Auto Insurance Notes

Auto Insurance Basics
Insuring Owned Automobiles

3 Types of Automobile Insurance Coverage:
1. 3rd Party Liability
2. Accident Benefits: personal injury (no-fault)
3. Loss of or Damage to Insured Automobile
Auto Insurance is different in all provinces
2 Types of Insurers: private & government (compulsory)

1. Government Insurers (compulsory): in BC, SK, MB
a. Coverages Differ by Province: coverage can be modified (i.e. increase 3 rd party liability or decrease
deductibles).
i. BC: 3rd Party Liability: $200,000 ; Accident Benefits: Included ; Physical Dmg: Optional
ii. MB: same ; same ; $400 Deductible
iii. SK: same ; same ; $700 Deductible
b. Private insurers compete for excess coverages only. Ex:
i. 3rd Party Limits ↑
ii. Physical Damage ↑ OR Deductible ↓
iii. Accident Benefits ↑
iv. Excess coverages done as separate policy (use SEF’s to modify)
v. QC government handles personal injury coverage. Private insurers sell the rest.
2. Private Insurers: for Alberta, Ontario & Atlantic provinces
a. Coverage provided by SPF No. 1 Standard Auto Policy (Owner’s Form)
i. Ontario uses OPF No. 1 Ontario Automobile Policy (Owner’s Policy)
b. Optional Coverages provided by Standard Endorsement Forms (SEF’s)
i. Ontario uses OPCF
c. Facility Associations: insures those that are denied coverage for being “substandard” risks.
i. Ensures coverage is available to all (nobody is denied coverage)
ii. All private insurers are part of this & share in the results
iii. A drivers is moved out of the FA once they qualify for coverage in normal markets
No Fault Insurance: covers the injured person regardless of fault (no need for tort or subrogating the responsible party).
- 2 Types: pure & threshold
o Pure no fault: removes right of legal action. Everyone claims their own insurance company
 MB & QC use pure no fault
o Threshold no fault: no legal action until past a certain threshold for $$ or severity of injury
 Ex: can sue for pain & suffering if past a certain $$ value
 Ex: can sue if a person dies or sustains serious disfigurement/impairment
- In SK: can choose Modified No Fault or Tort:
o Modified No Fault: claim from government insurer but can sue if amounts paid weren’t enough
 Ex: the maximum income benefit in SK = $61,139/yr + inflation)
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Application Form: to get info for underwriting, rate setting & issuing of policy. Must be completed fully.
- Owner’s Form SAF 1 (SAF = standard application form)
- 1 policy can insure multiple cars
- If compulsory government insurer: the insurance policy = registration & proof of insurance
- If private insurer: will issue separate documents
Information Required: must send original copy signed by named insured (especially when application was taken over the
phone or from someone other than the Named Insured); application is part of the contract
1. Name & Address
a. Needed for pulling drivers abstract (make sure you have the right person)
b. Territory of use is related to loss potential (must clarify if car isn’t being used primarily near address)
i. Ex: 3rd party liability risk in cities is higher than in rural areas
c. Must include contact # & lessor’s name & address if leased
2. Description of Automobile: make, model, year, manufacturer, VIN, etc. (i.e. number of cylinders & body type)
a. Needed for rating physical damage coverage (car price↑ = premiums↑ for physical damage)
i. Expensive or custom cars are expensive to repair
1. Custom cars are typically driven by young males = EXPENSIVE Insurance (especially if
modifications weren’t done by professionals)
b. To help with claim payment, must also provide:
i. Name & Address of Lessor/Lienholder (if applicable)
ii. Purchased new or used? Include date & value of car + equipment.
3. List of all drivers (in household or business): people not named on policy but can also drive.
a. Need:
i. Name (as shown on license) & # of years licensed
ii. % of use
b. A regular user that isn’t listed will be denied coverage.
c. Certificate of driver training required (i.e. licensing documents)
4. Declaration of Ownership: if applicant ≠ registered & actual owner
a. Need info on both people because an owner w/ poor history might insure the car under someone else’s
name to save money.
5. Policy Period: starts @ application time & ends @ 12:01am local time at the address of the insured.
a. Period usually < 12 months (3m – 2 yrs is available)
6. Insuring Agreements: coverages, limits, premiums, minimum retained premiums, endorsements.
a. Minimum Retained Premiums: the minimum amount the insurer keeps upon cancellation of the policy.
b. 3 Coverage Sections:
i. Section A – 3rd Party Liability
ii. Section B – Accident Benefits
iii. Section C – Loss of or Damage to Insured Automobile (own damage)
7. Physical or Mental Impairment: note anything that might affect safe driving
a. Ex:
i. Frequent fainting/dizziness or Epilepsy or Nervous Disorders
ii. Heart problems/Diabetes
iii. Depression
iv. Vision or hearing problems
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b. Insurer can reject coverage or add restrictions as a result
i. I.e. can exclude losses caused by a driver w/ glaucoma
8. Driver History: screen out undesirable drivers (via convictions & claims)
a. Conviction History (last 3 yrs): description & date
i. Ex: DUI, speeding, etc.
b. Accident & Claims History (last 6 yrs):
i. Ex:
1. At Fault Accidents caused by applicant/other users
2. Not At Fault Accidents
3. Claims for other damage: fire, hail, theft, etc.
c. Show: vehicle, driver, date, type of claim, amount of payment & other descriptions
d. Drivers can get insurance discounts if they have been accident-free. Know the discount rating program
for your province.
9. License History (past 6 yrs): suspensions, cancellations, lapses, etc.
a. Provide everything you know (if you don’t “know” it’s OK)
10. Insurance History (past 3 yrs): insurer & expiry date of old policies
a. Give details if cancelled, declined or refused renewal: they might contact them for details
b. Like in #8: only need to provide what you “know”
11. Use of Automobile:
a. Primary usage: pleasure or business?
i. Work use = more risky = more money
b. Is it used for commutes? What’s the 1-way distance?
i. Commute = driving to work, school, or park-n-ride
ii. Long commute = more risky = more expensive
c. Annual driving distance
12. Business Use:
a. Notify if biz use falls into:
i. Rented or leased to others
ii. Used for carrying passengers/goods for $$ (i.e. taxis, busses, moving van, livestock truck)
iii. Used for carrying explosives or radioactive material
b. Owners Forms excludes the above uses. Need to endorse or pay more
13. False Statement: need to warn your clients
a. Generally, right to recover = forfeit if:
i. False description of the automobile to the prejudice of the insurer
1. Ex: if you told them you had a cheaper model than you actually do (C300 vs C63 AMG)
ii. Intentionally misrepresent a risk or fail to disclose a material fact
1. Ex: previous accidents, use of vehicle, prior refusals
iii. Breach policy terms (i.e. using the vehicle to carry explosives without permission)
iv. Fraud: Ex: tries to claim a loss they deliberately caused
v. Wilfully makes a false statement during a claim:
1. Willfully = they intended to deceive the insurer
2. Ex: alcohol use, amount of loss, driver identity, etc.
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3. Insureds warrant that all of their statements are true & automatically gives permission
to insurer to check (i.e. w/ DMV, previous insurers, etc.)
b. Application forms usually have additional questions on the back:
i. Additional Information: drivers, fuel type, car mods, # of cars in the household, car pool use?
ii. Commercially Rated Vehicles: must provide additional information in a Commercial Vehicle
Supplement (CVS) like:
1. Use
2. Type
3. Distance (radius of operation)
4. Type of attached equipment (& who owns it)
iii. Broker’s Report:
1. Does the broker know the applicant?
2. New business?
3. Bound?
4. Premium Paid Upfront? How much?
5. Loyalty (other Insurance w/ same insurer)
6. Special Circumstances?
Underwriting: poor driving/insurance history = send them to the FA for coverage
Automobile Insurance Policies

SPF No. 1: Standard Automobile Policy (Owner’s Form): forms the basis for auto insurance in all provinces
- SEE APPENDEX FOR MORE DETAILS ON PROVINCE-SPECIFIC COVERAGES
- 4 Sections: A-D (3 sections for most provinces)
o Section A – Third Party Liability
 All provinces require minimum $200,000 (QC = $50k)
 No Deductible
 In private insurance provinces: issues a “pink card” for proof of financial responsibility (aka. has
liability insurance)
 In compulsory government insurer provinces: vehicle registration serves as proof
 Get fined if you can’t produce proof (Financial Responsibility Law)
 Insuring Agreement: covers when insured is legally liable
 Person’s insured: the named insured and anyone else driving/operating part of the
vehicle with their consent (including passengers who open the door into traffic and clips
a cyclist)
 Priority of Payment Rule: 80-90% of the limit goes to bodily injury if the limit is insufficient.
 Ex: If your limit is $200k and the loss was valued at $500k, $160k-180k of that limit goes
to bodily injury leaving only $40k-20k for property damage
o SEE APPENDEX FOR PROVINCIAL MINIMUM REQUIREMENTS
 * Rmbr: QC’s government takes care of all personal injury claims
 Will need high liability limits if: you’re transporting passengers or other people’s goods for $$
 Exclusions: applicable in all provinces
 WCP liability (i.e. car accident while on duty)
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 Injury to insured’s employees out of operation or repair of the insured automobile
 Damage to “cargo” (aka. other’s property carried in/on the car) (incl. contamination)
o Need special cargo insurance
 Amounts in excess of limits
 Liability coverage for insured’s DUI are covered (except in SK)
 Rationale: can’t let the innocent victims suffer (may subrogate the insured later)
 For CAIB 1 Students:
 Additional Agreements:
o Insurer pays supplementary costs (see liability)
o Insurer will not use a defense not available in the accident jurisdiction
o Ensure minimum limits are provided
o Insurer becomes the insured’s irrevocable attorney
o The insured will reimburse the insurer for any money paid due to statute, that
the insurer would not have paid otherwise
o Section B – Accident Benefits: mandatory in all provinces (except NL)
 Persons entitled to collect benefits include:
 Insured + spouse + dependents living together
 Occupants of the vehicle
 Pedestrians (limited benefits)
 Benefits provided on a no-fault basis = pays even if insured isn’t legally responsible
 Amounts are paid by own insurer & vary & are not intended to indemnify anyone
 In most provinces: can sue for the excess
 No fault provinces: limits or eliminates this right (but you get more coverage)
 Insuring Agreements: sections 1-3 paid if the insured(s) is injured in an auto accident
 Medical payments & Funeral expenses: surgery, dental, ambulance, rehab, crutches, etc.
o Some provinces have 2-4 year time limits, others are infinite
o Pays amounts in excess of any health plans (i.e. your provincial health plan)
o Funeral Expenses: amount varies (usually $1000)
 Death benefits & Loss of income payments:
o Loss of income: if unable to work
 Unemployed spouse get limited $$
 Benefits paid weekly w/ a 7-day waiting period
 Must prove that they were employed @ time of accident OR if ≥ 18,
prove they were employed for 6/12 preceding months
 104 week limit
o Death benefits: to surviving spouse or dependents
 Uninsured Motorist Coverage: section NOT applicable to Atlantic provinces
o Insured’s policy will pay excess if uninsured or unidentified motorist causes loss
 Limited to compulsory limit ($200k) except in QC
o Definitions:
 Uninsured automobile: neither driver nor owner have valid insurance
 Unidentified automobile: must cause loss by actual contact
o Unidentified = can’t ID owner or driver
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 Reported to authorities w/ in 24 hrs
 File a sworn statement w/ in 30 days
 Allow insurer to inspect damaged car
 Exclusions
 (Attempted) Suicide or if covered by WCP
 Radioactive materials
 Race/speed test
 Illegal use
 Sickness/disease
 No medical or loss of income payments to:
o DUI Driver
 Charged with breathalyser offense
 Refused roadside/breathalyser testing
o Driving while unauthorized or unqualified
 Forgot to renew license = still “authorized” (may get a fine though)
 Unlicensed but can pass all tests = “qualified”
o Section C – Loss of or damage to insured automobile: aka. own damage coverage
 Only SK & MB require own damage coverage via government plans
 Can still go to a private insurer for a lower deductible
 Lender will also require own damage coverage (to protect their asset)
 Insuring Agreement: covers accidental loss or damage to automobile & equipment
 No-fault basis
 Coverage Options/”Subsections”: all perils, collision or upset, comprehensive
 Collision & Upset: collision w/ object or roll-over (i.e. with wall or other cars)
 Comprehensive = everything except collision & upset (i.e. fire)
o Exclusions:
 Collision with attached objects (i.e. camper or with the towing vehicle)
 Collision with the ground or any object in/on the ground (i.e. potholes,
buildings, trees, etc.) ← that’s a collision coverage
o Comprehensive coverage is restrictive: people usually buy it with collision
o For CAIB 1 Students:
 Impact by animals = insured (lower deductible & doesn’t count against
client’s record because you’re not considered at fault)
 Specific Perils: covers just the ones named:
o Fire
o Windstorm/hail
o Falling object (or forced landing of aircraft)
o Lightning
o Explosion
o Earthquake
o Riot
o (Attempted) Theft
o “Flood” (rising water)
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o Accident involving any conveyance transporting the vehicle on land/water (i.e.
the ferry sinks or the train derails)
 All Perils = broadest. Get this and you won’t need the others
o Theft is covered by all the options but All Perils has…
 Stolen by housemate
 Employee theft [while operating, maintaining or repairing car (even
after-hours)]
 Deductibles: different options can have different deductibles
 Ex: Collision or Upset: $300 ; Comprehensive: $500
 No deductible for loss by: fire, lighting, theft of entire vehicle, collision with wildlife (in
some provinces)
 In BC & Other Provinces: insurer pays the amount of loss minus deductible
 In SK & MB: when physical dmg coverage is with a private insurer. Ex:
o Government Plan - $500 deductible
o Private Insurer - $300 deductible
o Claim Amount: $15,200
o
o Government Plan pays: $15,200 - $500 = $14,700
o Private Insurer pays: $500 - $300 = $200
o Total Claim Payment: $14,900
o
o In effect, you end up only paying a $300 deductible ($15,200 - $14,700)
 Exclusions:
 This policy excludes:
o Loss or damage to or by: (general idea: “natural” damage is excluded)
 Tires
 Corrosion / Wear & tear
 Mechanical breakdown
 Freezing or explosion in combustion chamber
 Note: This stuff is covered if damage is coincidental to other insured
losses or caused by fire, theft or vandalism
 Ex: tires slashed by vandals = covered if purchased All Perils or
Comprehensive coverage
o Where insured drives or operates the vehicle: while “DUI” OR
 If convicted of alcohol/drug related offense later on
 Ex: impaired driving, refusing roadside/breathalyser tests
o If insured knowingly permits an MVA violator to use automobile (i.e. you knew
the guy was drunk)
o Trailer contents / Tapes & related equipment: can insure it under habitational (if
it’s an RV) or business property policies (i.e. Contractor’s Equipment Floater)
o For CAIB 1 students: radioactive damage, conversion/fraud, trailer/rug/robes
 Additional Agreements: insurer also covers…
 Insurer also provides coverage for:
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o General Average: survivors’ insurers will pay for the loss of the sacrificed
o Salvage: pays all costs of preventing further loss (i.e. towing/storage)
o Customs duties of Canada/USA: payment of tax if damaged car is repaired in the
US
o Fire department charges: if called from another city
 Won’t subrogate against authorized users (allowed to have care, custody & control)
o But will subrogate:
 “Garagers” (i.e. car repair shop). They need to buy SPF No. 4 Standard
Garage Automobile Policy for damage to non-owned automobiles
 Convicted of “DUI” or related offense (i.e. refusing a roadside test)
 Those who breach policy conditions
 For CAIB 1 Students: Additional Agreements = Substitute Vehicles & Loss of Use
 Covers damage to a temporary substitute vehicle if insured is liable under law or
contract
o Gives same coverage as your purchased under Section C: own damage coverage
o Temporary substitute vehicle = substitute for insured’s vehicle (i.e. if broke
down or sold) & can’t belong to member of household
 Loss of use by theft: of entire automobile (if you have theft coverage)
o Coverage for $25/day for 30 days
o Pays cost of alternate transportation (rental vehicle, taxi, bus fare)
o 72 hr wait period after reported to police or insurer
o Coverage ends when repaired/replaced or insurer pays out
o Section D – Uninsured & Unidentified Automobile Coverage
 Part of Section B in most provinces except Ontario & Atlantic provinces
 Persons Insured: anyone with insurable interest
 Owner of the vehicle can claim damage to vehicle
 Owner(s) of contents can claim for loss or damage to contents of insured automobile
 Occupants or pedestrians can claim for bodily injury
o Insureds include spouse & housemates
 If insured is a business: directors, officers, employees, & household.
counts as insureds too
 Insured & household dependents can claim for bodily injury or death while in any
vehicle (even if car is uninsured)
 Covers only if UMP driver is legally liable
 Definitions:
 Uninsured Automobile: owner & driver don’t have liability insurance in force
 Unidentified Automobile: can’t ID owner or driver
o Can only claim if:
 Report to authorities in 24 hours
 File statement in 30 days (or as soon as practicable)
 Insurer can inspect vehicle (if possible)
 Coverage:
 Bodily Injury or Death: caused by uninsured or unidentified automobile
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 Damage to Insured Automobile & Contents: when caused by uninsured auto where the
owner/driver has been ID’d
o $250 deductible
o Loss of use is covered
 Limitations: #1-4
 Only pays up to provincial mandatory limit ($200k in most provinces)
 If damage occurred in another province, insurer is liable for min(home, that province)
 No payment if you can claim from unsatisfied judgement fund (= offers compensation
for losses caused by uninsured drivers) (aka. judgement recovery/highway victims fund)
o Atlantic provinces don’t offer them anymore
 When other insurance exists, UMP only pays in excess
 Determine Liability & Damages by:
 Written agreement: between claimants & insurer
 By arbitration: when requested by claimant
 Court: if worse comes to worse
 Notice & Proof of Claim: steps required for bodily injury & death claims
 Written notice to insurer within 30 days (or as soon as practicable)
 Proof of loss in 90 days
 Medical report: cause/nature of accident, probable duration of disability
 Provide details of other contributing insurance

 Insurer can investigate (i.e. arrange for additional medical exam or autopsy)
 When not eligible for Coverage D, you can apply to faculty association for coverage (limited to
$200k)
 Not eligible if: (basically: if un/under insured themselves)
o Not insured by an auto policy
o Has other insurance that is inadequate
 No payment for damage to car if claimant was “controlling” the car
 Property dmg claims have a deductible
- General Provisions, Definitions & Exclusions: applies to whole policy

o Occupant = driver or passenger (someone getting in or out counts too)
o Consent: anyone who uses the car w/o the insured’s consent = no coverage
o Territory: CA & US only + vessels traveling between the 2
o “Garagers” = Excluded: car dealer, repairman, storage, valet, etc.
 They must buy SPF No. 4
o Definition of Automobile
 In Section A, B, C & D (Atlantic Provinces):
 The described automobile: specified on the policy
 A newly acquired automobile if it:
o Replaces described automobile OR
o An extra car if all cars are insured with the same insurer
o
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o Automatically covers new purchases for 14 days but then must buy own policy
 In Section A, B & D (Atlantic Provinces): automobile also means…
 Any other private passenger vehicle if:
o Car not owned/regularly used by insured or housemate
o Insured is an individual or spousal couple living together
o Not business use
o Not owned or leased by employer of insured/household member (“housemate”)
o If insured owns a commercial vehicle or has drivers other than spouse, need
special endorsement
o
o Car renters will get same 3rd party + accident benefits coverage as their own
policies
 Need SEF 27 for physical dmg coverage
 NL = 3rd Party Liability coverage only
 Temporary substitute vehicles = covered because the insured can’t drive 2 cars at once
o Covered for Sections A & B
 Trailers connected to car = 1 car (together considered 1 vehicle)
 If the insured is a business entity: you have 3rd party + accident benefits for non-owned
cars but… very restrictive
o Get SPF 1 Owner’s Form
o 2+ Automobiles:
 Need separate policies under separate limits
 Trailer(s) + cars are treated as 1 vehicle under 3 rd party liability & accident benefits
 If at-fault vehicle isn’t owned by insured & insured doesn’t insure all cars with the same insurer:
limits adjusted proportionally with other policies
o War Risks Excluded: it would bankrupt the insurer
o Excluded Uses: (basically: ‘heavy’ business uses)
 Renting to others
 Carrying explosives or radioactive materials
 Carrying passengers for compensation (i.e. cab or tour bus)
 However, the following are OK:
o Car pools are OK if you aren’t making a profit (breaking even)
o Sharing cost of trip (i.e. sharing gas money, etc.)
o Carrying domestic servants, clients/customers (i.e. as a realtor)
o Infrequent use for carrying children on school trips
 Occasionally transporting children to school events (even if compensated at cost)
 Again: not for profit
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Provincial Compulsory Coverages for Private Passenger Vehicles (Appendix)
British Columbia (BC):
3rd Party Liability = compulsory: $200k with a $20k cap on property
- Can sue for pain & suffering
- Can sue for excess loss on top of no-fault benefits
Accident Benefits = compulsory:

- Medical Payments: $150,000/person for stuff on top of health insurance plans.
- Funeral Expenses: $2500
- Disability Income Benefits:
o 75% gross wages, max = $300/wk
o 104 weeks for temporary disability, lifetime if total disability w/ 7-day wait
o Homemaker gets $145/wk for up to 104 weeks
- Death benefits: for death @ any time
o Head of household: $5k + $145/wk for 104 weeks to first survivor (i.e. spouse)
 $1000 + $35/wk to each child for 104 weeks
o Spouse = $2500
o Dependent child = $1500 according to age
Administrated by government; private insurance for optional coverages
Alberta (AB):
If accident in QC, get same coverage as QC residents from own insurer (same as in SK & MB).

o Maximum award for minor injury = $4504

o 2 yr limit
o Chiropractor limited to $750
o Massage Therapy limited to $250
o Acupuncture limited to $250
o 80% gross wages, maximum $400/wk
o 104 weeks max if total disability w/ 7-day wait
o Non-earner benefit = $135/wk for 26 weeks
 Non-earner = unemployed person > 18 y/o
- Death benefits: for death at any time
o Head of household: $10k + 20% for each dependant beyond the first
 Surviving spouse or dependant gets $15k for first survivor + $4k for reach remaining
o Spouse = $10k
o Dependent relative = $3k
Administrated by private insurance
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Saskatchewan (SK):
o Can choose tort or no-fault coverage
- Tort:
o Can sue for pain & suffering w/ $5000 deductible
o Can sue for economic losses exceeding no-fault benefits
- No fault:
o Can’t sue unless at-fault driver was impaired
o Can sue for economic losses exceeding no-fault benefits
Accident Benefits = compulsory: amounts adjusted annually

o Visitors fall under no-fault, residents can choose.
o Accident benefits is optional for Tort choosers
- Medical Payments:
o Tort: $177,067 for catastrophic; $23,603 for non-catastrophic
o No fault: $6,037,979
- Funeral Expenses:
o Tort: $5903
o No fault: $9057
- Income Benefit: has a 7-day wait period
o Tort: ≤ $18,512/yr (2 yr limit; totally disabled = lifetime)
o No fault: ≤ $76,533/yr ≤ 65 y/o if necessary
- Death Benefit:
o Tort: 45% of deceased’s net income (max salary = $76,533/yr)
o No fault: same as tort + $41,527 Education Allowance for the spouse to train for a job
- Permanent/Catastrophic Impairment:
o Tort: $153,458 for catastrophic; $11,803 for non-catastrophic
o No fault: $211,330 for catastrophic; $173,026 for non-catastrophic
Physical Damage = compulsory: collision and comprehensive (all perils) is mandatory.

- Deductible varies by vehicle type
o $700 deductible for passenger vehicles
Administrated by gov for basic coverages; private insurance for optional
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Manitoba (MB):
If accident in QC, get same benefit as QC residents through own insurer in Manitoba
3rd Party Liability = compulsory: $200k with a 10% cap on property

- Can’t sue for pain & suffering
- Can’t sue for excess loss on top of no-fault benefits
Accident Benefits = compulsory: amounts adjusted annually

- Medical Payments: no time or amount limit (includes rehab)
- Disability Income Benefits: 90% of net wages
o Max gross income = $76k/yr
o 7-day wait period
- Death benefits: payable for death @ any time
o Payment depends on age & wage
o Spouse = minimum $54,466 up to $380,000
o Disabled Dependent = $23,828
o Non-dependant child or parent = $12,128
- Impairment Benefits: between $680 to $136,160
Physical Damage (Compulsory): all perils insurance (collision & comprehensive) is compulsory.
- Deductible depends on type of vehicle
Administrated by government; private insurance for additional coverage.
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Ontario (ON):
If accident in QC, get the same benefits as QC residents through own insurer.
Can buy coverage for additional accident benefits coverage

- Can sue for pain & suffering if meets verbal threshold (if beyond some degree of seriousness)
o For “serious” injury w/ $30k deductible ($15k if Family Law Act claim)
o Can buy “Consumer Choice Option” to reduce deductible to $20k (& $10k respectively)
o Get 80% of net wages before trial and 100% of gross after trial
o + Medical costs (i.e. rehab) if meets the verbal threshold for pain and suffering

- Medical Payments: $50,000/person for stuff on top of health insurance plans (including rehab).
o $1MM if “catastrophic injury”
o $36k for attendant care ($1MM if catastrophic)
o Consumer Choice Option: can double the per-person and attendant car limits to ($100k & $72k)
- Funeral Expenses: $6000 (Consumer Choice = $8k)
o 70% of gross income up to $400/week (minimum $185/week)
 104 week limit (more if can’t find suitable job)
o Homemakers get $185/week for 104 weeks
 If unable to carry on normal life
 26 week wait period
o Students still disabled after 104 weeks get $320/week
o WAD = Whiplash Associated Disorder
 WAD 1 = 12 week limit
 WAD 2 = 16 week limit
o Consumer Choice = 70% of gross income ≤ $1000/week
- Death benefits: if die within 180 days of accident or 3 years if continuously disabled
o Spouse = $25k
o Dependent = $10k
o Consumer Choice = 2x
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Quebec (QC):
Can’t sue for injuries, compensated by government.
If you are a non-QC resident & not liable, compensated by QC government & own insurer.
3rd Party Liability = compulsory: $50k for property damage & injury outside of QC
Bodily Injury paid by QC Government:

- Medical Payments: no time or amount limit (includes rehab)
- Funeral Expenses: $4,617
- Disability Income Benefits: income replacement indemnity
o 90% of wages < $62,500 until 65
- Death benefits: can die anytime
o Payment depends on wage & age but minimum $61,599
o Maximum $312,500 to spouse + $29,258-$53,901 to dependants according to age
o $25,409 if disabled dependant
o $49,371 to parents or estate if nobody survives
- Impairment benefits: scheduled up to $215,999
Administration:
- Bodily Injury from government insurer
- Property Damage from private insurers
15
Newfoundland (NL):
- Can sue for pain & suffering w/ $2500 deductible
Accident Benefits = optional:

o 4 yr limit
o 104 weeks for partial disability ; lifetime if totally disabled
o Maximum $140/wk with a 7-day wait
o Unpaid housekeepers get $70/wk ; max = 12 wks
o Head of household: $10k + $1k for each dependant beyond the first
o Spouse = $10k
o Dependent child = $2k
New Brunswick (NB):

3rd Party Liability = compulsory: $200k limit w/ 10% for property damage
- Can sue for pain & suffering. Maximum $2500 for minor injuries (indexed annually)
- Can sue for additional loss on top of no-fault benefits
Accident Benefits = compulsory: optional increased limits can be purchased through SEF 48)
- Medical payments: $50k/person for stuff on top of health insurance plans (including rehab)
o 4 yr limit
o Death benefits: if die within 180 days of accident or 2 years if continuously disabled
 Head of household: $50k + $1k for each dependant beyond the first
 Spouse = $25k
 Dependent child = $5k
16
Nova Scotia (NS):
3rd Party Liability = compulsory: $500k limit
- Can sue for pain & suffering. Maximum $7500 for minor injuries (indexed annually)
- Can sue for additional loss on top of no-fault benefits
Accident Benefits = compulsory: optional increased limits can be purchased through SEF 48)
- Medical payments: $25k/person for stuff on top of health insurance plans (including rehab)
o 4 yr limit
o Spouse = $10k
Prince Edward Island (PE):

- Can sue for pain & suffering. $2500 for minor injury
Accident Benefits = compulsory

o 4 yr limit
o Spouse = $10k
17
Yukon (YK):

o 2 yr limit
o 104 weeks for partial disability ; lifetime if totally disabled w/ 7-day wait
o 80% gross wages < $300/wk
- Death benefits: for death at any time
o Head of household: $10k + $2k for each dependant beyond the first + 1% of principle sum for 104 wks
(no limit)
o Spouse = $10k
o Dependent relative = $3k depending on age
Northwest Territories & Nunavut (NT):


o 4 yr limit
o 80% of gross wages < $140/wk
o 104 weeks if temporary disability, lifetime if total disability w/ a 7-day wait
o Unpaid housekeeper: $100/wk for 12 weeks
o Head of household: $10k
o Spouse = $10k
o $2000 for each dependant survivor after the first
o If 1 survivor, spouse or dependant: add $1500
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Auto Insurance – Statutory Conditions & Endorsements
Statutory Conditions: legal duties of all parties (no coverage if you breach)
- Statutory Conditions #2-7 do not apply to Section B – Accident Benefits
1. Material Change:
a. Notify insurer if you discover any material change (ASAP & in writing)
i. Ex: change in insurable interest (new owner) OR the purchase of other insurance
2. Prohibited Uses:
a. Insured(s) shall not “use” the automobile: (use = use or operation, driving, etc.)
i. Unless authorized or qualified to drive
1. Rmbr: if not licensed, take the test immediately to see if you are “qualified”
ii. While prohibited by court (i.e. license suspended)
iii. While under 16 y/o (or whatever age you can get a license in home province)
iv. Used for illegal activity (i.e. drug dealing)
v. Race or speed test
vi. No coverage if you knowingly let a prohibited driver drive.
3. Requirements upon bodily injury or property damage: insured must…
a. Promptly notify insurer of any bodily injury or property damage: prompt notice is based on what’s
reasonable (report serious claims sooner than petty ones)
b. Verify by oath (statutory declaration) that: claim arose from “use” of auto by an insured(s)
c. Immediately forward legal papers to insurer: they have the right and duty to defend you against legal
action so they need time to review
d. Assist in defense: via gathering information/witnesses, attendance, witness, cooperate, etc.
e. Insureds shall not:
i. Voluntarily assume liability/settle the claim (except at their own cost)
ii. Interfere with any proceedings (negotiations, trials, etc.)
4. Requirements upon loss of damage to own automobile: insured must…
a. Take reasonable steps to protect the auto from further loss: additional losses from failing to protect are
not covered.
b. Prompt written report: of all details
c. Make statutory declaration (aka. proof of loss) detailing loss within 90 days
d. Insured may be examined under oath & submit all related documents
e. Insured cannot make repairs other than those immediately necessary to protect the auto
i. No removal of evidence either without the approval of insurer
ii. Insurer has a reasonable time frame for inspecting auto
f. Insurer pays ACV: depreciation applies
i. Depreciation Factors:
1. Exterior elements: paint, trim & condition
2. Mechanical condition / Mileage
3. Interior (upholstery & trim)
4. Equipment & Tires
g. Appraisal: to settle disagreements on amounts paid
h. Repair or Replace: insurer must notify insured within 7 days of receiving proof of loss
i. No Abandonment or Salvage:
i. Insured is still responsible for the wreck after loss (even if total loss is apparent)
ii. Insurer has the right to the wreckage after they pay in full (i.e. to sell for scraps)
5. Time of Payment:
a. Payment within 60 days of Proof of Loss or 15 days after appraisal.
b. Insured has 2 years to initiate legal proceedings (1yr in Alberta) against insurer for disputes around
damage or bodily injury claims
19
6. Notice or Proof of Claim: same as Insurance Act
a. By agent of the insured can give notice or proof of claim, if justified (i.e. insured is in a coma)
b. By a beneficiary of the insurance money, if the insured refuses
7. Termination: same as Insurance Act
8. Inspection of Automobile: @ any reasonable time
a. To verify vehicle details (this is the one we insured)
9. Written notice to insurer sent to provincial head office/chief agency (via registered mail or hand delivered)
a. Written notice to insured sent to last known address
Common Endorsements: used to add coverage to SPF No. 1 (Owner’s Form)

1. SEF No. 20 – Loss of Use Endorsement: used if purchased Section C Loss of or Damage to Insured Automobile
(aka. Own Damage coverage)
a. Covers reasonable expenses for: alternate transportation
i. Rental of substitute automobile
ii. Taxi or public transit
b. Coverage starts right away if car can’t operate under its own power
i. If Can Operate: when delivered for repair
ii. If Stolen: the day after theft is reported to police
c. Has maximum daily & per occurrence limit
i. Ex: Personal Auto = $50/day; $1500/occurrence
ii. Ex: Business Auto = $200/day; $6000/occurrence
2. SEF No. 27 – Legal Liability for Damage to Non-Owned Automobiles Endorsement: only if Owner’s Form is in a
personal name (not business name).
d. Coverage only when legally liable (Ex: no coverage for hail damage)
e. Use this if you regularly rent cars (short term rentals only - otherwise buy Owner’s Form)
f. Loss to vehicle owned by you or anyone in your dwelling isn’t covered
g. Provisions:
i. Covers the same stuff as Section C (Own Damage)
ii. Covers the same types of cars
iii. Only 1 car at a time (in the insured’s care)
iv. Automobile used with owner’s consent
v. Has per occurrence limit (usually $15k)
h. For CAIB 1 Students: Limitations/Conditions of coverage:
i. Coverage limited to insured & spouse only
ii. Subject to a per-occurrence limit
iii. Covered only while operated with the “owner’s” consent
iv. Covers the same perils as the SPF 1 this endorsement is attached to
3. SEF No. 32 – Recreational Vehicle Endorsement: if you have a recreational vehicle insured under Owner’s Form
i. Covers while unlicensed or if used by unlicensed person off public roads
j. I.E. ATV, snowmobile, trail bike
4. SEF No. 43R – Limited Waiver of Depreciation Endorsement
k. No depreciation for 2 yrs on new cars
l. Coverage for min[actual purchase price, MSRP (including options)]
m. Replacement Cost option: get a new car or cash = original purchase price + inflation
5. SEF No. 44 – Family Protection Endorsement: for extra protection in case of death or injury from an uninsured or
under-insured driver
n. Covers: Named insured & spouse if living in the same dwelling + dependent relatives
o. Limit = your own 3rd party liability limit – liability limit of the at fault driver
i. Basically: it covers the shortfall of the other driver up to your own liability limit
1. Rmbr: “you get as good as you give”
20
6. For CAIB 1 Students:
a. SEF 2 covers insureds who drive a non-owned vehicle (i.e. if that vehicle is uninsured)
b. SEF 19a – Valued Automobile Endorsement: used for antique/classic cars
i. Value indicated on policy (appraisal required)
7. For CAIB 1 Students:
a. SPF 2 – Standard Driver’s Automobile Policy: covers people who don’t own a car but drive cars they
don’t own/aren’t registered in their name. (Ex: government employees)
i. Needed because the owner might not have insurance or adequate limits
b. SPF 4 – Standard Garage Auto Policy: used for business that work with automobiles
i. Section A – 3rd Party Liability
ii. Section B – Accident Benefits
iii. Section C – Loss or Damage to Owned Automobiles
iv. Section D – Uninsured Motorist Coverage
v. Section E – Legal Liability for Damage to Customer’s Automobiles: covers if you’re found legally
liable for your customer’s cars
1. 2 kinds of coverage:
a. Collision or upset
b. Specified perils excluding open lot pilferage: no deductible
2. Exclusions: open lot pilferage & contents of automobiles (incl. trailers)
c. SPF 6 – Standard Non-owned Automobile Policy: insures businesses against liability arising out of:
1. Automobiles owned by employees
2. Hired automobiles
3. Automobiles operated under contract for the insured
ii. Needed because (rmbr: employers are liable for the actions of their employees)
1. Can be purchased on its own or added to CGL
d. SPF 7 – Standard Excess Automobile Policy: gives excess 3 rd party liability limits on top of SPF 1
e. SPF 8 – Standard Lessor’s Contingent Auto Policy: bought by business that lease cars to others on a long-
term basis
i. Covers when the lessee fails to maintain the coverage required by the lease agreement
21

Auto Insurance Notes

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Auto Insurance Notes

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Auto Insurance Basics

Insuring Owned Automobiles

Auto Insurance is different in all provinces

2 Types of Insurers: private & government (compulsory)

Underwriting: poor driving/insurance history = send them to the FA for coverage

Automobile Insurance Policies

- General Provisions, Definitions & Exclusions: applies to whole policy

Accident Benefits = compulsory:

Administrated by government; private insurance for optional coverages

3rd Party Liability = compulsory: $200k with a $10k cap on property

Accident Benefits = compulsory:

Administrated by private insurance

Accident Benefits = compulsory: amounts adjusted annually

Physical Damage = compulsory: collision and comprehensive (all perils) is mandatory.

Administrated by gov for basic coverages; private insurance for optional

3rd Party Liability = compulsory: $200k with a 10% cap on property

Accident Benefits = compulsory: amounts adjusted annually

Administrated by government; private insurance for additional coverage.

3rd Party Liability = compulsory: $200k with a 5% cap on property

Accident Benefits = compulsory:

Administrated by private insurance

Bodily Injury paid by QC Government:

Accident Benefits = optional:

Administrated by private insurance

New Brunswick (NB):

Administrated by private insurance

Administrated by private insurance

Prince Edward Island (PE):

Accident Benefits = compulsory

Administrated by private insurance

Accident Benefits = compulsory:

Administrated by private insurance

Northwest Territories & Nunavut (NT):

Accident Benefits = compulsory:

Administrated by private insurance

Common Endorsements: used to add coverage to SPF No. 1 (Owner’s Form)

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