Flashcards in Chapter 9 - General Provisions, Definitions, Exclusions Deck (24):
Where are the rules, definitions and exclusions found?
- Under OAP 1 these are found grouped together under section 1 and 2 of the policy
- they apply to all parts of the policy unless otherwise stated
What does the "Territory (where you are covered)" include?
- this provision specifies that the policy applies only while the auto is being operated, used, stored or parked within Canada, USA and any other jurisdiction designated in the SABS, and on a vessel travelling between ports of those countries
- it also specifies that all dollar limits described in policy are in Canadian funds
- no coverage for autos used/stored in mexico because they do not recognize coverage provided by Canadian or American insurance companies\
- auto insurance must be purchased from a Mexican insurer before crossing the border
Define the "Occupant Defined".
- in the OAP 1, occupant is defined as a person, including the driver, in or on an auto, getting into, on, out of, or off an auto
Define "Spouse Defined".
Spouse means either of 2 persons who:
a) are married to eachother
b) have together entered into a marriage that is voidable or void, in good faith on the part of the person making a claim under the policy
c) have lived together in a conjugal relationship outside of marriage:
i) continuously for a period of not less than 3 years
ii) in a relationship of some permanence if they are the natural or adoptive parents of a child
note: the separate defintions of same-sex partners previously included in the OAP 1 has been eliminated as there is no longer a need to distinguish between spouses and same-sex partners
Define "Auto Defined".
- this item clarifies what vehicles are covered under OAP 1
- the "described" and "newly acquired" vehicles are owned by the insured
- "temp substitute" and "other" vehicles are autos that belong to someone else
- a trailer can be owned or non-owned by the insured
- motorized snow vehicle is included in the definition of auto
When we refer to automobile, what do we mean?
- when we refer to automobile, we mean:
a) a described auto
b) a newly acquired auto
c) a temp sub auto
d) other auto driven by you/your spouse who lives with you
e) trailers, in certain circumstances
Explain described auto.
- a described auto should be one that is registered in the name of the policy holder, aka named insured
- this is any auto/trailer specifically described in policy
- when we refer to an auto as described, we mean any auto specifically shown on certificate of auto insurance which shows coverages the insured has purchased for each described auto as follows:
3) Uninsured Auto
5) Loss/Damage (to auto)
- a described auto is any registered auto, or rec. vehicle/trailer, registered in name of policyholder and described on cert of auto insurance
Explain newly acquired autos.
- when an insured purchases an additional/replacement auto, coverage is automatically extended to it, subject to certain conditions
- the insured must notify the insurer with 14 days of taking possession of NAA
- the insurer has the right to inspect the NAA and its equipment at any reasonable time
- the replacement auto is insured for the same coverages as the des. auto it replaces
- however, if same insurer does not insure all autos owned by insured, coverage does not extend to NAA
- the insured must not be engaged in the business of selling cars
- note that the 14 days of automatic coverage is not free
- once insurer is notified, they will issue an endorsement charging a premium from the date the insured took possession of new auto
- if insured has insurance for more than 1 auto, only coverages that are on ALL insured autos extend to the new auto
- if existing insured autos have different ded, the higher ded applies to NAA
Explain Temporary Substitute Auto.
- this is an auto that is not owned by the insured or anyone living in the insureds dwelling premises, that is being used as a temp sub for a described auto that cannot be used because of its breakdown, repair, servicing, theft, destruction, or sale
- one of the biggest mistakes made by insurers, brokers/agents is to remove an auto from policy immediately after it has been destroyed/stolen because they are also eliminating the extended benefit provided for TSA that insured may be operating at the time
- in the event of an accident while operating a TSA, the primary responsibility for coverage under liability will mainly fall on the registered owners policy
- the owner of TSA can only relinquish responsibility for physical damage to auto
- as an owner of an auto that is temp out of service and now operating a TSA, the insured will have coverage extended to TSA that are similar to those coverages he/she had on described auto
- ***you cannot insure a vehicle under physical damage coverage of owners policy if you do not own the vehicle***
How does legal liability for physical damage work with a TSA?
- although no direct physical damage coverage provided on owners policy for TSA, legal liab protection for physical damage to auto is provided
- there must be some form of negligence on the part of the driver of the TSA for his/her policy to respond
- if none exists, no protection is afforded unless an action is started by owner of TSA against driver of TSA
- once the responsibility is made, in writing or orally, the owners policy will respond in the insureds defense and pay any damages that occur to TSA
How does the drivers policy respond to TSA?
- owners auto policy applies before any others when the insured vehicle is being operated with consent
- there are 2 situations in which liab coverage of driver of a TSA will respond rather than, or in addition to, the owners policy:
i) where the TSA is uninsured
ii) where the owners limit of liab under liab is insufficient to pay a judgment/settlement
Explain other autos (non-owned).
- the policy also covers other autos not owned by insured, but driven by insured/insured spouse who lives with him/her
- the coverages provided by the policy are:
3) Uninsured auto
TYPE OF VEHICLE
- any auto of private passenger/station wagon type, other than described auto, is covered while personally driven by insured or insured spouse who lives in same house, provided that:
1) both the other auto and des auto, must not have a manufacturer's gross vehicle weight rating more than 4,500 KG
2) the named insured is an individual, or if the des auto is owned by 2 people, the named insureds spouses of each other
3) neither you nor your spouse is driving the other auto in connection with the business of selling, repairing, maintaining, servicing, storing, or parking autos
4) the other auto is being used to carry paying passengers or to make a commercial deliveries at the time of any loss
5) for all coverages, except AB**, the other auto cannot be an auto that you or anyone living in same househould owns or regularly uses
- nor can the other auto be owned, hired, leased by your employer or the employer of anyone living in same household
- however, if you drive on of these autos while an excluded driver under policy for that auto, the policy will provide liab and UAC while you drive that auto
- for DCPD to apply the other auto cannot be a described auto in a motor vehicle liability policy
note: if insured is a corp, unincorp asso, partnership, sole proprietorship, business or entity, the auto coverage applies to an employee, partner, spouse of such persons who live with that person, for whose regular use a des auto is supplied
What are examples when a owner's policy respond if called upon for liab, AB, and UAC?
1) you take a trip to florida and rent a car
2) a friend buys a new car and invites you to take it for a spin
3) your visiting aunt asks you to park her vehicle for her
note: if the above vehicle carries own liability insurance it will be primary**
Explain the coverage used when pulling trailers.
- the OAP 1 gives unlimited permission to the insured to pull trailers; it does not differentiate between owned or non-owned trailers
- liab coverage, AB, and UAC will apply to any trailer used in connection with an auto
- DCPD will apply to owned trailers that are NOT describe on the policy if the trailer:
i) is attached, or normally used with, an auto with a manfacturers gross vehicle weight of not more than 4500 kg
ii) is not designed or used for living in, to carry passengers, or for commercial purposes
- when a trailer is described on a policy it loses its status as a trailer and becomes a described auto if a premium is charged under the corresponding sections of coverage
What happens when 2 or more autos are under the same policy?
- each one will be treated as if it were insured by a separate policy for claims resulting from its use or operation
- when an insured is operating/using a non-owned auto, (TSA or other), the insurer is only liable for an amt up to highest limit under liability that applies to any one auto described under owners policy
What happens when there are 2 or more autos under more than 1 policy?
- if an accident occurs while a TSA or other auto is being used, the loss is pro-rated between the policies
- the limit of liability for all insurers combined will be equal to the highest limit provided by any one policy
- this clause ensures that loss is shared fairly between competing insurers with diff liab limits
How does trailers and towing work?
- an auto pulling one or more trailers will be treated as a single auto when determining how much an insurer will pay under liab, AB, and UAC coverages
- however, trailers will be treated separate autos for purposes for determining the ded, how much will be paid under DCPD, and optional loss/damage coverages
- if a loss involves 2 or more autos owned by diff persons and attached to each other, (an auto towing a borrowed trailer), the insurer of each auto will compensate its insured for losses according to terms of DCPD and opt loss/damage coverage
What does the war risks excluded provision contain?
- states that the insurer will not be liable under any coverages except liab for any loss, damage, injury or death caused by war activities
- war activities are defined as: bombardment, invasion, civil war, insurrections, rebellion, revolution, coup, or actions of armed forces while engaged in war, whether declared or not
What are the excluded uses?
Except for AB, there is no coverage under this policy if:
1) the auto is used to carry explosives or radioactive material
2) the auto is used as a taxicab, bus, sightseeing conveyance, or to carry paying passengers
What is not considered carrying paying passengers? (permitted passengers)
1) giving someone a ride in return for a ride
2) sharing the cost of an occasional trip with others in auto
3) carrying a domestic worker hired by you/spouse
4) occasionally carrying children to or from school activities that are conducted within the educational program
5) carrying current or prospective clients and customers
6) reimbursing volunteer drivers for their reasonable driving expenses, including gas, vehicle wear and tear, and meals
What does the Buy-back provision contain?
- each of these excluded uses may be "bought back" if the insured needs coverages
- for an additional premium specific endorsements are available to delete each exclusion from the policy
What does the excluded drivers and driving without permission provision include?
Except for AB, there is no coverage (including cov for occupants) under this policy if the auto:
1) is being used or operated by a person without owners consent
2) is driven by a person named as an excluded driver
What does the rented or leased auto provision contain?
- except for AB, there is no coverage under this policy if the auto is rented or leased to another
- if an insured is using auto for an employers business and is paid for using it, that will not be considered renting or leasing