Chp 12: Automobile Insurance Across Canada Flashcards
(30 cards)
How is automobile insurance distributed in Canada? (2)
1) By private insurance companies, which sell their products:
- - directly to the public
- - through brokers or agents selling on behalf of a number of private companies
- - through independent brokers or agents
2) By Crown Corporations set up by provincial governments, which sell their products through:
- -private brokerage firms
- -direct sales department
- -other government agencies, such as vehicle licence offices
Automobile coverage in Canada
Refer to the exhibit on page 12-4 to compare the different coverages available in Canada
What are the provinces and territories with private insurance? and what is normally issued to insureds through private insurers?
- Alberta
- New Brunswick
- Newfoundland and Labrador
- Nova Scotia
- Ontario
- Prince Edward Island
- Northwest Territories
- Nunavut
- Yukon
A certificate of automobile insurance is issued, which outlines the particulars of a policy, and motor vehicle liability insurance card is issued to provide portable evidence of insurance. Some provinces provide an actual copy of the standard auto policy with a new purchase of insurance
What compulsory coverage is provided by the provinces and territories with private insurance schemes?
- TPL
- Accident benefits (optional in Newfoundland)
- DCPD (in NB, NS, Ont, PEI)
- Uninsured motorist coverage (some provinces have it a compulsory coverage, others have it as an optional endorsement)
What provinces have Government Insurance Schemes?
- Saskatchewan
- British Columbia
- Manitoba
No policy is issued, but a motor vehicle certificate of registration is issued.
Saskatchewan (Auto fund)
The Saskatchewan Automobile Accident Insurance Act was introduced in 1946. It was administered on behalf of the government by Saskatchewan General Insurance (SGI)
Insurance premium is payable on every motor vehicle license at the time licence is purchased. A premium is not payed on the drivers license, unless the motor vehicle is improperly licensed without the insured knowing, than the drivers license will provide insurance.
What basis compulsory coverage is provided by SGI?
- TPL
- Personal Injury benefit (compensates insureds who are injured in an automobile accident)
- Physical damage coverage (covers basic amounts of loss or damage to the vehicle and is subject to a deductible, called comprehensive insurance in Sask)
Is Saskatchewan a no fault province or a tort province?
- It is both.
- In 1995, Sask introduced no fault personal injury benefits called personal injury protection plan (PIPP). This plan provides substansial limits for income replacement, death benefits, education allowance, and funeral expense payments. It limits the right to sue a third party.
- Starting in 2003, Sask residents were given a choice between no fault benefits and personal auto injury tort coverage. The tort option provides lower level of defined benefits regardless of fault and ability to bring an action against the at fault Third party
Manitoba (Autopac) - what does the basic compulsory coverage consist of?
Manitoba implemented a no fault system of automobile insurance called Personal Injury Protection Plan (PIPP)
Basic compulsory coverage includes the following:
- TPL
- Accident benefits (called PIPP)
- All perils physical damage coverage
There is no ability to bring an action against an at fault party in Manitoba if collision is between two or more vehicles insured through Autopac. If there is an out of province vehicle or insurable vehicle involved in the accident, the litigation is available to either party.
British Columbia (Autoplan)
Autoplan requires every licensed vehicle owner to purchase basic autoplan insurance.
No policy, vehicle reg serves as evidence of insurance and the license plate number serves as the corporations policy number.
Higher limits are purchased either through ICBC, or private insurers.
Claimants must first accept or waive available no fault accident benefits before exercising their tort right under the coverage
What are the basic compulsory coverages offered by ICBC? and what are some optional coverages?
Basic coverage offered:
- TPL
- Underinsured motorist protection
- Accident benefits
Optional coverages offered:
- Extended TPL limits
- Extended UMP limits
- Collision, Comp, or specified perils physical damage
- Various endorsements
Quebec - A combined insurance scheme (SAAQ) - is Quebec a no fault province or tort?
Strictly a no fault province, lawsuits for injury related to auto accidents are prohibited, regardless of significance of injury or where the injured party is from. If the accident is within the borders of Quebec, than no lawsuit can arise from the accident.
How does Quebec offer a combined insurance scheme?
Bodily injury claims are covered by the Government compensation plan and property damage claims are covered by the standard automobile policies issued by private insurers
The government bodily injury fund is funded by premiums collected when license plates and drivers licenses are renewed, as well as by gasoline sales tax.
What is the basic compulsory coverage offered in Quebec?
- From the Government:
- -Accident benefits (More advanced compared to other provinces)
- From private insurers:
- -TPL (provides coverage for property damage for non-automobile damage and for bodily injury and property damage for accidents occurring outside of Quebec)
- -Direct compensation agreement (DCA) - provides coverage for property damage sustained in auto accident in Quebec. The vehicles own insurer covers the property damage to the amount the insureds not at fault
What are the four parts of the Automobile Insurance Act in Quebec?
Automobile insurance act created the Societe de I’assurance automobile du Quebec (SAAQ)
The 4 parts of the act include:
1) Compensation for bodily injury
2) Compensation for property damage
3) Fonds d’indemnisation
4) Groupement des assureurs automobiles
- Compensation for bodily injury - who is covered and what is covered?
Through SAAQ, the government administers the insurance plan covering bodily injury. This plan compensates all Quebecers sustaining bodily injuries resulting from an auto accident regardless of who is at fault, anywhere in the world.
It also compensates non residents who are victims of an auto accident occurring in Quebec for the amounts they are not at fault
Coverage provided under the act includes income replacement, death benefits, medical expenses. certain sums for disfigurement, dismemberment, suffering, and loss of enjoyment of life
What provinces have a special reciprocal agreement with Quebec and what does this mean?
- Alberta, Manitoba and Ontario
- Insured persons from these provinces who are injured in an auto accident in Quebec, regardless of fault, are able to collect the same SAAQ benefits as a Quebec resident would be entitled to from their own insurer
- Compensation for property damage
Bill 67 gave private insurers the right to provide coverage for property damage losses subject to certain guidelines
- Fonds d’indemnisation (Indemnity fund)
The basic purpose of this fund is provide compensation to innocent victims of auto accidents caused by uninsured or unidentified motorists, and this applies mostly only to property damage
- Groupement des assureurs automobiles (Authorized Insurers Corporation) - what are the three main duties of each corporation?
Act sets down rules providing for the establishment of a corporation. The 3 main duties of a corporation include:
1) Make it possible for every automobile owner to find an insurer from whom to purchase liability insurance
2) Establish a direct compensation agreement
3) Establish or certify appraisal centres for the appraisal of damages sustained to automobiles.
In Quebec, all insures are bound by the DCA for settlements of automobile accidents, fault for each accident is determined by the drivers fault chart. (Applies to provinces with no fault system)
What provinces have a Direct Compensation Scheme? (DCPD)
- New Brunswick
- Nova Scotia
- Ontario
- Prince Edward Island
How is fault determined in a direct compensation scheme?
Fault is determined in accordance with the insurance acts and legislated fault determination rules; losses are settled according to these rules.
Insurers must apportion liability according to the position of the vehicle at the time of the loss, once liability is determined, the insureds own insurer pays for any property damage caused by a negligent third party.
Under DCPD rules, insureds are not allowed to bring an action against an at fault third party
In New Brunswick (NS and PEI are modelled after NB) what conditions must be met for DCPD coverage to apply?
- An automobile or it’s contents, or both suffer damage arising directly or indirectly from the use or operation of one or more other automobiles in NB
- The automobile that suffers the damage is insured under a motor vehicle liability policy issued by insurer licensed in NB
- At least one other vehicle involved in the accident is insured under a motor vehicle liability policy issued by an insurer licensed in NB
DCPD and deductibles
If the policy contains a DCPD deductible, the insurers liability is limited to the amount of loss exceeding the deductible stated on the insurance application, multiplied by the percentage to which the driver of the vehicle was determined to be not at fault
Look at examples on page 12-14
