depending on the use of the vehicles

A

1 million: outside of province use
2 million: carriers of certain dangerous goods
750K- 5million: goods transported in the US

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8
Q

Identify three sections of coverages available under SPF 1

A
  1. Third party liability
    2.accident benefits
  2. Physical damage
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9
Q

Give three examples of what would be covered under accident benefits

A

Rehabilitation costs
Funeral expenses
Loss of income

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10
Q

Identify the four coverage options available under section C physical damage

A
  1. Collision
  2. Comprehensive
  3. Specified perils
  4. All perils
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11
Q

SEF 44 provides coverage for what, caused by what?

A

For injury and death caused by uninsured or underinsured motorists

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12
Q

What is the purpose of SEF 44

A

Increases third party liability limits available to victims of accidents to the same limits purchased under their policy

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13
Q

Identify two expenses that the SEF 20: loss of use endorsement will cover:

A
  1. The rental of a substitute vehicle
  2. Taxi cabs or public means of transportation
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14
Q

When does coverage start under SEF 20?

A

Immediately when the damage is such that the automobile can’t be operated. Or if it’s stolen, the day after it is reported

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15
Q

Identify two types of vehicles to which this endorsement SEF 20 is not generally available

A

Taxi cabs and tractors

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16
Q

Identify one use of an automobile which is not deemed to be the renting or leasing of the automobile to another

A

When it is used by an employee on the business of his employer for which he is paid

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17
Q

Identify five conditions of endorsement SEF 27

A
  1. Coverage is limited to the insured or his spouse
  2. Coverage is limited to the perils the insured has on his owners form
  3. No more than 1 vehicle may be rented at a time
  4. Certain types of automobiles are typically restricted
  5. Coverage is limited to a max limit per occurrence
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18
Q

If a vehicle is rented on a short term basis in the name of a business, identify what policy would be required to provide third party liability, and the endorsement to provide legal liability for physical damage

A

Third party liability- SPF 6 (standard non-owned auto policy
Physical damage- SEF 94 (legal liability for damage to hired automobiles

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19
Q

What endorsement will be added to carry explosives?

A

SEF 4a: permission to carry explosives

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20
Q

What endorsement will be added to carry radioactive materials

A

SEF 4B: permission to carry radioactive materials

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21
Q

The policy excludes coverage when the vehicle is being used for carrying passengers for compensation or hire, identify 5 used that are NOT deemed to fall into compensation:

A

1.used by insured of his auto for the carriage of another person in return
2. Occasional and infrequent use of insureds auto for the carriage of another, who shares cost of trip
3. Used by insured of his auto for the carriage of a temporary or permanent servant of the insured or their spouse
4. The use by the insured of his auto for transporting clients or customers
5. Occasional use by a person of his auto for the transportation of children to/from activities conducted as part of an educational program

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22
Q

Outline the purpose of SEF 30: excluding operation of attached machinery

A

To exclude liability under section A and section B for the operation of certain types of machinery.
Liability will be covered under commercial liability policy, and accident benefits will be covered by workers comp

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23
Q

When SEF 30 is attached to an SPF No. 1, what coverage is deleted, and what is not deleted?

A

The liability is deleted, the value of machinery is not

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24
Q

Explain SEF 31, and its purpose

A

SEF 31: non owned equipment endorsement insures:
Third party liability from use of attached equipment and physical damage to equipment owned by others but attached to insureds auto.
Example:
-pumps
-meters
-tanks

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25
Identify two ways to write insurance on commercial vehicles
1. Schedules basis -lists each vehicle -coverages are not identical 2. Fleet basis - minimum number of vehicles 4 -they all have common ownership -rate advantages may apply
26
What are two methods for issuing fleet policies
1. Scheduled - each vehicles identified - additions and deletions reported to insured 2. SEF No 21b - owner provides insurer with schedule of all vehicles - advanced premium is charged
27
Identify two endorsements that may be used when vehicles are issued on a blanket basis
1. Blanket basis fleet endorsement 2. Monthly reporting basis fleet endorsement
28
What is meant by “retrospective rating”
A policy with a premium that adjusts based on the losses experienced by the insured during the current policy period
29
In the SPF 6 form, identify two ways coverage can be provided to a business to insure their third party liability exposure for non owned vehicles operated on their behalf
1. Separately 2. Endorsement to the CGL policy (most common)
30
Identify three groups of non owned vehicles that may be used on behalf of the business
1. Owned by employees 2. A hired automobile 3. Operated under contract for the insured
31
Identify two types of vehicles that may be “hired” by an insureds business:
1. Short term rental autos 2. Buses or vans leased long term used to transport employees or clients
32
Identify the endorsement available for SPF no 6 for hired automobiles that provides similar coverage as an SEF 27 on a SPF no1
SEF 94- legal liability for damage to hired automobiles
33
Identify the endorsement that can be attached to the SPF 6 when an insurer wishes to exclude a driver with an unacceptable driving history
SEF 98: Excluding Automobiles personally driven by named persons
34
Identify 5 types of risks, including garages, who would be a candidate for SPF 4:
1. Automobile dealers 2. Repair garages 3. Service stations 4. Storage garages 5. Parking lots
35
Although commercial liability policies can be used to insure their general liability exposures of garage risks, identify two significant exposures common to those risks that are left unprotected by that policy:
1. Bodily injury or property damage arising out of use or operation by or on behalf of the insured of any automobile 2. Coverage for personal property in the care, custody, or control of the insured SPF No. 4 is designed to insure the exposures associated with garage risks
36
Identify the five sections of coverage available under SPF 4
A. Third party liability B. Accident benefits C. Loss of or damage to owned automobiles D. Uninsured motorist coverage E. Legal liability for damage to a customers automobile while in the care, custody, or control of the insured
37
Identify two types of non-owned automobiles for which coverage is provided under section A
1. Those belonging to customers 2. Others
38
Identify what is the greatest exposure to garages for liability arising out of a non-owned vehicle under section A
Test driving customers automobiles when diagnosing suspected problems, or evaluating adequacy of repairs or servicing
39
Identify basis of premium rating for owned vehicles under third party liability
Rating is based on the insureds payroll or staffing units Subject to max 5000 per employee
40
Identify the 4 coverage options available under SPF 4 section C
1. Collision or upset 2. Comprehensive 3. Specified perils 4. Specified perils including theft
41
How will the policy deductible be applied to a collision loss under subsection C1?
Deductible is applied separately to each owned vehicle suffering a collision
42
Identify how any policy deductible will be applied to a loss under subsections C2, C3, and C4
On an occurrence basis, for example, a hail storm causes damage to an entire fleet, only one deductible will be paid. There is no deductible for fire/theft/lightening
43
Explain SEF 70
Can be used to decrease the premium for collision is vehicles are being driven by designated employees only
44
Explain the function of SEF 79
Fire and theft deductible- decreases premium by agreeing to pay a deductible on all fire and theft losses
45
Identify two basis by which owned vehicles can be insured under subsection C2, C3, C4
1. Monthly average basis 2. Co-insurance basis
46
Explain how the limit of insurance is calculated and how the premium is calculated under the monthly average basis:
The insured will select an amount of insurance that represents the max value of automobiles expected at a time. A provisional premium is charged and monthly value reports must be provided
47
List the ways an insured may be penalized in the event of a loss if the dealership is not diligent in reporting inventory levels
1 insured legal liability is limited to the amounts indicated in the last report 2. If no report was ever filed, the insurer is only liable up to 75% of applicable liability limit 3. The insurers liability limit at any one location is limited to the proportion that the values reported bear to values as actually existed on the date the report was made
48
Explain the application of co-insurance when the dealership elects to insure subsections C2, C3, Or C4, on an 80% co-insurance basis and the loss is confined to one automobile only:
Required to purchase an amount no less than 80% of the ACV of all owned auto- The insurers will waive any penalty for 1 automobile only
49
Explain SEF 73
If any vehicles are insured under a dealers floor plan, or other financing agreement, SEF 73 will remove physical damage from these automobiles
50
Identify 2 subsections of coverage under section E
1. Collision or upset 2. Specifies perils (excluding open lot pilferage)
51
Identify three ways a garage might avoid legal liability for loss to customers automobiles under section E
1. Doors and windows are locked before premises is closed 2 such doors were equipped with dead bolts 3 keys to vehicles were locked in a cabinet and in a location kept out of public eye
52
Explain how a garage would determine limits of insurance to be carried under subsection E1
Company will select the limit of insurance it believes to be the max amount it could be liable for under this subsection
53
Identify the endorsement available to broaden coverage under subsection E2
SEF 77- legal liability for comprehensive damage to customers automobiles under
54
Explain SEF 71
Excluding owned automobiles: Used to delete policy coverages on any automobile owned, hired, leased by or licensed in the name of the insured
55
Explain SEF 76
Additional insured endorsement: Removes the exclusion for the pleasure use when an automobile is provided for regular or frequent use to a person who is not a partner or full time employee of the business
56
How are auto insurance policies written in Quebec?
They purchase coverages from 2 different types of insurers: Provincial government plan covers personal injury Private insurers cover the automobile, property and accidents outside of Quebec
57
What is excluded in the Commercial General Liability policy?
1. Property damage or bodily injury from use, ownership, or operation of a vehicle by on on behalf of any insured 2. Payments for physical damage to vehicles owned or used by the insured
58
Before authority is given to operate a trucking business, what must be done?
Proof of insurance must be filed with regulatory body
59
What is included in public automobiles, and what increases their exposure?
Taxis and public busses There is increased third party liability rates, exposure increases as the number of passengers increase, owners will pay additional premium for physical damage coverage
60
What endorsement should be added to a car rental company?
SEF No. 5C permission to rent or lease. This endorsement extents coverage to lessors when the vehicle is rented or leased for less than 30 days
61
What is required if a vehicle is leased for more than 30 days?
The vehicle must be registered in the name of the lessee, with the lessor noted as secondary.
62
What are two additional coverages that can be added if a vehicle is leased longer than 30 days?
1. SPF no. 8: contingent automobile policy. - indemnifies lessor if the lessee fails to maintain vehicle insurance 2. SEF no. 5d: conversion coverage endorsement - covers losses caused by the dishonest acts of the lessee
63
What are 4 vehicle uses that coverage is excluded
-taxi -public omnibus -livery -jitney -sightseeing conveyance
64
Explain SEF No. 6a
Permission to Carry Passengers for Compensation- used for -taxis -ambulances -automobiles transporting fellow employees
65
Explain SEF no. 6b
School bus endorsement - only for school related activities
66
Explain SEF No. 6c
Revised public passenger vehicles endorsement - when vehicle is used for public transportation
67
Explain SEF 6f
Public passenger vehicles endorsement -same at SEF 6c, except third party limits apply to passenger hazard and road liability
68
Explain SEF no. 22
Provides coverage for property of passengers, it is valuable for: Taxis, ambulances, busses Coverage is only provided if the insured is liable
69
Who is covered when driving a non-owned vehicle
-named insured -partners -officers -employees Policy covers business purpose’s only
70
Name the 5 endorsements used to restrict the full blanket coverage of policy and to reduce the policy premium
1. SEF 90: Limitation to Operation of Automobiles by partners, officers and employees 2. SEF 91: Limitation to operation of Automobiles by Named Person Endorsement 3. SEF 92: Limitation to Hired Automobiles and Automobiles Operated Under Contract Endorsement 4. SEF 93: Limitation to Automobiles Owned by Named Persons Endorsement 5. SEF 99: Excluding Long Term Leased Vehicle Endorsement
71
What two things are surcharges applied to in a garaging policy
Active and inactive dealer plates Service vehicles
72
Explain the two rate tables used to determine third party liability premium
Table 1: vehicle not used for road testing, pick up or delivery of customers automobile Table 2: vehicle will be used for testing and pickup and delivery

CAIB 3 (4 decks)

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