Describe accident benefits.
- no fault coverage
- mandatory coverage (except for newfoundland)
- coverage that owners of autos use to protect themselves and their families
- was first developed as an optional medical expense coverage
- must be expenses arising out of bodily injury/death, not property damage
- coverage for the insured and others injured in an auto accident
- benefits are payable by own insurer
- benefits payable for:
i) medical/rehab and funeral costs
ii) loss of income/death benefits - subject to maximum payouts defined in legislation (statutory accident benedit schedule)
- provides speedy relief, so use first
Who is insured under AB?
1) named insured on policy
2) spouse (gets injured as passenger)
3) dependants of either
4) any driver named in policy (occasional driver)
5) any person involved in accident (ped, cyclist, motorist w/o insurance)
What does AB cover?
1) medical, rehabilitation, funeral expenses
- insurer agrees to reimburse each insured person for out of pocket medical or rehab expenses, up to a limit
- expenses must be reasonable and necessary
- expenses must be incurred within a stated period of time
examples of expenses:
- medical
- surgery
- dental
- ambulance
- hospital fees
- professional nursing
- rehab
- funeral
2) death benefits and loss of income payments includes: a) death benefits b) loss of income payments c) total disability benefits d) dismemberment payments
- designed so persons involved in auto accidents will receive some payment in case of death/injury and resulting loss of wages without the need to go through costly and timely litigation
- injured party retains the right to take legal action against 3rd party to collect damages that exceed limit
- if an accident results in death, there is a provision for payment of a death benefit subject to certain policy stipulations (must define insured, dependent, beneficiary in policy)
Define no fault.
- is the term used to describe a system for improving compensatory process for automobile accident victims by eliminating costly and lengthy litigation
Define tortfeasor.
- is a wrong doer, aka the party responsible for the accident
Define no fault benefit schedule.
- is a schedule stating the benefits and amounts that will be paid under the policy
- regulated by statute
Define collateral benefits.
- are any source of entitlement outside of the automobile policy
What will the amount paid be based on when dealing with loss of income?
1) the amount insured
- usually % of gross weekly earnings
2) the money value of the lost time of the insured person
- like lost wages or replacing homemaker
- if there is more than 1 insurance contract, each insurer contributes a proportionate amount of lost wages
What order should you claim under different types of coverage?
1) OHIP
2) collateral benefits
3) AB
4) TPL
Explain the family protection endorsement.
- not mandatory
- seperate section of policy
- aka underinsured or motorist protection endorsement
- provides additional benefits if other motorist has insuffucient insurance
- when third party in uninsured or underinsured
- pays difference between liability limit of other motorist and insured’s limit of liability
Explain the uninsured motorist coverage.
- mandatory coverage, automaticallt provided when TPL coverage is purchased
- protects against accidents caused by uninsured or unidentified motorists
- UM is used first in Ontario, then indemnity fund pays if UM doesn’t exist
- provides means to indemnify loss, relating to bodily injury caused by negligence
- through own insurer
- coverage is limited to minimum limits in the jurisdiction ($200,000 in ontario)
- insured must be able to demonstrate a legal claim against responsible third party, who is uninsured/unidentified
- recovery is for bodily injury losses and some property damage up to $20,000 in certain circumstances
Explain loss of or damage to insured auto.
- not mandatory
- indemnfies the insured against direct and accidental loss of/damage to auto
- four different coverages are offered
- all coverage subject to deductible (except for fire or lightning)
1) all perils
- broadest coverage
- don’t need any other coverage
includes:
i) comprehensive
ii) collision
iii) someone living with you steals car
iiii) employee steals car
2) collision/upset
- protects against loss of/damage to auto resulting from collision with another object which is in contact with road surface or by upset
3) comprehensive
- coverage for everything other than collision or exclusions
- usually sold with collision coverage
- alternative to specified perils because it gives broader coverage
- includes collision with an animal
4) specified perils
- coverage for damage to vehicle are named as perils insured against includes:
1) fire
2) lighting
3) theft
4) windstorm
5) earthquake
6) hail
7) explosion
8) riot
9) falling/forced landing of aircraft/ or its parts
10) rising water
11) stranding, sinking, burning, derailment or collision of any conveyance in or upon which auto is being transported on land/water
- does not include coverage for windshields or vandalism
Define direct compensation./
- is the system of recovering damages for which a third party motorist is responsible from ones own insurer
Define fault charts.
- are a series of charts and rules for determining fault in various types of accident situations
Define deductible.
- is the amount of a loss which the insured must pay himself
- its purpose is to reduce the number of small claims which are expensive for an insurance company to handle in relation to the amount insured
- in return for the deductible, the insured receives a reduced rate of premium
- higher the deductible, the lower the premium
What are the exclusions within auto insurance?
1) damage to tires, mechanical break down, wear and tear
2) damage caused by theft by any person who is in lwful possession of the auto under a mortgage, conditional sale, lease, or similar written agreement
3) damage caused by the voluntary parting of ownership
4) radioactive contamination
5) contents of trailer, or to rugs or robes
6) damage to tapes and equipment not attached
7) damage due to intoxication
8) theft by person living in same dwelling/employee
(except under all perils coverage)
