C14- Automobile Insurance Part 1 (British Columbia) Thanks to Sonia C. for the notes

Transcription

1 C14- Automobile Insurance Part 1 (British Columbia) Thanks to Sonia C. for the notes CHAPTER 1 - INTRODUCTION AND DEVELOPMENT OF AUTO INSURANCE History Need for Insurance first coverage s indemnified the insured for injury or death and damage to property of others. Late this was extended to cover damage to the automobile itself by collision, fire and theft. Standard automobile policy wordings In the 1920 s the province enacted mandatory conditions for automobile policies. Standard Conditions helped to provide a consistent approach to the settlement of automobile claims. Automobile Insurance is compulsory everywhere in Canada 2 Ways of Underwriting and Distribution of Automobile Insurance 1. by private insurance companies which sell their products directly to the public thru agents/brokers selling on behalf of a number of private companies 2. by crown corporations specifically set up for this purpose by provincial governments It is the responsibility of the owner of an automobile to purchase insurance. Saskatchewan, Manitoba and BC have crown corporations which provide ht basic compulsory automobile coverage s. Quebec has a no- fault system, bodily injury claims are covered by a government compensation plan and property damage claims are over by standard automobile polices issue by private ins. companies Approved standard automobile policy forms ( know at least 3 of these) used by private carriers S.P.F. 1 Standard Owners Automobile Policy provides coverage for owners of vehicles. S.P.F. 2 Standard Drivers Automobile Policy Provides coverage for drivers who are driving vehicles they do not own. S.P.F. 3 Standard Garage Automobile Policy Provides coverage for garages in respect of owned, non-owned and customers vehicles. S.P.F. 6 Standard NON-Owned Automobile Policy Provides coverage where there is responsibility for the operation etc of non- owned automobiles. S.P.F. 7 Excess Automobile Policy Provides excess liability coverage, for use along with an SPF 1, 2, 4 or/and 6 S.P.F. 8. Lessor s Contingent Automobile Policy Provides a contingent coverage for businesses that lease vehicles on a long-term basis.

2 BC, Manitoba & Saskatchewan government plan requires that all extension policy forms and endorsements be of a standard and approved form, similar in scope to the SPF 2, 4 or 6 forms. No policy is issued for the basic compulsory coverage. In BC coverage in excess of the basic compulsory coverage are referred to in Part 9 of the Regulation as Extension Insurance Division 1 Third Party Legal Liability Division 2 Own Damage coverage Division 3 Roadstar package CHAPTER 2 LEGAL CONCEPTS Negligence Negligence is the failure to do what a reasonable and prudent person would do, or doing what such a person would not do, resulting in property damage or injury. Owner and driver equally liable sec 86 of the BC Motor Vehicle Act every person driving or operating the motor vehicle who acquired possession of it with the consent, express or implied, of the owner of the motor vehicle shall be deemed to be the agent or servant of that owner The driver must be operating the vehicle with the consent of the owner. The owner is not liable for damage or injuries to others when the vehicle is being operated without the owners consent. Onus of Proof (Onus Probandi) Burden or responsibly of proof is upon the one suing ( the plaintiff) the one who sues. He who alleges must prove, plaintiff must prove the case. In some provinces there is one exception. When a pedestrian is involved, the motorist is presumed to be liable to the pedestrian and it is up the motorist to prove he or she was not negligent. This does not apply in BC by motor vehicle statute. Automobile Legislation and Insurance Needs Insurance responds to the need for adequate financial responsibility. Insured first party Insurer second party Others third party Major consequences of negligent operation of a vehicle are: 1. breaking the law 2. causing damage or injury to n innocent third party 3. causing damage to your own vehicle The Law 3 levels of government have laws pertaining to the operation of automobiles.

3 1. Federal legislation The Criminal Cold of Canada, applies to all provinces criminally negligent operation of a motor vehicle impaired driving refusing to give a breath sample to a peach officer vehicle theft failure to stop at a scene of an accident 2. Provincial legislation motor vehicle or highway traffic acts sets out rules on the road Speed limits Rules respecting traffic lights and stop signs 3. Municipal by-laws municipalities enact Crosswalk and parking by-laws Sped limits within their borders Automobile Third party liability coverage this is the first coverage needed since it arises form accidents involving motor vehicles, since the damage for which on is responsible is to an innocent third party, since an individual is legally liable for the damages caused by the negligent operation of a vehicle. Financial Responsibility proof of financial responsibly is required, there are penalties for not being able to prove it. Proven by production of a valid pink card. The pink card is evidence of in force auto insurance liability policy with at least the minimum limits. Evidence of automobile third party liability insurance pink cards are designed to serve as evidence of automobile third party liability insurance. Contain the following: Name and address of insurer Name and address of insured Agency/brokerage name or number Description of insured vehicle Policy number or license plate number where gov t plan Effective and expiry dates Subrogation An insurer who pays to repair an insured s vehicle that was damaged by a third party, has the right to pursue recover from the at-fault third party. The right of subrogation can be removed or limited by legislation and has been done in several provinces. Absolute Liability Third party rights to insurance money are not prejudiced by insured s action in the event that the insured breaks a condition of his policy, coverage could be denied by the insurer. However, if there is an innocent third party, they have a direct right to action against the insurer to have the insurance money under the policy paid directly to them. Absolute liability law provides the right of third parties to have the insurance money under a policy applied to their judgment or claims against an insured, shall not be prejudiced.

4 Even though misrepresentation may be made in an application for insurance or the policy may be breached as between the insurer and the insured, absolute liability applies with respect to the rights of third party claimants. Breach of condition could be before misrepresentation on application, during impaired driving or after false statement, lying. Insurer does have the right to recover from its own insured any amount paid by reason of absolute liability. Bound coverage cannot be voided respecting third party claims, make sure questions are asked properly and documented. CHAPTER 3 NO-FAULT CONCEPTS. No fault concepts must be considered separately for Vehicle Damages and for Injuries. Knock for Knock agreements each insurer paid its own insured, and did not pursue subrogation, money was save on investigation establishing fault, and costly litigation between insurers. Knock for Knock agreements laid the groundwork for direct compensation. Direct Compensation Aims: 1. Less investigation 2. Less subrogation activity 3. Less litigation 4. Speedier settlements for insured s 5. Insured s deal only with their own insurer 6. Cost savings which result in lower premiums. No fault concepts for injury Developed in the US First type insureds recovered from their won insurers for medical bills up to a small limited. The could not sue for amounts up to the limit, but could sue the at fault third party for amounts in excess. Second type threshold had a much higher dollar limited blow which a suit was not allowed. This only encourage suits or higher amounts. Third type a suit was banned unless the injuries met certain specific medical descriptions. If it didn t meet this description which came to known as the threshold, certain benefits were claimed from ones own insurer, including medical expenses, wage losses etc. In Canada, Medical expense coverage a form of no-fault existed since the late 1940 s. It provided minimal coverage on a no-fault basis for medical expenses for the driver and passengers injured in an automobile accident. Insured had a choice of limits. Accident Benefits 1960 s were developed, provided modest limits that were immediately available. Could go to the courts to recover from at fault third parties for serious injuries. Over time plans changed, some provinces took away the right to sue or limited it. Coverage was enhanced and limits increased to compensate. Quebec 1978 totally bans suits, the benefits are rich but they lost their right to sue and only small amounts are paid for general damages.

5 Ontario 1990, enacted a threshold no-fault plan. Suit can be brought only if the insured. a. died b. sustained permanent serious disfigurement or c. sustained permanent serious impairment of n important bodily function caused by continuing physical injury Manitoba 1994 no-fault bodily injury plan, similar to Quebec, does not permit suits for injury Saskatchewan 1995 No fault bodily injury plan but permits suites in certain circumstances. (BC uses the Tort System) Combined no-fault for inury and vehicle damage. Non-adversarial first party system - Ontario has direct compensation for vehicle damage as well. Insureds only claim from their own insurers. CHAPTER 4 BRITISH COLUMBIA AUTOPLAN History Apr 19, 1973 the Insurance Corporation Act was passed, setting up Crown Corp with board of directors including a minister of Cabinet. The automobile Insurance Act was now name the Insurance (Motor Vehicle) Act, it set out the universal compulsory automobile insurance plan This required all owners of license vehicles to purchase basic AutoPlan ins from the corporation as part of the regular licensing procedure. Autoplan is a statutory entity. Applicable Statutes A. Insurance Companies Act Deals with Federal Licensing and supervision of insurance companies. Office of the superintendent of financial institutions. B. The Insurance Act Administered by the superintendent to financial institutions for BC All insurance companies, brokers/agents and adjusters are licensed by the superintendent pursuant to the act. The only insurer operating in the Province that is not licensed federally or provincially is the Insurance Corporation of BC The act sets out he basic provision of the statutory policies The act prescribes statutory conditions required to form part of each statutory policy C. Insurance Corporation Act Sets up the Crown Corporation, Establishes its Board of Directors and Provides for the operation of the Corporation D. The Insurance (Motor Vehicle) Act corp. of BC is entrusted with the administration of the insurance (motor vehicle) act which sets out the concept and Skelton of what is now known as Autoplan E. Motor Vehicle Act Deals with the registration and licensing of motor vehicles

6 Licensing of drivers Traffic control of vehicles on highways Requirements of proof of financial responsibility and safety responsibilities F. Limitation Act Fixes the times within which a plaintiff must commence legal action against a defendant In BC it s two years G. The Interpretation Act Specifies the meaning or effect of various expressions, terms and words frequently used in statutes or regulations. Regulations prescribe the detail that gives shape to the statutory concept. Cannot amend, alter, widen or narrow the concept of the parent statute and must always conform to the concept of the statute. Automobile Insurance Regulations A. Regulations prescribe the detail of Autoplan. In this sense the regulations replace the insurance contract used in the insurance industry prior to ICBC B. Private insurers contact with the insured to provide coverage in conformity with the automobile insurance regulations for extension third party Legal Liability coverage C. Factors that shaped the regulations are: Because autoplan is universal and compulsory special deals for insured s are both impractical and undesirable. The regulations having the force of law, must have equal and just effect on every person Regulations must provide coverage and exclusions basically similar to the pre-existing standard auto policy. Autoplan Application to All Licensed Vehicles Every vehicle licensed in BC is required to obtain basic Autoplan coverage unless exempted Vehicle exemptions from Autoplan a) government vehicles of Canada, Canadian government only, BC govt vehicles uses Auto plan b) Vehicles licensed to engage in inter provincial trade pursuant to the federal Motor Vehicle Act c) All vehicles not required to be licensed are example eg snowmobiles d) Vehicles that are licensed for operation on a highway for certain special purposes. Eg. Construction equipment e) Attached equipment of a vehicle while operating at site, with certain exceptions. Application of Autoplan to New Residents or Departing Residents New or temporary residents exempted for a period of up to 6 months A new permanent resident must obtain vehicle registration and Autoplan Ins. within 30 days University Students or military personnel in BC on short term assignments must register their vehicles and file proof of financial responsibility or obtain Autoplan coverage Commercial vehicles entering or passing through the province must prove financial responsibility

7 Drivers with valid drivers licenses from their place of normal residence are allowed up to 3 months for the last date of entry into the province in which to obtain a BC Drivers License. Departing residents are required to comply with the law of the new place of residence regarding registration and licensing o f their vehicle as well ad valid drivers license. Acquisition of registration and licensing in another jurisdiction is regarded as cancellation of Autoplan or 60 days after the vehicle leave BC with the intention of being operated continuously outside BC Minimum Limits The minimum limit of basic third party legal liability coverage required by Autpolan is $ 200,000, together with no fault accident benefits to a limit of $ 150,000 Drivers Certificates Drivers licenses is regarded as the drivers certificate The owner of the certificate is entitled to third party legal liability coverage up to a max of $ 200,000 and no fault accident benefits. Poor driving records are surcharged by drivers certificate It forms a coverage of last resort when there is no owners certificate available to a driver CHAPTER 5 APPLICATIONS FOR ATUOMOBILE INSURANCE: BC Basic Compulsory Autoplan The written application form is number APV9 Is completed in a face to face interview with an agent/broker representing ICBC Results in instant print of the two certificates: 1) owners certificate of insurance and Vehicle License and 2) a certificate of Registration both numbered APV 250 In both cases document is signed and the owner declares the truth of the answers given. Forteiture of claims 1. Where a) applicant has falsely described the motor vehicle or trailer b) knowingly misrepresents or fails to disclose in the application a fact required to be stated in it c) violates a term or condition of a plan d) commits a fraud in respect of this Act e) makes a willfully false statement with respect to a claim under a plan 2. Where a forfeiture would appear inequitable (insurer has nothing to gain) the corp. may relieve a person affect by it from forfeiture. 3. corp. shall relieve a insured person from the forfeiture of the benefits if he dies or suffers a loss of function of mind or body as a result of an accident that renders him permanently incapable of engaging in any occupation for wages or profit. Written and verbal application includes: Effective date

8 Expiry date Vehicle information make, model, year, colour VIN #, net weight Owners name and address Principal operator information which the named insured Claim Rated Scale status determined Territory of use Use of vehicle ( rate class ) Third party legal liability limit and optional excess, optional Own damage Delcared Value or Rate Group of the vehicle The combination of the following coverages and deductible or limit desired 1. Collision/deductible 2. Comprehensive/deductible 3. Specifie dperiosl/deductible 4. Loss of use/limit CHAPTER 6 THIRD PARTY LIABILITY: BC Compulsory Autoplan A license plate cannot be obtained without compulsory insurance or vice versa. There is no policy contract for the basic limits or for extended third party liability limits when written with ICBC. Coverage Covers the owner of the insured vehicle and any person who drives with the owners permission and consent for basic limits: Third Party Legal Liability, No-fault, First Party coverage Third Party Liability coverage protects a motorist who is legally liable for an accident against claims of bodily injury, death, or damage to property of others, to the total limited purchased. reasonable emergency medical aid, certain emergency equipment or supplies court costs, prejudgement and post judgment interest and legal claims investigation costs. Who is insured The Insured is: While driving the insured vehicle The policy holder Persons driving with the policy holders permission Where the policy holder is deceased His or her personal representative or other person having custody of the vehicle pending settlement of the will Where the owner is not an individual an officer, employee or partner of the owner for whose regular use of the vehicle is provided members of the household of such officers, employees or partners

9 Note: the owners certificate is simply the certificate of insurance issued to the named insured on the reverse of which is the pink card or liability card. Recognized throughout the territorial limits of Canada and the US. Extensions to Third Party Indemnity When Driving Other than the Insured Vehicle. Third party liability is transferable to other than the insured vehicle when driven by certain persons. However it is only excess to the primary coverage available on the owners certificate of the vehicle being driven Except When driving other vehicles, the insured is: The named insured Members of his/her household Employees or partners of the owner if vehicle provided to such for regular use Spouse of such employees or partners. a) the insured is in the business of a garage b) the other vehicle driven is owned or regularly operated by an insured c) if the vehicle is used for carrying passengers for compensation d) the insured operates an unlicensed vehicle and does not have reasonable grounds for believing it was licensed e) the insured operates a vehicle owned or operated by the government of Canada or any other province, or territory f) the insured is knowingly driving without the consent of the owner of the vehicle Third Party Liability coverage is also provided to passengers for - a) injury or death to a person who is not an occupant of the vehicle and b) loss or damage to property that is not carried in or on the vehicle or in the care custody and control of the insured. Indemnity is provided damages or injury a) arising out to of the use or operation by the insured vehicle described in an owners certificate b) occurs in Canada or the US or a on a vessel traveling between Canada and the US. Appointment of attorney, the corporation may act as and shall be deemed to be the duly appointed attorney of an insured to appear and defend the insured in an action brought against him in another province of Canada. Insured s obligations 1. An insured shall a) promptly give the corporation written notice, with all available particulars any accident involving death, injury, damage or loss in which he or a vehicle owned or operated by him has been involved any claim made in respect of the accident any other insurance held by him providing coverage for the accident b) on receipt of a claim, legal document for correspondence relating to acclaim immediately send the corp a copy of the claim, document or correspondence c) cooperate with the corp in the investigation, settlement or defense of a claim or action

10 d) accept at his own cost, assume no liability and settle no claim e) allow the corp. to inspect an insured vehicle or its equipment or both at any reasonable time 2. The corp is not liable to an insured who, to the prejudice of the corp fails to comply with this section Other insurance The insurance on the vehicle involved in the accident is primary and the portable coverage (extension of indemnity) form a drivers own policy is excess but only to the extent that the limit on his or her policy is higher than that for the vehicle involved in the accident. Coverage does not apply if the other vehicle is owned or leased by the person or member of the same household as the person involved in the accident or is part of the same fleet or deemed to be part of the same fleet as the vehicle involved the accident. Exclusions to Third Party Legal Liability and Accident Benefits Garage Exclusion no coverage is provided to the garage service operator Exclusions to Third Party Liability 1. Property Carried in or on a vehicle Owned or rented by an insured. In the care, custody or control of an insured 2. bodily Injury or Death of Spouse of Insured Driver Excluded applies only prior to April 17, Workers Compenstaion Payments Excluded 4. Attached Machinery 5. Punitive or Exemplary Damages or Other Similar non-compensatory Damages 6. Breaches of Conditions 7. Impaired by Drugs or Alcohol Accident Benefits and Own Damage are breached when : insured is not authorized and qualified by laws to operate the vehicle If the vehicle is used for illicit or prohibited trade or transportation If the vehicle is used to escape arrest or other similar policy action If the vehicle is used in a race or speed test. If the dominant cause of the injury or death is the use of any weapon or any object to the than a motor vehicle used as weapon, ICBC is no liable. Insuring Agreements Insurer agrees to indemnify, 1. the insured and 2. anyone who drive or operates any part of the automobile with consent Indemnity means to provide compensation for loss or expenses incurred. The insured is the registered owner of the vehicle and is responsible for any damage to others done with that vehicle.

11 Additional agreements of Insurer, 1) investigate, negotiate and settle all claims 2) defend any civil action brought against the insured, even if groundless 3) pay court costs assessed against the insured and pay post-judgment interest on insured portion of judgments or damages against the insured. 4) Reimburse the insured for out of pocket costs for immediate medical aid to third parties. 5) The insurer will pay up to the minimum limits of the jurisdiction within Canada where the accident occurs 6) Insurer agrees that it will not use a defense to a claim which could be set up in the insured home province or territory if such defense may not be used where the accident occurred. Agreements of the insured a) the insurer is irrevocably appointed the insured s attorney to conduct civil defense in actions rising out of the use, ownership, or operation of the automobile. b) The insured agrees to reimburse the insurer for all amounts the insurer has to pay because of Absolute Liability Laws and which the insurer would not otherwise be liable to pay under the policy. CHAPTER 7 - ACCIDENT BENEFITS: BRITISH COLUMBIA History As accident benefits are always made on a no-fault basis, the at fault driver is also entitled to received these benefits. These will be the only benefit the at fault driver will receive. Part 7 Accident Benefits employed person - who on the date of an accident for which a claim is made, is employed or actively engaged in an occupation for wages or profit or - for any 6 months during the period of 12 months immediately preceding the date of an accident for which a claim is made is employed or actively engaged in an occupation for wages or profit (doesn t have to be consecutive ) insured - the named insured - members of the household of a person named in an Owners Cert. - occupants of vehicles licensed and insured with ICBC - occupants of vehicles not required to be license in BC operated by persons with a valid drivers certificate - cyclists or pedestrians (in Canada only) who collide with an insured vehicle - a resident of BC who is entitled to bring an action for injury or death under section 20 ( uninsured vehicles ) or section 24 ( hit and run) of the insurance (motor vehicle) act.

12 3 Types of Accident Benefits 1. Disability benefits for employed persons - are provided within 20 days after an accident - will pay the insured for the duration of the disability or 104 weeks whichever is shorter - before Jan 1, 1987 it was 75% of insured s salary per week for the 12 month period preceding the accident divided by 52 and multiplied by the benefit multiplier - on or after Jan 1, 1987 but before Jan 1, it was 75% of insured s salary per week for the 12 month period preceding the accident divided by the number of weeks and fractions o f weeks actually worked during that period and multiply by the benefit multiplier - on or after Jan 1, 1991, an amount per week calculated by taking 75% of the insured s gross earnings for the 12 month period immediately preceding the accident and dividing by the number of weeks and fractions of weeks actually worked during that period up to a maximum of $300. Deduction of other benefits * these are deducted from any benefit payable by ICBC up to the $ 300 max. - other benefits payable under a contract or plan of auto insured providing benefits - payable under a policy of accident, sickness or life insurance - paid by an employer Employment during total disability Insured may keep earnings up to 25% of the disability benefit Payments under Workers Compensation Act When workers compensation applies, the corp is not liable to pay benefits under this Part for the injury or death Disability benefits for homemakers - Within 20 days after an accident benefits are provided - For injury sustained that disables an insured who is a homemaker from regularly performing most of the insured household takes. - Will compensate for reasonable expense incurred by the insured to hire a person to perform the household tasks on the insured s behalf - Not payable to a member of the insured s household The insured must be disabled for a period of 7 days ( deductible), no benefit is payable for the first 7 days either. Disability beyond 104 weeks will continue to pay for the duration of the disability or until the insured reaches 65 years of age 2. Medical and Rehabilitation benefits Pays as benefits all reasonable expenses incurred by the insured as a result of the injury ambulance, or professional nurses services or necessary physiotherapy, chiropractic treatment, occupational therapy or speech therapy or for prosthesis or orthosis, medical, surgical, dental or hospital. In the opinion of the corps medical advisor, one or more of the following which likely to promote the rehabilitation of an insured Acquisition by the insured of a motor vehicle equipped as necessary and appropriate to its use or operation by the insured

13 Alterations to the insured s residence that are necessary to make the residence accessible to and usable by the insured Reimbursement to the insured for cost of attendant care, not member of own family, where the insured has returned and is residing in the community, cost of group residence, attendant care not exceeding 12 hours per day. Costs incurred form time to time by the insured for one or more of the following: o Wheelchair with required attachments o Medically prescribed bed o Bowel and bladder equipment o Grooming and hygiene aids o Transfer boards and lift o Eating aids o Communication aids o Dressing aids o Respirator equipment Maximum of $150,000 per incident for Medical and Rehabilitation benefits Also.. users fees in excess of what MSP would pay are not covered Power to terminate benefits for refusal to undergo treatment or training Corp may required the insured to undergo certain medical or retraining/education program If the insured refuses to comply the corp. may after giving the insured a t least 60 days notice in writing by registered mail, terminate benefits o Within 60 days the insured may apply to a judge of the supreme court against terminating benefits on the following grounds The treatment is unlikely to relieve the insured s disability ore may affect the balance of the health of the insured The program is not likely to assist in the rehabilitation of the insured. 3. Funeral Expenses Burial and funeral expense up to $2500 limit 4 Death benefits Dependent child child of a parent who is legally liable to support or contribute to the support of the child, or a child of an insured who is born after the death of the insured and survives for 60 days after birth Head of Household - the one who makes the most money, is legally liable to contribute to the support of the household and during the 12 months immediately preceding the accident provided the major portion of the household s income. Death benefit is paid based on the age and status of a deceased insured where, the death of an insured is caused by an accident and the deceased is survived by a spouse, dependent child or dependent parent or a parent where the deceased insured is a dependent child. Supplemental, additional and survivor s death benefits Supplemental death benefit is paid to each survivor Period of 104 weeks after the death of the deceased insured Additional death benefits for the first survivor Survivors death benefits for each survivor other than the first Payments under this section terminate on the death of all survivors of the deceased insured

14 Rules of payment of death benefits. Death benefits are paid to the survivor, lump sum or weekly benefit Benefits payable to the spouse If there is more than one spouse, shall not exceed the amount payable To the spouse having the greatest claim Where the claims are equal to one spouse Sixty day rule and common disaster Shall be paid only to a person who survives the deceased insured by at least 60 days Where the death of the head of household and spouse or dependent of the head of the household is caused by a common disaster any benefits payable shall be paid only in respect of the death of the head of household. Restrictions on benefits Corporation is not liable for injury or death of a person i. Who is resident outside the Province at the time of the accident, is the occupant of a vehicle not described in an owners certificate ( covered if in BC Vehicle) ii. Who is an occupant of or is struck by a vehicle that could not be licensed under the Motor Vehicle Act or Commercial transport Act, Vehicle is not licensed under the applicable legislation unless the occupant had reasonable grounds to believe that the vehicle was licensed. iii. who commits suicide or attempts to commit suicide whether he is same or insane iv. occupant of a vehicle who at the time is being used for illicit or prohibited trade or transport v. injury or death is caused by sickness or disease unless it is contracted as a direct result of the accident. No fault Accident Benefits are NOT paid in respect of injury or death: a) where a non resident of BC is injured or killed in an accident in BC in a vehicle not insured by Autoplan b) i) when the injured person is an occupant of or is struck by a vehicle that cannot be licensed under Motor Vehicle Act or Commercial Transport Act ii) occupant of certain types of vehicles eg, vehicles registered in the name of the government of Canada or of any other government or territory other than government of BC. Vehicles traveling inter-provincially, not required to participate in Autoplan unusual vehicles which do not qualify for Auto plan iii) occupants who knowingly ride in unlicensed vehicles which could be licensed and insured. c) resulting from suicide or attempted suicide d) resulting from involvement in illicit or prohibited trade or transportations. e) When it is caused by sickness or disease unless as a direct result of the accident Breach of coverage conditions If the insured is not authorized and qualified by law to operate the vehicle For illicit or prohibited trade or transportation To escape or avoid arrest or other similar police action In a race or speed test Autopsy -The corp has the right to autopsy or post mortem examination of the body of the deceased insured

15 Limitation no person shall commence an action in respect of benefits under this part unless they complied with the provisions that are applicable to him or her - The action is commenced within 2 years for the last payment CHAPTER 8 UNINSURED MOTORIST COVERAGE Need for cover where accident is caused by motorists who are not insured or not identified hit and rung. Victims need protection or they would suffer serious financial loss due to lost income, medical and rehabilitation expenses and vehicle damage. 1. all provinces have a plan, Highway Victims Indemnity Fund eg. But do not exist in NWT and Nunavut and Yukon and most of the US states 2. all provide indemnity for bodily injury, most Canadian funds provide for property damage subject to identification of owner/operator of the vehicle. 3. the insured must be legally entitled to recover a loss from the uninsured or unidentified motorist. BC Unidentified or uninsured motorist The fund is administered by ICBC under the authority of the Insurance (Motor Vehicle) Act. Since all BC drivers are covered, many private insurers have excluded unidentified motorist claims from their own damage coverage s in BC. In the event of a Hit and Run where the person responsible for the damage cannot be identified, Autoplan ins. protects a victim to a max of $ for bodily injury or property damage. Property damage has a $350 deductible. will apply collision deductible if less amount Loss paid by another insurance plan or by any government agency may not be claimed through ICBC Notice of hit and run claim must be filed with the policy within 48 hours. Eff July 31, 1997 persons in stolen vehicles are not able to recover from ICBC on uninsured motorist claims. CHAPTER 9 LOSS OF OR DAMAGE TO THE INSURED AUTOMOBILE: BC Own damage coverage is not compulsory in BC and is available from both Private insurers and ICBC. PART 1 - SPF 1 STANDARD POLICY FORM NO. 1 used by the private sector in BC for non compulsory Own Damage coverage Section C indemnified the insured against direct and accidental loss of or damage to the automobile and its equipment (anything permanently attached). Or if is not attached must be specifically designed for use with the automobile. It is up to the insured to decide whether or not they want physical damage coverage for their vehicle and to what extent. Mortgagees and lien holders will required certain coverage s. Coverage s are: All Perils ( not available with ICBC) o Broadest coverage, combines and broadens the protection provided by the other three coverage s Collision or upset o Indemnifies insured for damage to their vehicles resulting form collision with another object or by upset. o Unusually involves insured vehicle striking another vehicle but also includes a one vehicle accident where the vehicles hits a tree or guard rail or another object.

16 o If it an animal, its covered under comprehensive Comprehensive o Protects the insured vehicle against any period other than collision or upset. o Vandalism, glass breakage and flying objects are covered but not by specified perils Specified Perils o States the specific perils insured against o 11 specified perils are: fire, lightning, theft or attempted theft, windstorm, earthquake, hail, explosion, riot or civil commotion, falling or forced land of aircraft or of parts thereof, rising water or the stranding, sinking, burning, derailment or collision of any conveyance in or upon which automobile is transported on land or waters. Deductibles coverage under section C is written subject to a deductible each insurer will have a minimum. deductibles are useful tools in keeping down premium costs effective way of reducing costs the deductible does not apply if the direct cause of loss is fire, lightning or theft of the entire vehicle with ICBC the deductible applies to all claims. Exclusions: The insurer is not liable for loss or damage : 1. a) To Tires unless the loss or damage is caused by other loss or damage or by fire, theft or malicious mischief which is covered. general wear and tear is not covered b) caused by theft conversion or embezzlement by any person in lawful possession of the auto rented or leased vehicles not covered c) caused by the voluntary parting of title or ownership, where or not induced by fraud, trick etc. d) caused directly or indirectly by contamination by radioactive material e) to contents of trailers, or to rugs or robes (meaning personal effects like clothing, cutlery etc) thing not permanently fixed to the trailer is not covered f) to tapes and equipment for use with to a tape player or recorder when detached therefrom g) where the insured drive or operates the vehicle i) where under the influence of intoxicating liquor or drugs to the extent of being impaired ii) while in a condition for which he is convicted of an offence under certain sections of the criminal code. h) where the insured allows the use of the vehicle by any person contrary to the provision of g) **Impaired driving with ICBC is not just an exclusion but is a breach for both Third Party Legal Liability and Loss or Damage to the Insured Vehicle. 2. Under subsections 3 (comprehensive) and 4 (specified perils) only for loss or damage caused by theft by any person residing in the same dwelling premises as the insured or by an employee of the insured engaged in the operation maintenance or repair of the vehicle ** this last exclusion does not apply to All Perils. ** four types of theft not covered 1. rented or leased vehicles 2. voluntary parting of title or ownership 3. Resident theft 4. Employee theft Additional Agreements of Insurer 1. Where loss or damage arises from an insured peril, in insurer agrees: a) to pay general average, salvage and ire department chares and customs duties of Canada or the US for which the insured is legally liable.

17 b) to waive subrogation against every person who, has care, custody and control of the vehicle with insured s consent - shall not apply to persons 1. in the business of selling, repairing, maintaining servicing or parking automobiles 2. who has, committed a breach of any condition of the policy c) to indemnify the insured and any other person who personally drives a temporary substitute automobile subject to: i) deductible and exclusions ii) if there is other insurance indemnity is limited by the sum of other or deductible covers the difference in deductibles and coverages iii) additional agreements under section A shall apply 2. Loss of use by theft of entire vehicle under All perils, comprehensive or specified perils the insurer agrees to reimburse the insured for expense of substitute vehicle, $ 25 per day to $750 max. ( ICBC $40 per day, $ 800 max) - Limited to such expense incurred during the period commencing 72 hours after such theft has been reported and terminating a) upon the date of repairs completion or replacement b) when insurer makes or tenders a settlement for the loss. PART 2 EXTENSION INSURANCE (regulation Part 9) Part 9 of the regulations makes provision for non-compulsory coverage, includes: Division 1 Third Party Liability, Division 2 Own Damage Coverage and Division 3 Road Star Package Division 2 Own Damage coverage Regulation 116 own damage coverage is provided under the owners certificate, indemnifies the insured to the extent of his insurable interest, in respect to direct or indirect accidental loss or damage to the vehicle and its equipment provided it a) occurs in Canada or US or a vessel traveling between Canada the US b) is caused by one of the perils for which the own damage coverage is provided. Regulation 117 covers the cost of repairs to a damaged vehicle or in the case of a total loss, makes provision for payment of the less of the actual cash value or the declared value of the vehicle. Regulations 20, 21 and 22 deal with the rules governing motor homes, custom vehicles and leased vehicles and coverage for attached equipment Collision Coverage Loss or damage caused by upset or collision with another object, including but not limited to a) the surface of the ground, the roadway b) a pedestrian c) a vehicle attached to the vehicle d) cargo, including animals carried or a commercial vehicle includes collision which results from the presence on or adjacent to the roadway of a domestic or wild animal but there is no impact. Comprehensive Coverage Loss or damage other than loss or damage to which collision coverage applies. Includes, missiles, falling or flying objects, lightning, fire, theft or attempted theft, earthquake, windstorm, hail, rising water, malicious mischief, riot or civil commotion or the stranding, sinking, burning derailment, upset or collision of a conveyance in or on which a vehicle is being transported on land or water, vandalism and impact with a domestic or wield animal either living or dead. *** not defined in the SPF 1 wordings: impact with an animal is comprehensive, impact with another object, even if caused by trying to avoid an animal is collision, impact with a pedestrian, vehicle attached to the vehicle, and cargo including animals in a commercial vehicle >5000 kg GVW is also collision. Specified Perils Means coverage for loss or damage caused by the falling or forced landing oan an aircraft or part of an aircraft, lightning, fire, theft or attempted theft, explosion, earthquake, windstorm, hail, rising water, malicious mischief, riot or civil commotion or the stranding, sinking, burning derailment, upset or collision of a conveyance in or on which a vehicle is being transported on land or water

18 Restrictions on Indemnity 1. The corp is not liable to indemnify any person under comprehensive or collision coverage for loss or damage a) to tires b) mechanical fracture, failure or breakdown of any part of the vehicle c) caused by explosion within the combustion chamber, rust, corrosion, freezing or wear and tear unless loss or damage is coincidental with other loss or damage for which cover is provided eg. Loss by fire these are all covered. 2. The corp is not liable to indemnify any person under this Division for loss or damage a) caused by theft by vehicle by person in lawful possession of the vehicle under lease or rental conversion is unauthorized use of vehicle belonging to another which was originally in the legal possession of the person using it. b) cause by a voluntary surrender of title c) theft of vehicle by a person who resides with the insured or an employee of the insured d)to any contents of trailers except fittings and fixtures attached e) to motor vehicle licensed and insured as a trailer unless it is being operated as a trailer Special Notes Own damage includes manufactures equipment - includes a) available from the manufacturer as standard or optional equipment for that vehicle b) is attached to the vehicle by the manufacturer, deal or owner, includes replacement tires In the case of motor homes only fixtures and fittings not permanently attached that form part of the equipment of motor homes are covered. Limited indemnity for motor cycle helmets damaged in a collision Most other items can be insured Excess Special Equipment Endorsement Also covered are non manufacturer items of equipment with a limit $1000 on sound equipment $5000 other unnamed items, which must be attached Also there is co-insurance penalty if the declared value is, 90% of the actual cash value. (unless the actual cash value is, < $10000 and the actual cash value exceeds it by at least $1000) Lien holders 1. total loss of a vehicle, money paid jointly to the owner and any one or more lienholders as their respective interest appears 2. repairable damage money is paid to the garage on behalf of the owner, or to the owner or jointly to the garage and the owner Breaches of Conditions can invalidate coverage a) the insured fails to promptly report an accident to the corp to their prejudice b) a theft occurs and the vehicle owner fails to report within 48 hours c) insured fails to report an accident in accordance the provisions of the motor vehicle act d) the vehicle owner does not take steps to protect the vehicle after a loss has occurred and further damage results e) the vehicle owner has repairs completed before the vehicle is inspected by the corp f) the owner acquires a new vehicle and fails to transfer insurance and registration in accordance with the motor vehicle act g) the insured tows an unlicensed trailer that is required to be licensed

19 CHAPTER 10 - GENERAL PROVISIONS, DEFINITIONS AND EXCLUSIONS This applies to the SPF 1. There is no equivalent General Provisions, Definitions and Exclusion found in the ICBC regulations. ICBC cover is not broader or narrower, it is just different ICBC doesn t cover additional vehicles, but it doesn t exclude coverage if the vehicle is rented or used to carry explosives as long as the right rate class is used. Pleasure class allows operation for a max of six days each month for work or business ICBC regulations also do not contain an Automobile Defined section Newly acquired automobiles are not automatically covered on the same policy.. the are 10 days grace for reporting a newly acquired substitute vehicle the replace another vehicle which was sold ICBC regulations do not contain Two or More Automobiles section There is also no ICBC regulation that automatically transfers Third Party Liability to a towed trailer. There is no specific regulation respecting Out of Province trailers. Territory - policy only applies while auto being operated, used or stored or parked in Canada or US or upon a vessel traveling between these two ports.. no coverage for Mexico. *** same for ICBC Occupant Defined - very broad definition for occupant This means a person driving, being carried in or upon or entering or getting onto or alighting from an automobile. *** ICBC defines as a person operating or riding in a vehicle or camper and includes, a person entering or alighting, a person other than a garage service operator who is working in or on a vehicle owned by that person Consent of Owner no person is entitled to compensation under the policy who is an occupant of any automobile which is being used without the consent of the owner. *** ICBC does not specifically exclude an occupant from Third Party Liability, accident benefits are available for the driver and the occupant Garage Personnel Excluded no person who is engaged in a garage business is entitled to compensation under this policy while engaged in the use or operation of or while working upon or while an occupant of the auto in the course of that business unless the garage is working on it s own vehicle. *** ICBC garage exclusion garage personnel are covered under a garage policy Automobile Defined - ICBC has no definition In the policy the words the automobile mean a) the described automobile vehicle specifically described in the policy b) a newly acquired automobile insured s purchased additional and replacement vehicles, coverage is automatically extended to newly acquired vehicle must notify insurer in 14 days coverage is automatic but not free, premium is charged once endorsement is issued only coverages which are on all the insured vehicles apply doesn t apply if the insured s have valid insurance on the newly acquired vehicle or if all the vehicles owned by them are not insured. or are not insured by same insurer excludes those in business of garage ICBC allows 10 days in the case of a substitute vehicle, providing the other is sold. Title transfer and plate is current and compatible c) a temporary substitute automobile

20 not owned by the insured nor anyone residing at his residence, while being used as a substitute for the described automobile which is being repaired or sold etc. TP Liability and Acc. Benefits are extended to temporary substitute automobiles, Physical damage cover is also give by the additional agreements of section C which covers the insured s legal liability for damage to temp. substitute vehicles. ICBC provides legal liability coverage for Own Damage but there is no specific reference for TP liability, however there is cover under Non Owned Auto section and there are acc. Benefits. Drivers policy will respond rather than the owners policy where 1) temporary substitute vehicle is uninsured 2) owners limit of liability under 3 rd party liability is insufficient to pay a settlement. d) a borrowed vehicle any non-owned auto provided that: - is personally driven by the insured - is a private passenger type - the insured is an individual or are husband and wife - not in connection with garage business - not owned or regularly or frequently used by the insured or anyone at his premises - not owned, hired or leased by an employer of the insured - not used for carrying passengers for compensation or commercial delivery - coverage provided is same at the substitute vehicle coverage except no physical damage cover applies ICBC is similar accept doesn t restrict cover to private passenger type vehicles. Also excludes vehicles not licensed, exempted under the insurance act and operated without the consent of the owner. e) Trailers - The policy give unlimited permission to the insured to pull trailers, doesn t matter owned or non owned- Third Party Liab and acc. Benefits will apply to the trailers. ICBC does not automatically cover, must have separate plates and insurance Two or More Automobiles a) two or more automobiles are insured by the same policy each is considered as though it were insured by a separate policy. It is possible for the insured to have two or more automobiles insured by one policy with different limits and coverage applying to each vehicle. ICBC has no provisions, each must have a separate plate and policy b) Two or more vehicles can be insured by two separate policies in case there is an accident with a temp or borrowed vehicle, the loss is prorated between insurers limit of liab is combined, subject to the highest limit ICBC provides the same c) an automobile with a trailer attached shall be considered to be one vehicle in relation to limits of liability under TP Liab and Acc. Benefits. Under physical damage they are considered separate ICBC same with respect to TP Liability only, nothing under ACC. Benefits War Risks Excluded Not liable under Acc. Benefits or physical damage for any loss, damage, injury or death caused directly or indirectly by bombardment, invasion, civil war, insurrection, rebellion, or revolution, military or usurped power, operation of armed forces whether war declared or not. ICBC is the same Excluded Uses Unless permission is given by endorsement, the insured shall be liable under policy while: a) the auto is leased or rented to another - ICBC has specific rate class, these uses not excluded b) the auto is used to carry explosives or radioactive material - ICBC has specific rate class, use is not excluded c) the auto is used as a taxicab, public omnibus, livery, jitney or sightseeing conveyance for carrying passengers for compensation or hire.