Chapter 9 – General Provision, Definitions, Exclusion
Territory
· Covers incidents occurring in Canada or the USA
Spouse and same-sex partner defined
· Either of a man and a woman who:
o Are married to each other
o Have together entered into a marriage that is voidable or void
o Are not married and have cohabited continuously for a period of not less than 3 yrs or have cohabited in a relationship of some permanence if they are the natural or adoptive parents of a child
Automobile defined
· Under certain circumstances, coverage is extended to auto other than those specifically described in the policy
· The ‘described’ and ‘newly acquired’ auto are vehicles owned by the insured. ‘Temporary substitute’ and ‘other’ auto are vehicles which belong to someone else
· A trailer can be owned or non-owned
· The auto:
o A described auto
o A newly acquired auto
o A temporary sub auto
o Other auto driven by you or spouse
o Trailers
Described auto
· A described auto – any auto specifically shown on the certificate of auto insurance. Should be a vehicle that is registered in the name of the policyholder – named insured
· If a premium is shown on the certificate of auto insurance for a specific coverage then this coverage may be available in the event of a loss for other types of auto under this policy
· Coverage could include:
o Liability
o AB
o Uninsured Auto
o DCPD
o Loss or damage
Newly acquired auto
· An auto or trailer that you acquire that is not covered under any other policy
· Can be either a replacement or an additional auto
· Coverage is not extended to a newly acquired auto if you are in the business of selling auto
· Newly acquired auto automatically insured as long as you inform insurer w/in 14 days form the time of delivery and as long as:
o The insurer insures all autos you own
o Any claim you make for the additional auto is made against a coverage that the insurer provides for all your other autos
Temporary substitute auto
· An auto that is temporarily used while a described auto is out of service b/c its breakdown, repair, servicing, theft, sale, or destruction
· The primary coverage under third party liability will mainly fall on the registered owner’s policy
· Although non direct damage is provided on your owner’s policy for the TSA, legal liability protection for the physical damage to the vehicle is provided
· 2 situations in which third party liability coverage of the driver of a TSA will respond rather than or in addition to the owner’s policy:
o where the TSA is uninsured or
o where the owner’s limit of liability is insufficient
· Coverage that apply:
o Liability
o AB
o Uninsured auto
o DCPD
Other auto (non owned)
· Coverage that apply:
o Liability
o AB
o Uninsured auto
o DCPD
· For other non owned auto to be covered, the following conditions apply:
o Both the other auto and a described auto must not have a manufacturer’s gross vehicle weight rating of more than 4,500 kg
o The named insured is an individual or if owned by 2 people the named individuals are spouses of each other
o Neither you nor your spouse is driving the other auto in connection w/ the business of selling, repairing, maintaining, storing, servicing or parking autos
o The other auto is not being used to carry paying passengers or to make commercial deliveries
o For all coverages except AB, the other auto cannot be one that you or anyone living in your dwelling owns or regularly uses
o If you are a corporation, partnership, or other entity, the employee or partner for whose regular use a described auto is supplied and their spouse will be covered when they driver the other auto given the same conditions as above
o For DCPD coverage the other auto cannot be a described auto in a motor vehicle liability policy
· Auto not owned by you and not fitting the definition of TSA are classed as other autos
· Vehicles that carry their own third party liability insurance will be primary – your policy will respond if called upon for third party liability, AB and uninsured auto
Trailers
· Any trailer used in connection w/ the auto is insured for:
o Liability
o AB
o Uninsured auto
· Any trailer you own and not described in the policy is covered for DCPD:
o If attached to an auto not more than 4,500 kg or if not attached is normally used w/ an auto not more than 4,500 kg
o It is not designed or used for living in, to carry passengers, or for commercial purposes
· When a trailer is described on a policy it loses its status as a trailer and becomes a described auto if a premium is charged under the corresponding sections of coverage
*** Exhibit 9-1 & 9-2 page 9 & 10 ***
Two or more auto insured
· Under the same policy:
o Each auto will be treated as if it were insured separately for claims
o An incident involving a non owned auto, the highest limit to anyone auto applies
· Under separate policy:
o Each auto will recover from its respective policy
o An incident involving a non owned auto, the amount paid will be a fraction of the highest policy limit. This fraction will be the proportion that the limit under this policy bears to the total of the limits of all the policies
Trailers and towing
· An auto pulling one or more trailers will be treated as a single auto when determining payouts under liability, AB, uninsured auto coverages
· Trailers will be treated as separate auto for purposes of determining the deductible and how much will be paid under DCPD and loss or damage coverages
· An incident involving 2 or more auto owned by different persons and attached to each other, the insurer of each auto will compensate its insured for DCPD and loss or damage coverage
Excluded uses
· Except for certain AB coverage there is no coverage if:
o The auto is used to carry explosive or radioactive material or
o The auto is used as a taxicab, bus, a sightseeing conveyance or to carry paying passengers
· The following are not considered carrying paying passengers:
o Giving a ride for a ride
o Sharing the cost of an occasional trip w/ others in the auto
o Carrying a domestic worker hired by you or your spouse
o Occasionally carrying children to or from school activities that are conducted w/in the educational program
o Carrying current or prospective clients and customers
o Reimbursing volunteer drivers for their reasonable driving expenses including gas, vehicle wear and tear and meals
· For an additional premium specific endorsements are available to delete each exclusion from the policy
Excluded drivers and driving w/out permission
· Except for certain AB coverage there is no coverage if for anyone (including occupants) if the auto:
o Is being operated by a person w/out the owner’s consent
o Is being driven by someone specifically excluded from this policy
Rented or leased auto
· Except for certain AB coverage there is no coverage if the auto is rented or leased to another. If an insured is using the auto for an employer’s business and is paid for using it that will not be considered as renting or leasing
Garage workers not covered
· No person who sells, repairs, maintains, stores, services, or parks auto as part of a business is covered while involved in conducting that business
· The claim would be settled under the garage policy even though the mechanic was operating the vehicle w/ the customer’s consent
War risk excluded
· War activities excluded – bombardment, invasion, civil war, insurrection, rebellion, revolution, coup, or actions of armed forces while engaged in a war, whether declared or not
Sample Review Questions - Automobile Insurance (Part 1)
1. The territorial limitations in an auto policy – Canada or the USA
2. To avoid a gap in coverage, the insured has 14 days to report a newly acquired auto.
3. An occupant of a motor vehicle is anyone in, on, getting in/out of the vehicle.
4. When a driver of an auto does not have the consent of the owner there is no coverage for anyone including occupants except for certain AB coverage.
5. Garage personnel are excluded from coverage b/c garage personnel are covered under a Garage policy (OPF 4) when they are working on customer’s vehicles.
6. The definition for ‘the automobile’ is not the same for all sections of the policy. A described auto is any auto specifically shown on the certificate of auto insurance. The automobile is a described auto, newly acquired auto, temporary substitute auto, other autos driven by you or your spouse, or trailers in certain circumstances.
7. Coverage for a newly acquired auto will apply before the owner advises his insurer if:
- we insure all autos you own
- any claim you make for the additional auto is made against coverage that we provide for all your other autos
8. Temporary substitute – an auto that is temporarily used while a described auto is out of service; not used by anyone b/c of its breakdown, repair, servicing, theft, sale or destruction.
9. Coverage for the temporary substitute include:
- Liability
- AB
- Uninsured auto
- DCPD
10. The policy of a driver of a temporary substitute vehicle will respond when there is negligence on the part of the driver.
11. Other auto (non owned) – auto not owned by you and not fitting the definition of TSA. What types of situations; virtually everyday situation where one would drive another’s vehicle.
12. Any trailer used in connection w/ the auto is insured for:
- Liability
- AB
- Uninsured auto
Any trailer you own and that is not described in this policy is covered for DCPD when:
- attached to auto not more than 4,500 kgs or if not attached normally used w/ an auto not more than 4,500 kgs
- not designed or used for living in, to carry passengers, or for commercial purposes
13. An individual who owns several vehicles can insure them all under one policy or insure them under separate policies.
14. Excluded auto uses:
- used to carry explosives or radioactive material
- used as a taxicab, bus, a sightseeing conveyance or to carry paying passengers
15. The uses of the auto referred to in Q. 14 are excluded b/c each of those situations increase exposure for the insurer. That would require higher premium for everyone, which would be unfair since many auto owners do not have these exposures.
16. These excluded uses can be covered. For an additional premium specific endorsements are available to delete each exclusion from the policy.
17. The following are not considered as situations involving carrying paying passengers:
- giving a ride for a ride
- sharing the cost of an occasional trip
- carrying a domestic worker hired by you or your spouse
- occasionally carrying children to or from school activities that are conducted w/in the educational program
- reimbursing volunteer drivers for their reasonable driving expenses
18. A vehicle loaned to you while you car is in the garage for repair would be considered a TSA b/c your car is out of service for repair and cannot be used by anyone insured by the policy.
19. If you borrow a 5-ton truck this would not have any coverage under ‘other auto’ section as it is more than 4,500 kgs.
20. It is not advisable to immediately delete from your policy a vehicle that has been totally demolished in an accident b/c by doing so you are eliminating the extended benefit provided for the TSA that the insured may be operating a the time.
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