Chapter 8 - Uninsured Auto Coverage Flashcards Preview

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Flashcards in Chapter 8 - Uninsured Auto Coverage Deck (16):

Explain Uninsured Motorist coverage.

-may be a mandatory coverage under the Standard Auto Policy (SPF 1) ( New Brunswick) or losses caused by uninsured/unidentified motorists may be covered under other policy coverages such as own damage or AB ( alberta-AB) (depending on province)
- to claim under this coverage, the insured must be legally entitled to recover loss from uninsured/unidentified motorist (meaning uninsured/unidentified motorist must be at fault.)
- determination of legal liability and amt of damages are matters for negotiation between insured and insurer
- some jurisdictions also have special funds to indemnify victims of uninsured/unident. motorists aka unsatisfied judgment funds
- some UJF cover bodily injury only, but others may also cover PD, subject to a ded., if the responsible owner/driver is unidentified
- these funds may also be used to compensate victims who do not have an auto policy of their own to claim from


Define uninsured motorist.

- is one for which neither the owner nor driver has liability insurance to cover BI/PD arising out of use, ownership, operation or insurance is not collectible
- note: this does not include an auto owned by or registered in the name of insured person or his/her spouse


Define unidentified auto.

- is one whose owner/driver cannot be determined


How does UMC work in Ont?

- gives protection to the insured by permitting recovery from his/her own insurer of amts which the insured would be entitled to recover from uninsured/unident. auto owner
- will not pay if a fund exists in the jurisdiction where the accident happens which would respond to the claim
- claims must be made against the policy
-DCPD does not apply to owned vehicle damage, since the at fault party is not insured
- if you are driving an uninsured auto, and you are hit by another auto, you are not permitted to sue the other owner even if he/she is completely at fault


What is covered?

The insurer will pay:
1) any amounts you/other insured have a legal right to recover as damages from the owner/driver of an unins/unident. auto for BI resulting from an accident involving an auto
2) any amt any person has a legal right to recover for damages from owner/driver of unins/unident auto for BI/death of an uninsured person in an accident involving an auto
3) for damage to/loss of use of auto/its contents, that you or other insured have a legal right to recover from the identified owner or driver of uninsured auto
- subject to $300 ded, and insurer will pay up to $25,000
note: damage to auto caused by unidentified auto is not covered under this section, but optional loss/damage coverages may be available


Who are the persons insured under this section of the policy?

1) with respect to death or BI
i) any occupant of the auto
ii) the insured, his/her spouse, any dependant relative of either
a) while the occupant of an uninsured auto
b) while not an occupant in an auto, streetcar, railway vehicle, if struck by an uninsured/unident. auto


What do the courts interpret "struck" to be?

- in ont supreme court decision, (Talbot V. GAN General Insurance co. 1999), it was held that physical contact is not necessary for coverage to apply under this section of the policy
- that is, if the offending vehicle came close enough to cause the victim to take evasive action and as a result suffer an injury, then the victim will be considered to be struck


What is the limitation on dependent relative include?

- a dependent relative who owns an insured auto, or who suffers BI/death while an occupant of his/her own uninsured auto is not covered under this section
- if director, officer, employee or partner, or their spouse is the owner of an auto that is insured, the policy of that auto will provide coverage, and not the policy of the corporation, association, or partnership


What happens if a policy has been changed to allow the rental or lease of the described auto for more than 30 days

- the person or organization who is the lessee of the auto is treated at the names insured
i) with respect to damage to auto, the owner
ii) with respect to contents of auto, the owner of the contents


How do claims for BI or death work under this coverage?

1) If the 3rd party is unidentified:
i) the accident must be reported to the policy within 24 hours, or as soon as practicable
ii) the insured must give the insurer a written statement within 30 days, setting out details of the accident
- the statement must state whether the accident was caused by someone whose identity cannot be determined
- it must also detail the extent of the injuries suffered any property damaged

2) If the 3rd party is uninsured:
i) the insured must give the insurer written notice within 30 days of the accident, or as soon as possible after that

3) If the 3rd party is either uninsured/unidentified:
i) within 90 days, or unable ASAP, the insured must provide as much evidence as possible in support of the claim
ii) the insured must provide the insurer with a certificate from the medical/psychological advisor of the insured person, if requested
- this must state the cause of injury/death and the nature of the injury and how long any disability is expected to last
iii) the insured must be prepared to undergo examinations by a qualified medical/psychological advisor at the insurer's expense, if requested
iiii) the insured must provide details of any other insurance policy (other than life ins) under which there is a right to compensation


How do claims for property damage work under this coverage?

An insured person can make claim for PD from his/her own insurer providing that the 3rd party is not only uninsured BUT ALSO unidentified
a) insured persons must notify insurer in writing within 7 days of the accident, of if unable ASAP, giving details of the loss/damage and circumstances
b) they must protect the auto against further damage
c) they must make no repairs, beyond those needed for protection of the auto, or remove evidence of the damage without insurer's written consent or until it has inspected the auto
d) they must permit the insurer to inspect auto at any reasonable time
e) they must complete a statutory declaration (proof of loss) within 90 days of accident if requested
- this will describe what happened in detail, the cause and amt of loss, those affected and how, and state the loss was truly accidental
f) they must not abandon auto to insurer unless it agrees to accept it
- if the insurer replaces auto or pays ACV, it owns the salvage


What are the limitations and exclusions under this coverage?

a) the insurer is liable for the lesser of the min limits where accident occurred or min limits in Ontario

b) where the insured is entitled to recover money under any other insurance policy (not auto), other than money payable on death (life/accident policy), the insurer is only required to pay the difference between that amount and the amount under paragraph a

c) the insurer is not liable for any payment if the insured is entitled to recover under the liability section of an auto policy

d) there is no liability to anyone who can recover from an unsatisfied judgment fund or similar fund

e) there is no liability for loss or damage caused directly/indirectly by radioactive material

f) the amt payable for PD to the auto and its contents is subject to a $300 ded and a max of $25,000

g) there is no liability on the insurer for loss/damage that occurs while the auto is being operated by an excluded driver


How does priority of payment work under this coverage?

- claims for BI/death have priority of pmt to 95% of the amt payable
- damage to auto and contents has priority of 5%


What is there is no recovery from the third party?

- when an insured fits the criteria that allows him/her to sue an uninsured third party, and gets a judgment but cannot collect the judgment, his/her own insurer will pay up to the allowable limits of the insureds policy


Describe highway victims indemnity funds.

- to ensure innocent victims of accidents (involving drivers driving without insurance or drivers of stolen vehicles) are compensated, HVIF have been set up in call Canadian provinces
- AL, BC, MAN, ONT & SASK have gov operated funds
- NB, NF, NS, and PEI victims are compensated by the facility asso when they are not covered by Section D of their auto policy
- in Quebec, "fonds d'indemnisation" is administered by the gov auto insurance body. It is funded and paid by the gov auto insurance and recovered from at-fault parties


Describe the operation of funds.

- the fund steps in as though it were an insurer providing the min TPL limits in the province
- at first the funds paid only when the victim obtained a court judgment against responsible party but more recently have taken a more liberal approach (administrators investigate/negotiate a reasonable settlement of at least some claims if they appear straightforward)
- in quebec, a court judgment is still required
- persons who suffer BI/PD must apply to the fund and if the claim appears genuine, the fund will investigate
- if responsible owner/driver is identified, but is uninsured/unable to pay, the fund will pay the damages in his/her place
- a judgment against responsible owner/driver will be filed with the court
- an application can be made with the registrar of motor vehicles to have drivers license of owner/driver suspended until the judgment amt is repaid to the fund
- if an uninsured owner/driver denies liability, the fund may require that the victim sue and a judgment be rendered before making payment
- if owner/driver is unidentified and the fund is satisfied that the victim was not responsible for injury/damage, the fund will pay
- if claimant is at fault, the fund does not pay
- for PD made either under UMC or through the fund, all provinces except SASK and MAN have applied a modest ded
- AL does not respond to PD claims
- the funds provide coverage for uninsured losses only, so if an insured has coverage for a particular loss caused by an uninsured party, the insured must claim from his/her own insurer
- the insurer is barred from exercising its right of subrogation against the fund, but can pursue recovery directly from at-fault third party