C14 Automobile Insurance Part 1 (Atlantic Provinces) Addendum June 2014

Transcription

1 C14 Automobile Insurance Part 1 (Atlantic Provinces) Addendum June 2014 (To be used with 2014 edition of student resource guide.) 1 3 Key Point Review Questions 1 and 2 have been replaced with the following: 1. Briefly explain how automobile insurance has developed with the automobile. 2. How is automobile insurance distributed in Canada? 1 4 Model Multiple-choice Question 5 has been replaced with the following: 5. Who controls the wording of automobile insurance policy forms and endorsements in Canada? (A) The federal Superintendent of Insurance (B) The provincial Superintendent of Insurance (C) The municipal Superintendent of Insurance (D) The insurers who issue the policies or endorsements 1 7 Model Multiple-choice Answers 4 and 5 changed to the following: 4. (D) Newfoundland is the only province in Canada where Accident Benefits are optional. (Study 1 page 4) 5. (B) The provincial Superintendent of Insurance (Study 1 page 5) 1 7 Answer Key for Study 1 page references for answers changed as shown in the B. Multiple Choice C. Narrative D. Application 1 a, b, c, d, e Addendum for C14 Atlantic SRG 2014ed June 2014 Page 1 of 7

2 2 7 8 Answer Key for Study 2 page references for answers changed as shown in the Question Page B. Multiple Choice C. Narrative 1 a a Answer Key for Study 3 page references for answers changed as shown in the B. Multiple Choice C. Narrative 1 a 3 3 b 3 4 D. Application 1 a 3 6 B Answer Key for Study 4 page references for answers changed as shown in the B. Multiple Choice C. Narrative D. Application 1 a 4 3 B 4 3 c Test No. 1 Question 1 revised as follows (A revised version of Test No. 1 is also attached to this addendum.): 1. (a) State TWO (2) ways that automobile insurance is distributed in Canada. (4 marks) (b) Name the six standard automobile policy forms in Canada. (c) State the type of automobile risk covered by each standard policy form. (d) Explain the use of insurance policies in provinces where crown corporations provide automobile insurance coverage. (6 marks) (6 marks) (4 marks) Please insert Study 5 (attached) into the student resource guide. Addendum for C14 Atlantic SRG 2014ed June 2014 Page 2 of 7

3 7 7 8 Answer Key for Study 7 page references for answers changed as shown in the B. Multiple Choice C. Narrative D. Application 1 a 7 3 c Answer Key for Study 8 page references for answers changed as shown in the B. Multiple Choice C. Narrative D. Application Key Point Review Question 15 has been replaced with the following: 15. Why are war risks excluded from coverage? Answer Key for Study 9 page references for answers changed as shown in the B. Multiple Choice C. Narrative D. Application 1 a 9 3 b 9 4 c Model multiple-choice Question 1 has been replaced with the following: 1. The Prohibited Use by Insured condition provides that, except for Absolute Liability and certain allowances under Accident Benefits, there is no coverage if (A) the insured uses the vehicle to carry any passengers for compensation or hire. (B) the insured uses the vehicle to carry any nuclear material. (C) the insured uses the vehicle for any illicit or prohibited trade or transportation. (D) the insured uses the vehicle even when his or her policy is cancelled for nonpayment of premium. Addendum for C14 Atlantic SRG 2014ed June 2014 Page 3 of 7

4 10 7 Please note that numbering of Model Multiple-Choice Answers has been corrected to proper sequential order. Model Multiple-Choice Answer 5 has been changed to the following: 5. (B) In PEI it is two years (Study 10 page 12) Answer Key for Study 10 page references for answers changed as shown in the B. Multiple Choice C. Narrative D. Application 1 a 10 3 b c 10 8 d Answer Key for Study 11 page references for answers changed as shown in the B. Multiple Choice C. Narrative D. Application 1 a 11 4 b 11 9 c Answer Key for Study 12 page references for answers changed as shown in the B. Multiple Choice C. Narrative 1 a 12 3 b 12 3 c 12 4 D. Application 1 a b Addendum for C14 Atlantic SRG 2014ed June 2014 Page 4 of 7

5 13 7 Model Multiple-Choice Answer 2 has been changed to the following: 2. (A) Trending (Study 13 page 9) Answer Key for Study 13 page references for answers changed as shown in the B. Multiple Choice C. Narrative D. Application 1 a Answer Key for Study 14 page references for answers changed as shown in the B. Multiple Choice C. Narrative 1 a 14 4 D. Application 1 a Model Narrative Question 2 (a) changed to the following: List FOUR (4) things that are NOT considered for fault determination under the Driver s Fault Chart. (4 marks) Answer Key for Study 15 page references for answers changed as shown in the B. Multiple Choice C. Narrative 1 a 15 6 b 15 6 c Addendum for C14 Atlantic SRG 2014ed June 2014 Page 5 of 7

6 2 a b D. Application 1 a b c 15 4 d Model Application Question 1, third paragraph has been changed to make it clear that Anna has no collision coverage, as follows: Anna has an OAP 1 with basic coverage and no Collision coverage. Darryl has an OAP 1 with basic coverage plus Collision coverage with a $500 deductible Model Narrative Answer 1(b), heading changed to the following: Ontario Declaration of Applicant (Study 16 page 4) Answer Key for Study 16 page references for answers changed as shown in the B. Multiple Choice C. Narrative 1 a 16 4 b a D. Application 1 d Answer Key for Study 17 page references for answers changed as shown in the B. Multiple Choice C. Narrative 1 b 17 8, 12 c 17 8, 12 D. Application 1 b 17 5 C (i) 17 8, 12 Addendum for C14 Atlantic SRG 2014ed June 2014 Page 6 of 7

7 C14 (Atlantic) Test No.1 (Covers Studies 1, 2, 3 and 4) 1. (a) State TWO (2) ways that automobile insurance is distributed in Canada. (4 marks) (b) Name the six standard automobile policy forms in Canada. (c) State the type of automobile risk covered by each standard policy form. (d) Describe the use of insurance policies in provinces where crown corporations provide automobile insurance coverage. (6 marks) (6 marks) (4 marks) 2. Explain any THREE (3) of the following legal concepts: (a) Negligence (b) Onus of proof (c) Subrogation (d) Absolute Liability 3. Discuss the effect on automobile insurance of each of the three levels of legislation. (15 marks) (15 marks) 4. (a) What functions does an automobile application perform? (5 marks) (b) Who prescribes the actual form of application to be used for automobile insurance? Explain. (c) What must an insurer do if it issues a policy which differs from the application? What are the possible consequences if proper procedures are not followed? (d) The application asks for details of the described automobile. What specific information is required and why is it needed by an insurer? (e) What are the possible consequences of giving false information with respect to the vehicle insured? (5 marks) (10 marks) (5 marks) (5 marks) 5. Discuss no-fault as it relates to automobile insurance. (15 marks) Total = 100 marks Addendum for C14 Atlantic SRG 2014ed June 2014 Page 7 of 7

8 C14 SRG Third Party Liability (Section A) 5 1 Learning Objectives When you finish this study, you should be able to meet the following objectives: Discuss the legal basis, in your province, for liability arising from the ownership or operation of an automobile. Under Section A of the policy Identify the individuals who will be indemnified; State the coverage provided; and Explain the reason for each of the exclusions. Summarize the additional agreements of insurer. Summarize the agreements of insured. 5 1

9 C14 AUTOMOBILE INSURANCE PART1 (ATLANTIC PROVINCES) Contents Overview Learning Objectives Questions on Study 5 A. Key Point Review Questions B. Model Multiple-Choice Questions C. Model Narrative Questions D. Model Application Question Answer Key for Study 5 B. Model Multiple-Choice Answers C. Model Narrative Answers D. Model Application Answer Scoring and Next Steps Use the balance of this page for notes or questions you want to record about your study plans. 5 2

10 SRG 5 THIRD PARTY LIABILITY (SECTION A) Questions for Study 5 (Do not submit for marking.) A. Key Point Review Questions 1. Where is the legal basis for liability arising out of motor vehicle accidents found in your province? 2. What does Third Party Liability cover? 3. Who is insured under the Third Party Liability section? 4. State two defences to absolute liability available to insurers. 5. Who must prove that a vehicle was used without consent? 6. There are three parts to the Third Party Liability section of the automobile policy; one of them is the preamble, including exclusions. Name the other two parts. 7. With respect to the Third Party Liability section: (a) List the exclusions. (b) Name the Additional Agreements of Insurer. Where appropriate, state whether payments are part of the policy limits or not. (c) Name the Additional Agreements of Insured. 8. Distinguish between use and operation of an automobile. 9. (a) What are minimum limits? (b) Who determines minimum limits? (c) What are priorities of payment? (d) When do priorities of payment come into operation? (e) State the minimum limits applicable in the provinces and territories. (f) State the priorities of payment for two provinces. 10. Can insureds hire their own solicitors to defend them against actions brought by third parties injured in automobile accidents with them? Explain. 5 3

11 C14 AUTOMOBILE INSURANCE PART1 (ATLANTIC PROVINCES) B. Model Multiple-Choice Questions Circle the most correct answer for each multiple-choice question. 1. Under the preamble of Third Party Liability (Section A) the term use means (A) clearing ice from the vehicle s windows. (B) a passenger getting out of the vehicle. (C) a passenger grabbing the steering wheel. (D) all of the above 2. Which of the following is excluded from coverage as stated in Third Party Liability (Section A)? (A) Damage to property carried by the insured in the automobile (B) Damage to property attached to the insured s vehicle (C) Damage to property carried by passengers in the vehicle (D) All of the above 3. Under the Additional Agreements of Insurer section of Third Party Liability (Section A), if an insured is involved in accident that occurs in Quebec, what will the insurer pay? (A) The total cost of the claim (B) The minimum limits of the jurisdiction (Quebec) (C) The minimum limits stated in the policy (D) The minimum limits stated in the policy, but only if it was a no-fault accident 4. In which province is the minimum policy limit set at $50,000? (A) Manitoba (B) Saskatchewan (C) Nova Scotia (D) Quebec 5. Priorities of Payment are heavily weighted in favour of (A) bodily injury claims. (B) property damage claims. (C) loss of use or damage claims. (D) uninsured motorist claims. (2 marks each) 5 4

12 SRG 5 THIRD PARTY LIABILITY (SECTION A) C. Model Narrative Questions 1. Describe how Section A.1 - Direct Compensation - Property Damage works in New Brunswick. (5 marks) 2. Outline the Additional Agreements of Insurer and Agreements of Insured under Section A. (15 marks) 5 5

13 C14 AUTOMOBILE INSURANCE PART1 (ATLANTIC PROVINCES) D. Model Application Question 1. You are a broker in St. John, New Brunswick. Hector, the insured, has purchased an Owner's Policy from you for his sports car. Hector's brother, Derek, borrowed Hector's sports car without his consent to go to the grocery store. While driving to the grocery store, Derek is involved in an automobile accident with a third party. As a result of the accident, the third party is injured and there is $10,000 of damage to the sports car. Derek is deemed to be 100% at fault for the accident. (a) Is Hector legally liable for the damages that Derek caused while driving his vehicle? Explain. (7 marks) (b) What if the accident occurred in: (i) Newfoundland (7 marks) (ii) Nova Scotia (6 marks) 5 6

14 SRG 5 THIRD PARTY LIABILITY (SECTION A) Answer Key for Study 5 Please refer directly to the textbook to confirm your answers for Section A s Key Point Review Questions. B. Model Multiple-Choice Answers 1. (D) Under the preamble of the Third Party Liability (Section A) of the policy the term use can be distinguished from operation. The courts have determined that use may include such things as cleaning a motorcycle, drilling a hole in an automobile in preparation for the connection of a trailer, spilling an oil load, a passenger grabbing the steering wheel, or getting out of the automobile. (Study 5 page 6) 2. (A) Damage to property carried by the insured in the automobile is excluded under Third Party Liability (Section A). (Study 5 page 7) 3. (B) The insurer will pay up to the minimum limits of the jurisdiction within Canada where the accident occurs. The insurer will increase the insured s purchased limit to bring it up to the minimum limit required in the jurisdiction where the loss occurred. (Study 5 page 9) 4. (D) Quebec. (Study 5 page 9, 10) 5. (A) Bodily injury claims. (Study 5 page 10) Total = 10 marks C. Model Narrative Answers 1. Direct Compensation (New Brunswick) (Study 5 pages 7) - In January 2005, New Brunswick introduced Direct Compensation Property Damage coverage under Section A.1 of the SPF 1. - This coverage responds when insureds are involved in accidents for which third parties are wholly - or partially responsible, - so that insured deal only with their own insurer, and do not have to claim from the third party s insurance company. - The insureds own insurer will indemnify them for the cost of repairs to the extent they were not at fault in the accident. - Fault is determined in accordance with the Insurance Act - and Fault Determination Rules made under the Act. (5 marks) 2. Additional Agreements of Insuer / Agreements of Insured (Study 5 pages 8-10) - The insurer agrees to: - (1) Investigate, - negotiate - and settle all reported claims; - (2) Defend any civil action brought against the insured, - even if it is groundless; - The insured agrees the insurer is irrecovably appointed the insured's attorney - (3) Pay court costs assessed against the insured (these are subject to well defined legal Rules of Practice ) - and pay post-judgment interest on the insured portion of judgments for damages against the insured. - The insured is responsible for paying interest on that part of a judgment that is in excess of the policy limits. - Pre-judgment interest is included in the limit of liability available; 5 7

15 C14 AUTOMOBILE INSURANCE PART1 (ATLANTIC PROVINCES) - (4) Reimburse the insured for out-of-pocket expenses for immediate medical aid to third parties - this applies whether or not the insured is legally liable; - (5) The insurer will pay up to the minimum limits of the jurisdiction within Canada where the accident occurs. - The insurer will increase the insured s purchased limit to bring it up to the minimum limit required in the jurisdiction where the loss occurred. - If the insured s purchased limit is already greater than the minimum, then the policy limit is payable. - (6) The insurer agrees that it will not use a defense to a claim which could be set up in the insured s home province - or territory if such a defense may not be used where the accident occurred. (15 marks) D. Model Application Answers 1. Coverage (a) Third Party Liability (New Brunswick) (Study 5 page 3) - Hector will not be liable for the damages caused by his brother Derek if he can prove that his automobile was used without his consent - In New Brunswick the basis of legal liability is set out in the Motor Vehicle Act, Part V Civil Liability and Liability for Motor Vehicle infractions: - Sec. 267(1): The owner of a motor vehicle or farm tractor is liable as well as the driver thereof to an action for tort as a result of negligence in the operation of the motor vehicle. - or farm tractor - unless the motor vehicle or farm tractor was at the time of the negligent operation thereof in the possession of some person other than the owner without the owner s consent. - Sec. 267(2): The subsection modifies 267(1) in that the onus is with the owner to prove the vehicle was being used without consent. - Section 269: This section further modifies 267(1) in that if the owner has made a bona fide sale - or transfer of title or interest of the vehicle, the owner is not liable. - The vehicle must also have been delivered to the purchaser before the negligent operation. - Note that both the owner and driver are liable for third party losses. - Coincidentally, the above sections also provide the insurer s only defenses to absolute liability: - lack of consent of the owner - the onus of proof is with the owner; - and bona fide sale or transfer of title of the insured vehicle. (7 marks) (b) (i) Third Party Liability (Newfoundland) (Study 5 pages 3-4) - Hector will be responsible for the damages caused by his brother Derek - In Newfoundland the basis of legal liability is set out in the Highway Traffic Act, Part IX which deals with the basis of legal liability Legal Proceedings, Miscellaneous Offenses and Penalties: - Sec. 200.(1): Without effect upon the liability of the driver of a vehicle, the owner of a vehicle is liable for loss or damage sustained by a person because of negligence in the operation of the vehicle unless the vehicle 5 8

16 SRG 5 THIRD PARTY LIABILITY (SECTION A) was without the owner s consent in the possession of some person other than the owner. - Sec. 200(2): A person driving a vehicle who is living with and as a member of the family of the owner of the vehicle shall be considered to be in a possession of it with the owner s consent unless the contrary is proved. - Notice that this is slightly different than for New Brunswick in that a family member of the same household as the owner is considered to be operating the vehicle with the owner s consent unless the owner proves otherwise. - These two sections still leave the owner with the onus to prove the vehicle was used without consent, if that was the case. - Although no mention is made of sale or transfer of title of the vehicle as in the Motor Vehicle Act for New Brunswick, the Highway Traffic Act describes the owner in Sec. 198, so that the same two defenses to absolute liability are available. Owner means: - the person to whom the vehicle is registered or who holds legal title - the mortgagor, if the mortgagor is entitled to possession - the person in possession of the vehicle in the case of a hire-purchase agreement - the buyer under a conditional sale contract, if the buyer is entitled to possession. (7 marks) (ii) Third Party Liability (Nova Scotia) (Study 5 page 4) - Hector will be responsible for the damages caused by his brother Derek - In Nova Scotia the basis of legal liability is set out in the Motor Vehicle Act which provides the basis for legal liability under the heading, Liability of Owner: - Onus of proof of liability (1): Where any injury, loss or damage is incurred or sustained by any person by reason of the presence of a motor vehicle upon a highway, the onus of proof; - (b) that such injury, loss or damage did not entirely or solely arise through the negligent or improper conduct of the operator of the motor vehicle, shall be upon the owner or operator of the motor vehicle. - The Act goes on to place with the owner the onus of proof that the vehicle was being used without consent, if that was the case, and refers to family members in the same way as the Highway Traffic Act in Newfoundland. - Owner is also defined in much the same way in the Interpretation section of the Act, so that again, the same two defences to absolute liability are available as present in New Brunswick and Newfoundland. (6 marks) Total = 20 marks 5 9

17 C14 AUTOMOBILE INSURANCE PART1 (ATLANTIC PROVINCES) Scoring and Next Steps 100% 80% 60% 40% Nicely done! You have completed this study of the student resource guide. Now is the time to see how you did. This step is one that you should not ignore, as it will measure your understanding of the study material you have just completed. It is important to be comfortable with the information and concepts covered in this study before progressing to subsequent studies. 20% How it works 1. Tally up your marks from sections B, C, and D and enter your marks in the appropriate spaces below. 2. Add the marks from the two sections together for your total mark for the study. Enter that figure on the Total marks line below. 3. Calculate your percentage score by dividing your total mark by the total possible marks, and then multiplying the answer by 100. Enter this in the Percentage line below. Total marks for multiple-choice questions in Section B /10 Total marks for narrative questions in Section C /20 Total marks for the application question in Section D /20 Total marks /50 Percentage ( /50) x 100 = % 4. Check your percentage score against the scale below to gauge how well you did and reflect on your options before moving on to the next study. Your score From 80% to 100% From 60% to 79% From 0% to 59% Your next steps Excellent job! You are ready to advance to the next study. Review any material that you feel uncertain about to prepare yourself even more. Good work. Review the questions you did not receive marks for. Refer to the text and answer key when examining your own answers, so you can correct your understanding. A strong grasp of the information in this study will prepare you for the next study. Take this opportunity to strengthen your fundamental understanding of this study. Consider reviewing the material in the text and redoing the test. Once you feel comfortable with the material, advance to the next study. 5 10