Fun Test 3 Stuff > Chapter 3 Study Guide and Checkpoints > Flashcards

Chapter 3 Study Guide and Checkpoints Flashcards

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1
Q

2 SYSTEMS used to INSURE AUTOMOBILES in canada ( other than quebec)

A
  1. private Insurers.

2. compulsory government insurance plans

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2
Q

Three types of standard policy forms (SPF) that are used to insure vehicles

A

SPF 1 - owners form
SPF 4 - Standard Garage Automobile Policy
SPF 6 - Standard Non-Owned Automobile Policy

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3
Q

what is a ‘standard’ policy form

A

generally coverages are provided by standardized policy forms developed by the insurance industry for all types of automobile risks.

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4
Q

three provinces where compulsory government insurance plans exist

A
  1. BC
  2. SK
  3. MB
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5
Q

Can private insurers compete with government insurers in these provinces for Excess Coverage?

A

YES

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6
Q

three types of AUTOMOBILES insured on an SPF # 1

A
  1. automobiles at the private passenger type
    PRIVATE PASSENGER
  2. commercial vehicles ( trucks and delivery automobiles)
    COMMERCIAL VEHICLES (TRUCKS N SUCH)
  3. public automobiles (Buses and Taxicabs)
    PUBLIC
    - BUSES
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7
Q

what is the minimum third party liability limits

A

$200,000 for Private Passenger

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8
Q

identify three alternate limits that may be required by federal legislation depending on the use of the vehicle

A
  1. Out of province use is $1,000,000
  2. Carriers of certain dangerous goods is $2,000,000
  3. $750,000-$5M depending upon the types of goods being hauled
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9
Q

what is the additional hazard faced by insurers of public vehicles?

A

Increased Passenger Hazard.

PASSENGER HAZARD

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10
Q

What are the 3 sections of coverage under SPF 1?

A
  1. Third Party Liability
  2. Accident Benefits
  3. Physical Damage
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11
Q

List 5 accident benefit examples.

A
  • Reimbursement of reasonable medical expenses
  • rehabilitation costs
  • funeral expenses
  • death benefit
  • loss of income
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12
Q

four options available under section C - Physical Damage

A
  1. all perils
  2. COLLISION or upset
  3. Comprehensive
  4. Specified perils
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13
Q

SEF 44 Provides coverage for INJURY or DEATH when caused by:

A

1 - an UNDERINSURED motorist

2 - an UNINSURED motorist

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14
Q

How does SEF 44 Work?

A

it increases the third party liability limits available to victims of such accidents to the same limits as purchased under their own policy. Payment limited to the difference between the liability insurance limit of the insurance policy and that carried by the motorist at fault

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15
Q

Coverage limits for Loss of Use under Section C (when you don’t got sef 20)

A

loss of use by theft is included. Limits $25-$30/day

and max 30 days

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16
Q

name two expenses covered by SEF 20

A

Loss of use! Reasonable expenses for :

  1. The Rental a substitute automobile
  2. Taxicabs or public means of transportation
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17
Q

When does Coverage start under SEF 20?

A
  1. when the damage is such that the automobile cannot be operated under its own power
  2. in the event of theft, coverage begins on day following the report of the theft to the insurer or to the police
  3. in all other instances, coverage commences at the time the automobile is delivered for repair due to the loss or damage
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18
Q

how are limits set under this endorsement SEF 20

A

Coverage limits are set at a certain amount per day, with a maximum limit PER OCCURRENCE

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19
Q

name two types of vehicles to which SEF 20 is not available generally

A
  1. TAXIS
  2. TRACTORS
  3. UDRIVE vehicles and certain trailers
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20
Q

endorsement or policy would be used for this situation: when a rental firm leases a vehicle to an individual or business for 30 days or less

A

SEF 5 C - not in exCess of 30 days. Take a faive if under 30.

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21
Q

when a vehicle is leased by an individual or business for longer than 30 days

A

SEF 5 - just the regular ole 5.

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22
Q

what policy is used to indemnify the lessor when the lessee fails to maintain the required insurance as stated in the lease?

A

SPF 8 - Standard Lessor’s Contingent Automobile Policy

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23
Q

which endorsement policy is used to indemnify the lessor if the lessee sold the vehicle and disappeared?

A

SEF 5. d. Conversion Coverage Endorsement

  1. d. D is for Dishonest acts of the lessee! removes that exclusion for conversion, theft etc of the person in lawful possession of the vehicle.
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24
Q

if you have insurance and want to rent a car for less than 30 days, which two coverages are automatically extended from your own insurance to the rented vehicle

A
  1. Third Party Liability

2. Accident Benefits

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25
" legal liability for damaged to non-owned automobiles" is known as :
SEF 27 - for PHYSICAL DAMAGE of the rental etc.
26
5 conditions of the endorsement SEF 27
1. coverage restricted to insured and spouse 2. coverage is for the same perils as are insured under the SPF #1 Owners Form. 3. No more than one automobile may be rented or leased by insurance or their spouses at any one time. 4. coverage is normally restricted to certain types of automobiles. 5. coverage provided is subject to a maximum amount in any one occurrence.
27
if a vehicle is rented on a short-term basis, in the name of a business identify the policy required to provide third-party liability? 2. The endorsement to provide legal liability for physical damage?
third-party liability coverage can be provided by the SPF NO 6 - STANDARD NON-OWNED AUTOMOBILE POLICY and 2. SEF 94 - Legal Liability for Damage to Hired Automobiles Endorsement
28
the endorsement to be used when the vehicle is used to carry explosives
SEF 4a. Permission to Carry Explosives Endorsement
29
the endorsement to be used when the vehicles used to carry radioactive material
SEF 4b. Permission to Carry Radioactive Material
30
identify five uses that are not deemed to fall into carrying passengers for compensation
1. Use by the insured for carriage of another person in return for the formers carriage. IE Carpooling 2. OCCASIONAL and INFREQUENT use of the car with person who shares cost of trip 3. Carriage of a temp or permanent domestic servant of the insured 4. Carriage of clients or customers or prospective clients or customers. 5. the occasional and infrequent use by a person of his car for transport of children to and from activities conducted as part of an educational program. FIELD TRIP!
31
Outline the purpose of SEF 30. Used when they have attached equipment
SEF 30 - Excluding Operations of Attached Machinery Endorsement - used by the insurer to exclude liability under Section A and B for operation of certain types of machinery such that is used for well drilling welding excavating or hoisting.
32
What is Deleted if you have SEF 30?
3rd party liability and accident benefits.
33
what coverages are not deleted by SEF 30?
Section C - Loss of Damage to Insured Automobile
34
four examples of non owned property that can be insured under SEF 31
This gives coverage for attached equipment. Some examples include: 1. Tanks 2. Pumps 3. Meters 4. Machinery or equipment owned by others
35
two ways to write insurance on commercial vehicles
1. Scheduled Basis | 2. Fleet Basis
36
two methods of issuing FLEET policies
1. Scheduled Automobiles | 2. Blanket Basis
37
two endorsements that may be used when vehicles are issued on a blanket basis.
1. SEF 21b - Blanket basis Fleet Endorsement | 2. SEF 21a - Monthly Reporting Basis Fleet Endorsement
38
what is Retrospective Rating (Fleet)
prior to issuing the policy, the insurer and insured agree that the final premium charge will fall within an established a minimum and maximum range. The cost can be affected by LOSS RATIO, ENCOURAGES INSURED TO DEVELOP AND MAINTAIN EFFECTIVE LOSS PREVENTION PROGRAMS
39
two ways coverage can be provided to businesses to ensure their third party liability exposure for non-owned vehicle operated on their behalf
1. Seperately or | 2. By endorsement to the CGL policy
40
Identify three groups of non-owned vehicles that may be used on behalf of a business
1. vehicles owned by an employee (used regularly in the insureds business and for which reimbursement is provided by the employer also creates this same exposure. 2. A hired Automobile 3. Operated under contract for the insured
41
Why would an employer carry an SPF 6?
when an automobile is rented in the name of the business physical damage coverage applies only when the business carries SPF # 6. SEF 27 won't cut it here.
42
three instances where examples of when employees may use their vehicles for an incidental basis on behalf of their employers
1. run bank deposit or errands 2. pick up mail 3. pick up supplies
43
Two types of vehicles that may be "HIRED" by an insureds business?
1. Buses | 2. Vans
44
What is SEF 94 called and for?
SEF 94 - Legal Liability for Damage to Hired Automobiles Endorsement. This is similar to SEF 27 for Hired non-owneds
45
Two types of businesses that may have non-owned vehicles operated under contract?
1. Long Haul Trucking Firms. | 2. Moving Firms
46
3 Persons, other than the named insured, who would be covered under an SPF 6, who drives a non-owned auto in the business of the insured:
1. Every partner 2. Officer 3. Employee Who drives a non-owned auto in the business of the employer.
47
endorsement can be attached to SPF 6 when an insurer wishes to EXCLUDE a driver with shit history?
SEF 98 - Excluding Automobiles Personally Driven by Named Persons Endorsement
48
5 Types of risk, including garages, who would be candidates for an SPF 4:
1. Automobile dealers 2. Repair Garages 3. Service Stations 4. Storage Garages 5. Parking Lots
49
identify two significant exposures common to those risks that are left unprotected by the CGL
1. Policy coverages do not extend to ensure bodily injury or property damage arising out of the ownership user operation by or on behalf of any insured of any automobile and 2. coverage for personal property in the care custody or control of the insured is excluded
50
Five Sections of Coverage Available under the SPF 4
1. Section A - 3rd Party Liability Section B - AB Section C - Loss of or Damage to Owned Automobile section D - Uninsured Motorist Coverage Section E - Legal Liability for Damage to a Customer's Automobile while in the CARE, CUSTODY, or CONTROL of the insured.
51
3 types or examples of OWNED AUTOMOBILES used in the insureds described business which would be covered under SECTION A of the SPF 4 Policy
Owned autos like: 1. Tow trucks 2. service loaners 3. automobiles being held for sale
52
two types of non-owned automobile for which coverage is provided under Section A
1. Auto belonging to CUSTOMERS and | 2. OTHERS
53
what is perhaps the greatest exposure to garages for liability arising out of a non-owned vehicle under SECTION A
TEST DRIVING the customers vehicles as part of the diagnosing and servicing etc.
54
The basis of premium rating for owned vehicles under Third Party Liability? SPF 4
Rating is based on the insureds payroll or staff units depending on the insurer.
55
identify two uses for which a surcharge is applied to the premium ( SPF 4 Section A )
1. Is there road testing? | 2. Is there picked up/ delivered services?
56
Two rate tables used when determining the premium for third-party liability for customers automobiles:
PAYROLL OR STAFF UNITS. | They also want to know TYPE of vehicles and VALUE
57
Is the SEF 44 avail for an SPF 4?
YES - the amount of coverage available is the difference between the liability limits carried under the garage policy, and that of the motorist at fault.
58
4 Coverage options under SPF 4:
These are the Section C stuff: 1. Subsection 1 - COLLISION or UPSET 2. Subsection 2 - COMPREHENSIVE 3. Subsection 3 - SPECIFIED PERILS 4. Subsection 4 - SPECIFIED PERILS EXCLUDING THEFT
59
under Subsection 1 - how any policy deductible will be applied to a collision loss under subsection C1?
Applied separately for each loss
60
How will deductibles be applied for C2 C3 or C4?
occurrence basis and no deductible for fire lightning or theft of entire automobile
61
Explain the function of SEF 70?
SEF 70 - Named Chauffer Endorsement - can be used to reduce the premium charged for collision or upset when vehicles are driven by designated employees only 70 = chauffer! - REDUCE PREMIUM SUBSECTION 1 ONLY. COLLISION
62
SEF 79 ?
SEF 79 - Fire and Theft Deductible Endorsement - this is to reduce premium by putting a deductible on FIRE and THEFT losses REDUCES PREM FOR SUBSECTION 2 AND 3 AND 4
63
identify the two basis by which owned vehicles can be insured under subsections c2, c3 or c4?
1. Monthly Average basis - they select an amount which represents the maximum value of owned automobiles expected at any one time. 2. Co-Insurance Basis - required to purchase an amount not less than 80% of the ACV of all owned autos or penalty
64
explain how the limit of insurance is calculated, and how the premium is calculated under the monthly average basis
Provisional Premium is charged. Monthly reports required. - lots of reporting, tough for some to handle
65
3 ways a insured may be penalized in the event of a loss if the dealership is not diligent in reporting inventory levels
1. if the delinquent report is the first report required to be filed the insurer is not liable for more than 75% of the applicable limit of liability. 2. the insurance liability at any one location is limited to the proportion that the values reported bear to values as actually existed on the date for which the report is made 3. Underinsured on the coinsurance basis
66
What is SEF 73?
SEF 73 - excluding Financed Automobile Endorsement - removes the physical damage coverage is provided by the policy from such automobiles. used when these automobiles are insured elsewhere under a dealer's floor plan or other financing agreement.
67
how would a garage avoid legal liability for loss to customers automobiles under Section E
1. all doors and windows closed and locked before the premises for closed for the night and 2. which doors were equipped with deadbolts and 3. that keys to all vehicles were in a locked cabinet in a location kept out of sight of the public
68
Explain SEF 71 -
This endorsement is used to delete all policy coverages on any automobile owned hired at least by licensed in the name of the insured. it is often used when such automobiles already insured under SPF # 1 owners form and related endorsements. The use of this endorsement normally results in a reduction of the premium paid under the garage policy.
69
Explain SEF 76
SEF 76 - Additional Insured Endorsement ( Broad Form) This endorsy removes coverage restriction of when auto is used for pleasure and provided for regular or frequent use to a person who is not an active partner or full-time employee of the business.
70
Study pages 3-22 to 3-26
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