Automobile Insurance C14

Chapter 17 – Sask, Man, BC, AB, NB, Nfld, NS, and PEI

Introduction

·         Sask, Man, BC have government operated insurance plans

·         The main objective is the same as that of private insurers – to protect auto owners and drivers as well as innocent third parties, against losses arising out of auto accidents

·         Where government insurance plan exists no policy is issued

·         When individuals apply for their vehicle registration they automatically must purchase insurance at the same time

·         When additional coverage is purchased from the government, they are identified on the registration and no policy is issued

·         When additional coverage is purchased from private insurers, extension policies are issued

Province	Plan	Basic Coverage
Saskatchewan	Auto Fund	Third party liability, Personal injury, Comprehensive
Manitoba	Autopac	Third party liability, Personal injury, All perils
BC	Autoplan	Third party liability, Accident benefits

*** Student should be able to explain what the basic compulsory coverages are including limits and deductibles, and what additional coverages are available and from whom.  Also be able to comment on the issue of fault

Saskatchewan

·         First province to develop a government insurance plan – administered by Saskatchewan Government Insurance (SGI), a crown agency

·         Insurance premium is payable on every motor vehicle license at the time the license plate is purchased – referred to as license plate insurance

·         The Automobile Accident Insurance Act is the master policy and the registration certificate and driver’s license are proof of insurance

·         Basic compulsory coverage consists of third party liability, personal injury benefits, and comprehensive insurance

·         Increased limits and a reduced deductible may be purchased through SGI or through private insurers by means of extension policies

·         The Personal Injury Protection Plan (PIPP) – a no fault personal injury benefit plan that provides substantial limits for income replacement, death benefits, education allowance, and funeral expenses.  It limits the right to sue to amounts in excess of the limits provided

·         Comprehensive includes collision and upset – subject to deductible

·         Majority of private insurers do not provide the personal injury benefits extension

Summary of coverages

(see page 6)

Loss situations

(see page 7)

 

 

 

Manitoba

·         Autopac administered by the Manitoba Public Insurance Corporation (MPIC)

·         No fault system called the Personal Injury Protection Plan (PIPP)

·         Basic compulsory coverage consists of third party liability, personal injury protection and all perils

·         No policy is issued for the basic plan.  The insuring agreements, conditions and limitations are set out in Regulations made under the MPIC Act – Act and regulation in place of policy

·         Motor vehicle registration serves as proof of insurance

·         A basic insurance premium is charged on every driver’s license.  Drivers may earn merit points, which will be used to discount premium.  Demerit points for accidents/convictions will result in premium surcharges

·         Extension insurance to increase limits or reduce deductibles may be purchased from Autopac or from private insurers

·         Have a right to sue third party who is outside of the province or when a vehicle that is not covered under Autopac is involved – snowmobile

Summary of coverages

·         There are no provisions for increasing limits under the personal injury protection plan through Autopac.  Increased limits under this section may be purchased from private insurers

·         (see page 10)

Loss situation

(see page 12)

British Columbia

·         Autoplan – requires every licensed vehicle owner to purchase basic Autoplan insurance when the vehicle plates are purchased

·         There is no policy – vehicle registration services as evidence of insurance

·         The license plate number serves as the Corporation’s policy number

·         Higher liability limits, higher AB limits, and physical damage coverage may be purchased from the Corporation or private insurers

·         Basic compulsory coverages include third party liability and no fault AB

Summary of coverages

(see page 15)

Loss situations

(see page 16)

Alberta, Newfoundland, Nova Scotia, and PEI

·         Alberta, Nfld, NS, PEI still have a tort based system of auto insurance operated by private insurers

·         Accident benefits are mandatory in all these provinces except Nfld

·         Min third party liability is $200,000 except in NS which is $500,000

Summary of coverages

·         Liability may be increased subject to u/w considerations

·         AB may be increased

·         In Nova Scotia, insurers are obligated to offer optional AB in the same form as the mandatory AB but w/ increased limits and duration

·         AB comprises of:

o    Medical, rehabilitation, and funeral expense

o    Death benefits and loss of income payments

o    Supplemental benefits respecting accidents occurring in Quebec – not applicable to NB and NS

·         Alberta, Uninsured Motorist coverage is provided under AB

·         No deductible for fire, lightning, or theft of the entire vehicle

(see page 17)

Loss situation

(see page 18)

New Brunswick

·         Operated entirely thought the private sector

·         Min liability is $200,000

·         2 types of S.P.F.

o    S.P.F. No 1 – Standard Form

o    S.P.F. No 1 (NF) – No Frills: offers reduced benefits at a lower rate compared to the Standard Form.  AB and medical benefits are decreased by half, $1000 deductible for property damage.  Deductible can be increased

·         Direct compensation for vehicle damage introduced in Jan 2005

Summary of coverages

·         Same as those for Alberta, Nfld, NS, PEI except NB has direct compensation property damage coverage

·         DCPD – insured’s own insurer will indemnify them to the extent they are not at fault.  Standard deductible $1000 on No Frills policy

Loss situation

(see page 20)

Sample Review Questions -  Automobile Insurance (Part 1)

1.     The major difference b/w a crown corporation and a private insurer is that a crown corporation is the sole provider of certain basic coverages w/in the province of operation.

2.     The main objective of a crown corporation and private insurers is the same – to protect auto owners and drivers, as well as innocent third parties, against losses arising out of auto accidents.

3.     Extension policy – when additional coverages are purchased from private insurers instead of the government insurer, a policy similar to the standard auto policy will be issued.  These are referred to extension policies.

4.     The provincial Insurance Acts and Motor Vehicle Acts and Automobile Insurance Act are legislations that govern automobile insurance.

5.     The vehicle registration and driver’s license provides evidence of auto insurance in those provinces having government plans.

6.     An insured would purchase extension insurance when they want higher limits or lower deductibles.

7.     In Saskatchewan, Manitoba, and BC extension policies can be purchased from the government insurer or from private insurers.

8.     Saskatchewan was the first province to introduce government auto insurance plan.

SASKATCHEWAN

9.     Insurance premium is payable on every motor vehicle license at the time the license plate is purchased.

10.   Personal Injury Protection Plan – a no fault personal injury benefits plan.  It provides substantial limits for income replacement, death benefits, education allowance and funeral expense payments.  It limits the right to sue a third party to recover such expenses to amounts in excess of the limits provided by the Regulations.

11.   PIPP – Personal Injury Protection Plan.

12.   SGI – administers the automobile accident insurance act for the government.

SGI CANADA – the competitive arm of SGI.

13.   Comprehensive coverage includes collision and upset, thus it is similar to all perils.

14.   License plate insurance – insurance premium payable on every motor vehicle license at the time the license plate is purchased.

15.   The basic auto insurance plan in Saskatchewan is called the Automobile Accident Insurance Act.

16.   The basic mandatory auto coverage in Saskatchewan is third party liability, personal injury benefits and comprehensive insurance.

17.   The PIPP limits the right to sue a third party to recover such expenses to amounts in excess of the limits provided by the Regulation.

MANITOBA

18.   A basic insurance premium is charged on every Manitoba driver’s license.

19.   The Personal Injury Protection Plan – a no-fault system of auto insurance.

20.   PIPP – Personal Injury Protection Plan

21.   MPIC – Manitoba Public Insurance Corporation administers the Autopac insurance plan.

22.   The Autopac is the basic auto insurance plan in Manitoba.

23.   The basic mandatory auto coverage in Manitoba is third party liability, personal injury protection and all perils physical damage.  Specified classes may not be covered against all perils.

24.   Insuring on a replacement cost basis is available on new vehicles for up to 2 years.

25.   There are no provisions for increasing limits under the PIPP coverages.  No-fault payments are generous and are indexed.  Increased limits under this section may be available from private insurers.

26.   Payments under the PIPP do not preclude an injured person from proceeding w/ a claim against a third party who is from outside of the province or when a vehicle that is not covered under Autopac is involved.

BRITISH COLUMBIA

27.   Premium is paid when the vehicle plates are purchased.

28.   ICBC is the crown corporation known as the Insurance Corporation of British Columbia and their mandate is to provide automobile insurance to the public.

29.   The Autoplan is the basic auto insurance plan in BC.

30.   The basic mandatory auto coverage in BC is third party liability and no-fault accident benefits.

31.   The provision in BC for insuring auto on a replacement cost basis is that it is available on new vehicles for up to 2 years.  Provided under policy APV 297.

32.   Liability of vehicle owners or operator is based on ordinary negligence.

33.   Physical damage coverage can be purchased from the Corporation or from private insurers.  It is not part of the compulsory coverages.

34.   An injured person must first exhaust all amounts, which they are entitled to under the accident benefits coverage or waive their claim before they are permitted to sue.

ALBERTA AND ATLANTIC PROVINCES

35.   The one thing w/ respect to auto insurance that BC has in common w/ this group of provinces as compared to the other provinces is that it also provides no-fault accident benefits.

36.   Auto insurance in these provinces is operated entirely by private sector insurance companies.

37.   Coverages that are mandatory in Alberta are: third party liability, AB, and uninsured motorist.  Physical damage coverage is optional.

38.   Newfoundland differs from other provinces in that accident benefits are not a mandatory coverage.

39.   Own damage coverage available are: all perils, collision, comprehensive, and specified perils.  All are subject to deductibles although no deductibles apply to losses resulting from fire, lightning or theft of the entire vehicle.  There is a choice of deductibles.

40.   The main features of accident benefits are:

-          medical, rehabilitation, and funeral expenses

-          death benefits and loss of income payments

-          supplemental benefits respecting accidents occurring in Quebec (this is not applicable to New Brunswick or Nova Scotia)

41.   Coverage in New Brunswick differs from Alberta and other Atlantic provinces in that they have DCPD coverage.