Chapter 9 – Liability Insurance Policies

Personal Liability Coverage:

A) Coverage E – Personal Liability – 1,000,000$ limit

B) Coverage F – Voluntary Medical Payments – 1000$
C) Coverage G – Voluntary Payment for Damage to Property – 500$
D) Coverage H – Voluntary Compensation for Residence Employees – Per Schedule
E) Note* No deductibles on these coverages and limits vary by insurer

Definitions:

- Person Insured – Same as Section 1 property overages (insured + household)

- Premises insured:
o All premises described on policy
o Temp. residence rented for no more then 90 days. (Hotel, or rented vacation home)
o Students rented premise can be rented more then 90 days (example: dorm room)
o Premises in Canada intended to be principal residence is insured upto 30 days.
o Land in Canada where you’re building 1-3 family residence to be occupied by the
insured
o Vacant land in Canada owned/rented by insured (excludes farmland)
o Family cemetery plots.

Coverage E – Personal Liability

Supplementary Payments – Covered

Exclusions:

- Damage to own property

- Damage to property of others in the care, custody, control of insured
- Damage to property/fixtures from work done on them
- Injury to insured & anyone residing in insured’s household.
- Actions of named insured not residing at premises
- When insured voluntarily assumes liability except assumed in contract or would have been liable
anyways.

Coverage F – Voluntary Medical Payments

Payments – Amount stated on policy & within 1 year from accident

Voluntary – No fault benefit

Coverage G – Voluntary Payments for Damage to Property

Coverage:

- Damage unintentionally to others

- Intentionally caused by insured under 12 y/o

Exclusions:

- Damage to property “owned” by insured or their tenant

- Property under Section 1
- Loss of use, disappearance and theft.

Coverage H -Voluntary Compensation for Residence Employees

Employees: Covers occasional residence employees, but may cover permanent ones if named on policy

Covers –

- Loss of life
- Injury benefits
- Medical expenses temporary/permanent total disability

Special Limitations on personal liability policies:

Damage arising from vehicle owned by insured are covered by on a limited basis:

- Watercraft with outboard motor less then 16 HP

- Watercraft with any other type of motor less then 50 HP
- Non-motorized boat less than 8 meters long. Insured for 30 days if longer then that but then no
coverage after that.
- Domestic vehicles are covered under 25HP example. Lawn mowers, snow blowers, garden
tractors, etc…
- Motorized golf carts
- Motorized wheel chairs with more then 2 wheels designed for disabled people.

Damages arising from vehicle not owned by insured are covered for liability only:

- Any watercraft
- Self-propelled land/amphibious vehicles

The following uses of watercraft and motorized vehicles are not insured:

- Business purposes are excluded.

- Carrying passengers for compensation
- Business purposes
- Race/speed test
- Rented to others
- Used without owner.
Business or Business property is normally covered under your CGL expect for inquiry from the following
activities:

Covers:

- Personal actions of insured during business

- Occasional rental of insured’s residence
- Rental of units in a 2 – 3 family residence if insured(s) lives in 1 unit
- Rental of space in residence to others for occasional use
- Rental of more less then 3 parking spaces
- Part-time business (under 21 y/o)

Trailers: Trailers are only overed when not attached to a registered motor vehicle.

Exclusions for Personal Liability Policies:

- Business Activities inc. farming

- Professional Services
- Intentional Damage
- Abuse or Corporal Punishment
- Transmission of Disease
- Ownership/Use of Aircraft or Airport

Liability Insurance for Business

Liability Exposures:

A) Business premises
B) Business operations
C) Products
D) Completed operations
E) Personal Injury
F) Tenants’ legal liability
G) Medical Payments

CGL Commercial General Liability is sufficient for most businesses.

CGL Endorsements

- Product Liability
- Limited environmental Liability
- Employers bodily injury liability

There are some exposures even a CGL policy won’t cover you for, for example professional liability
insurance. This would need to be purchased on top of the CGL. A professional is anyone with special
knowledge or training. There are two classes, healthcare (malpractice liability) and consult
professionals(insurance brokers, mortgage brokers, etc... E/O insurance).

Garage Liability Insurance – Businesses that sell, repair, install, transport, operate vehicles
Umbrella Liability Insurance:

- Requires primary liability policies in place

- 2 coverages:
o Financial shortfall (this is when your primary policy limits have been exceed)
o Drop-down coverage (drops down to cover losses that are excluded from your primary
policy, as long as the umbrella doesn’t exclude it also.)
- Self-Insured Retention (SIR): deductible when claims – excluded by primary

Chapter 10 – Regulations & Professionalism

The Insurance act is the main piece of legislation that enforces the insurance industry.

Administration of the Insurance Act:

BC – Superintendent of Financial Institution

ON – Commissioner

RIBO – Registered Insurance Brokers of Ontario Act

BC, AB, SK, MB: Insurance Council –

- Licensing
- Complaint handling
- Trade practices
- Disciplinary issues.

The Insurance Act: Licensing Standards

Qualifications:

A) Must be licensed
B) Sponsored by a brokerage or insurer

Class of License:

- All classes (OTL) can’t sell other types of insurance, unless you have the other license required.

License Term: Usually 2 years

License Jurisdiction: Require license in province you do business in

Maintain High Ethics:

Reasons to get license revoked –

A) Guilty of misrepresentation, fraud, deceit, dishonesty

B) Contravenes provisions of the Insurance act + equivalent
C) Failure to remit premiums on time
D) Not complying with applicable legislation
E) Incompetent or untrustworthy
F) Misuses trust funds.
Setting Standards of Conduct – Other Influences:

3 fundamental Principles:

1) Priority of Client’s Interest

2) Product Suitability
3) Disclose Conflicts of Interest

Role of Insurance Council and RIBO:

1) Integrity
a. Conduct not meeting this standard
i. Conviction of a criminal offense
ii. Misappropriating or dishonest treatment of client $
iii. Taking improper advantage of a client’s inexperience
iv. Failing to be frank/candid
2) Competence
i. Give competent guidance
ii. Understand insurance principle
iii. Not act beyond level of competence
iv. Consult appropriate industry stakeholders
v. Under conflict resolution methods
3) Quality of Service
i. Return calls
ii. Give sufficient notice
iii. Inform coverage alterations
iv. Offer appropriate insurance

Maintain Professional Integrity

Be professional, have good customer service, and report insurance regulation breaches:

- Don’t be abusive, offensive, or unprofessional

- Demonstrate empathy in communication
- Tailor communications
- Conflict resolution and de-escalation methods

Confidentiality – No Sharing client info

Advising Clients – Conduct not meeting this standard:

- Sweeping general assurance

- Misleading clients
- Failing to advise of a policy warranty/condition

Fee Disclosure – Can’t charge any fees in excess of premiums (exceptions apply)

Encouraging Public Respect – Enhance public image of the industry.

Professional Association and Trust Fund

Professional Association – Most brokers are members of their provincial broker association; promotes a
professional image, contains code of conduct.

Trust Fund Regulations:

- Premium = Commission (Broker) + net premium (insurer)

- Account requirement (RIB Act)
- 2 accounts

PIPEDA

Overview – Governs how for profit business collect, store, use and disclose personal info. Can only use
info to help determine the most suitable insurance product.

Personal Info – Details about an identifiable person/business ex. Name, age, income, ID numbers

Enforcement and Penalties – Privacy commissioner of Canada oversees and enforces PIPEDA penalty up
to 100,000$

Risk Control – Hire dedicated IT staff or outsource to trusted providers, Use anti-virus software, spyware
blockers, firewalls. Conduct regular training for staff on privacy and data handling. Keep detailed records
of any data breaches.

Chapter 11 – Automobile Insurance in Canada

Auto Insurance – 3 Types of Coverage

1) 3rd party liability

2) Accident benefits – no fault basis, doesn’t matter if your at fault or not.
3) Loss of or damage to insured automobile. – Own Damage or Physical Damage.

2 Types of Insurer – Private and Government

Private – AB, ON, Atlantic Provinces

- Coverage is provided by SPF No. 1 Standard Auto Policy Form (OAP1 – In Ontario).
- Option coverages SEF – Standard Endorsement Forms
- Facility Associations: insures people with bad driving histories or high risk. All private insurers
are in this association, but not all of them write these risk.
Government Insurers – BC, SK, MB

Coverage:

3rd party liability, accident benefits, physical damage(own damage). – BC, MB, SK

BC – 200K 3rd party, AB Included, Physical damage (own damage) optional.

MB – 200K 3rd party, AB included, Physical damage $400 deductible.

SK – 200K 3rd party, AB included, Physical damage $500 deductible.

Private insurers in these provinces compete to sell excess insurance, however these limits above are
issued to all drivers in those provinces.

No Fault Insurance

Pure No Fault – Removes right of legal action

- MB & QC

Threshold No Fault – No legal action until past a $ threshold/severity.

Modified No Fault/Tort – SK, With a modified no fault system you can claim against government Insurer,
if they don’t pay you enough you can sue the responsible party for the remaining amount.

Application Form & Info

Application Form – Required to get information for underwriting, rate setting and to issue the policy.
SAF1(Standard Application Form 1).

Info Required – Original copy & signed by named Insured.

Information that would be on the SAF1 –

- Full name and Address

o For drivers abstract
o Territory that the vehicle will be used
o Include contact # & lessor’s name + address (If vehicle is leased)
- Policy Period
o Start @ application time & ends at 12:01 am local time (address of insured). Policy
period is normally up to 12 months, but you can get anywhere from 3 months up to 2
years.
- Description of Automobile
o Model, year, manufacturer, VIN, Name of Lessor if leased, if vehicle was purchased new
or used, etc…
- Insuring Agreement
o Coverages, Limits, premiums, minimum retained premiums(the minimum amount of
insurance the insurer keeps upon cancellation of the policy) , endorsements
- List of Drivers
o In household or business
 - Physical or Mental Impairment
o Anything that might affect safe driving (do you faint out of nowhere, heart disorders,
etc..)
- Driver History
o Convictions and claims.. over 6 years
- License History
o Suspensions, cancellations, lapses of license/permit, etc.. over 6 years
- Insurance History
o Insurer name & expiry date of old policies over 3 years
- Used of Automobile
o Primary usage, commutes, annual driving distance
- Business Use
o Must notify if business falls into a certain category (renting the car to people, carrying
passengers for compensation, carrying explosives or radioactive materials, transferring
goods for compensation) The owners form doesn’t cover these so you’ll need an
endorsement.
- Declaration of Ownership
o Registered or actual
- Penalty for False Statement
o Must warn your clients

Additional Questions

Some application forms have additional questions that you may need to fill in on the back, examples of
these are:

- List drivers
- How many cars
- Type of fuel
- Any details of modifications
- Carpool usage

Commercially Rated Vehicles:

- Used of vehicle
- Type of ownership of attached equipment
- Radius vehicle is driven

Broker’s Report

- Is the applicant known to the broker?

- Was this policy bond up front?
- Etc…
Financial Services Regulatory Authority of Ontario (FSRA)

Regulates the financial industry.

FSRA – Replaced FSCO on June 8th 2019, the reason for that was to enhance consumer and pension
protection plans.

Regulated Sectors under the FSRA – Insurance Companies, Insurance Agents, and other financial
businesses.

Responsibilities –

- Regulating and supervising regulated sectors

- Promoting high standards of business conduct
- Overseeing market conduct and practices
- Assessing and mitigating systemic risks
- Implement evidence-based policy
- Encouraging innovation
- Handle licensing of life and general insurance agents

Mandate & Goal –

- Foster a sustainable and competitive financial sector

- Protect state revenues
- Prevent unfair competition
- Enhance transparency
- Monitor industry trends
- Educate
- Deter fraudulent practices

Consumer Complaints Resolution is one of FSRA biggest task. They assist and make suggestions to the
Superintendant if they find that are insurer has broken the law.

Consumer Complaints Resolution – Last stop for consumers with complaints

Consumer Complaint Process –

1) Complain
2) Request
3) Escalate to FSRA (Market Conduct Division) – regulatory review or referral or GIO (General
Insurance OmbudService) – Informal dispute resolution for home/auto/business insurance.
[Only available if your insurer is a GIO member]
Another key task of the FSRA is to handle Automobile Insurance Driver profiles and Rate Reviews.
Whenever an insurer wants to change their rates, they must file the rate change with the FSRA and they
need to approve them.

Process – Insurer must file for proposed changes

Credit Scoring – Can’t be used for insurance purposes.

Credit Info – Any info about a person’s creditworthiness.

Additional Info/Task about the FSRA

- Help Insurance Accident Benefits Dispute Resolutions

- Mediation – Is mandatory when it comes to these types of disputes.
- Arbitration – An alternative to going to court.
- Motor Vehicle Accident Claims Fund (MCACF) – Ontario Residents can get there AB or sue for
the $.
- Compulsory Automobile Insurance Act
o All drivers in ON must have minimum auto insurance, 200K Liability.
o Ensures financial responsibility and compensation access
- Licensing – Licenses agents, companies and mortgage brokers
- Regulation and Enforcement – Governs areas including pensions, credit unions, etc…

OAP 1 – Owner’s Form – Main Policy form.

General Info

4 Mandatory Coverages

A) Liability Coverage (Section 3) – Damage the insured causes to other people

B) Accident Benefits (AB) (Section 4) – No-fault benefits to insured
C) Uninsured Automobile Coverage (UMP) (Section 5) – Insured and Family is injured by an
uninsured automobile.
D) Direct Compensation – Property Damage Coverage (DCPD) (Section 6) – Loss of us/damage to a
car & contents (if not at fault) See OPCF 49 for endorsements allowing clients to opt out of
DCPD.

4 Optional Coverages

A) Increased Liability Limits

B) Physical Damage Coverage (Own Damage) – Loss or Damage to your own vehicle
a. All Perils
b. Specified Perils
c. Collison
d. Comprehensive
C) Optional Accident Benefit Coverage (More limits, etc…)
D) Other Coverage and/or Policy Changes – OPCF

Notice of Accident – Report within 7 days of accident (best-effort)

Fault Determination Rules – Standardized in ON Insurance Act

- Consider multiple factos

- Fault degree: % attributed to each driver (100%, shared fault, or not fault)
- Role of insurance companies: investigates the accident and determines fault
- Fault chart interpretation: identify the type of collision, locate the appropriate chart, analyze the
chart, match the accident scenario, determine fault percentage, documentation and reporting.

Motor Vehicle Liability Insurance Certificate

- Financial responsibility.

Section 1 – Introduction, shows you some terms and who’s involved with the policy

Coverage Territory – Canada, USA, Listed countries and vessels

Definitions –

1) Automobile – Described Automobile, newly acquired automobile, TSA, Other Automobile, and
Snowmobiles.
2) Excluded driver – Can add on for Accident benefits
3) Insured Person – Liability (You, and anyone you allow to drive the vehicle), AB(Named Insured,
Spouse or dependent, any occipiant who is an Ontario resident in the last 60 days, and anyone
living in Ontario).
4) Spouse

Responsibilities – No coverage if you fail to meet these responsibilities:

- Prompt notice
- Legal operation
- Legal use

Rights – Proof of loss is a formal document with proof of the claim.

- Payment of claims (paid 60 days of proof of loss, Accident benefits could be paid sooner.)
- Wrong classification (put you in the wrong rate class or category the insurer will refund you if
paid to much, if they under classed you and didn’t let you know within 60 days the rate remains,
if they notice within 60 days you must pay the correct premium.)
- Monthly payment options

Cancelling Insurance –

- Insured cancellation: short-rate refund, refund of any unearned premiums subject to an admin
fee.
- Insurer cancellation: pro-rate refund
o If Insurer is cancelling you for non-payment they have to give you 30 days’ notice if by
registered mail, and 10 days if hand delivered. If you can pay by noon the business day
before the last day of the notice period, they will keep your policy on board. Or they will
cancel at 12:01 am the last day.
 o If insurer wants to cancel due to repeat non-payments (3 missed payments) or other
reasons, the insurer only needs to give you 15 days’ notice if sent by registered mail, or
5 days if hand delivered.

Exclusions – Who & what we don’t cover

Section 2 – What automobiles are covered

Described Automobiles – Shown on your policy.

Newly Acquired Automobiles – Automatically covered for 14 days, the new car will get the same
coverage as your other car.

Temporary Substitute Automobile – Not owned by insured or housemate & used while described car is
out of service, if the rental car or other TSA has its own, OWN DAMAGE coverage that will pay first then
your insurance would kick in second.

Other Automobiles – Cars other than a described auto – Being driven by the insured or the spouse of the
insured, coverage incl. liability, AB, DCPD BUT NOT OWN DAMAGE.

Trailers – Used on the described vehicle, Liability, AB.

Multiple Insured Vehicles = Separate Policies:

- Drive a Vehicle you don’t own = highest limit on the policy

- Drive a vehicle you don’t own but have 2+ vehicles = same as above ^ + conditions

Trailers and Towing – Trailers towed = 1 automobile but separate when comes to deductibles

Inspection – Insurer can inspect at any reasonable time.

Section 3 – Liability Coverage

This kicks in when a 3rd party is injured or there property is damaged by an insured.

Who is Covered –

1) Named Insured
2) Permitted drivers
3) Permitted operators

What is Covered – Injuries or property damage to a 3rd party if accident happens in Canada or US.

Insurer Agreement –

1) Handle claims
2) Pay liable amounts
3) Pay out of pocket expenses, defense costs, court costs, post-judgement interest

Insureds’ Responsibilities –

1) Notify of loss – Within 7 days of the loss

2) Make a statutory declaration – That an insured person was driving
 3) Cooperate
4) Forward legal documents – As soon as you get them.
5) Not admit liability
6) Absolute liability

Exclusions

- Any damage to the insured own property

- Contamination of property carried in car
- Nuclear hazards

Laws that Limit Legal Action

- Tort provisions: general damages – can sue if threshold has been met, threshold:
o Death, Permanent or serious disfigurement or function, and sue based on fault.
- Limitation Period: within 2 years
- Tort for economic losses: can sue for loss of income or earning capacity
- Tort for non-economic losses: can sue if past verbal and monetary threshold.

Section 4 – Accident Benefit Coverage

Optional Coverage –

1) Income replacement
2) Caregiver benefits
3) Dependent care benefits
4) Medical, Rehab, attendant care
5) Death and Funeral expenses
6) Indexation of benefits payable

Who is Covered –

1) Named Insured, spouse and dependents

2) Listed drivers
3) Other people without car/insurance
4) Accidents outside ON – Name insured and dependents and any occupant of Ontario as long as
they’ve lived there more then the last 60 days.
5) Psychological injury to uninvolved family members

How No-Fault Rules Applies

1) Non-catastrophic
2) Catastrophic

Priority of Payments/Claims

1) Claim own/spouse’s insurer

2) Insurer of the vehicle
3) Insurer of other involved vehicle
4) ON MVAC – Motor Vehicle Accident Fund
Types of Benefits –

1) Income Replacement Benefits (IRB)

a. This is for people who are impaired by an accident, this will pay if the person was
employed and within 104 weeks of the accident becomes unable to work. If you are
unemployed you can still get some payments as long as you worked 26 weeks out of the
52 weeks in the year, or are on EI.
i. No payments for the first 7 days of disability or after 104 weeks.
1. The amount you can get paid is 70% of your income.
2. If you get it for more then 104 weeks the requirements are raised.
3. Benefits are not available for non-earners for the first 4 weeks.
2) Medical, rehabilitation and attendant care benefits
a. Medical benefits, pay for reasonable medical expenses not covered by provincial
medical programs.
b. Rehabilitation coverage gives you social rehab and physical rehab
c. Attendant care pays for a caregiver to take care of you
i. Minor benefits is 3500 and 0$ for attendant care
3) Death and funeral benefits
a. 6000$ in funeral benefits
b. Death, 25000$ to spouse, and 10,000$ to each dependent
4) Other expenses covered
a. Loss education payments, visitor expenses for people who visit the injured during their
recovery.
5) Optional benefits –
a. Income replacement to 600$-800$-1000$ a week.
b. Optional caregiver and attendant caregiver benefit for higher limits.
c. Dependent care benefit – Extra benefits for insured to take care of dependent.
d. Optional combined medical reb and attendant care

General Exclusions –

Conditions apply for:

1) No IRB/non-earner benefit if the driver knew or should have known the vehicle wasn’t insured.
Drives when illegal, or vehicle is being operated without the owners concept.
2) No IRB/non-earner benefit, educational expenses, expenses of visitors, housekeeping benefit if
there was a known material misrepresentation, or didn’t tell the company about a material
change.
3) Insurer withholds “IRB” – If you operated the machine while impaired, when the blood alcohol
level is above the level limit.

If you claim against workers comp you can’t claim against OAP1 – AB, you can’t get both.

Procedures for claiming Benefits –

1) Apply for AB within 7 days of accident

2) 30 days to submit the application
 3) 14 days to fulfill insurer’s request

Method of Payment –

1) Insurer pays in 14 days or gives denial within 14 days of your application or date of the next
payment is due. of your application or date of the next payment is due.

Limitation Period –

1) 2 years to sue the insurer – why you might sue them is for any unpaid claims amount

Minor Injury Guidelines

1) Pays up to $3500 unless Dr. says it isn’t enough, due to some type of pre-diagnosed condition.

Recovery of Healthcare Expenses – Catastrophic Impairment

1) Can sue if damages are greater verbal threshold – Lose of 2 or more limbs, brain impairment or
more then 55% of impairment of a person.

“IRB” = Reduced or Eliminated

1) Based on insured’s actions – Illegal driving, drunk driving, material misrepresentation, etc…

Section 5 – Uninsured Automobile Coverage

Protects people hit by an uninsured or unidentified vehicles. Covers both bodily injury and property
damage. Any bodily damage to you or another person is covered.

Claims Process for Catastrophic Injuries for Not-At-Fault Party:

1) Claim from their AB

2) Sue a-fault party for residual damage
3) Collect their uninsured auto coverage

What is Covered:

1) Bodily injury to you and other insured persons

2) Death/bodily injury to others
3) Certain property damage

Limitations and Exceptions

1) No auto liability policy, enough money from an unsatisfied judgement fund, involving
radioactive contamination/materials, deductible ($300), >25k in damages, dmg while driven by
excluded person
2) Payment is up to the jurisdictions maximum required. ONTARIO is 200k.

Bodily Injury or Death Claims

1) Who is covered:
a. Occupants + named insured and spouse nd dependent relatives
b. Conditions must be met
 c. Must follow the procedure for accidents involving unidentified automobiles

Property Damage Claims – Must follow conditions (Notify the insurance company within 7 days, protect
car from futher damage, and not make repairs more then what is nessacary, provide all legal
documents, and proof of loss within 90 days) amount paid is ACV – Deductible.

Both Bodily Injury and Property Damage Claims – 95% for bodily injury & 5% property damage.

Section 6 – DCPD Coverage

This coverage is for damaged insured automobiles, trailers, equipment and contents and loss of us… For
this coverage to apply the accident must happen in Ontario and be with another Ontario licensed
vehicle. It insures the not at fault damage to your car.

This coverage exist because suing the at fault party, takes time and money. DCPD removes any small
losses from the court room.

Every insurance company will pay for the damages occurred to someone insured with them under the
assumption they are not at fault.

Example:

A) 2 people crash (fault is determined as 50/50)

a. Mike DCPD will pay Mike 50% of his car damage
b. Bob DCPD will pay BOB 50% of his car damage
c. Any additional damage would be under the insured personal physical damage coverage.

What is Covered: Loss of use(rent a car, take a taxi, etc…) or damage to auto and contents. DCPD exist
because you can’t sue for damages to cars in Ontario unless you meet a certain threshold which
normally relates to bodily injury.

Amount Paid:

A) Without DCPD and Tort Provinces = judge determines whos at fault

B) In Ontario fault is determined with fault determination rules.

Insured Responsibility:

A) Notify the insurer within 7 days

B) Protect vehicle for further damage
C) Not make unnessary repairs
D) Insurance company can inspect vehicle
E) POL within 90 days
F) Can not abandon vehicle to insurance.

OPCF 49 can remove DCPD.

Section 7 – Loss or Damage Coverage – Own Damage (optional)

Pays for any damages or loss of use for a vehicle that they own. If you are less then 25% at fault for
accidents the insurance companies can not raise your premiums.

What is Covers – Loss of use or damage to your automobile in excess of DCPD. If DCPD covers the
damage to your vehicle, section 7 would never kick in.

- If you purchase this insurance the insurance company has the right to inspect your vehicle.

4 coverage options –

1) Specified Perils (only covers the perils specified on the policy, fire, windstorm and hail, falling
object, lightening and explosion, earthquake, riot, theft, or accident involving water or land
transport vehicle that’s carrying the car).
2) Comprehensive (basically the all-risk version of specified perils, includes coverage for falling
object and vandalism, this basically covers any non-collision damage)
3) Collision or Upset (Tipping over or collision with another object, collision is defined as hitting an
object that is in contact with the ground, **However collision with animals are excluded, this is
part of comprehensive. ** Upset means the car hitting the ground, for example the car flipping
over).
4) All Peril is basically Collision plus comprehensive. *However, theft by housemate or employee is
covered if you purchase all perils.

Excluded Loss or Damage:

- Wear and tear

- Damage from illegal claim of ownership/disposal, theft by legal possessors
- Fraud or scam
- Radioactive contamination
- Damage to contents other than equipment
- Payment for recorded materials <25$
- Illegal Use
- Theft by housemate/employee. *

Deductible – Amount insured must pay on all losses. Fire and lightening losses have no deductible.

Additional Benefits:

- General average – If you have to throw your car off the boat.
- Salvage charges – pay any charges to protect the vehicle from further loss.
- Fire Department charges
- Custom duties – Covers duties if you import car parts.

Subrogation – The insurance company can no subrogate against anyone who you allowed to drive the
vehicle. However they can subrogate against, valets and car dealers as these people are bailees for hire
and should have their own insurance.
Temporary Substitute Automobiles (TSA) – Not owned by insured or anyone in the same household and
in use while your personal vehicle is unavailable. If any accident occurs the owner of TSA policy will have
there insurance cover the damage first, if coverage isn’t available, your insurance would kick in, but only
second.

The insurance will pay the deductible if the deductible is greater then the insured deductible.

Loss of Use due to Theft – Pays for reasonable expenses for you to rent a car, bus, etc.. Subject to a 900$
limit.

Repair/Replace – Insurer can choose to repair or replace the vehicle instead of paying cash for it, if they
are planning to repair or replace they must notify the insured within 7 days.

Section 8 – Statutory Conditions

This section outlines all the legal responsibilities of involved parties, and it is essentially the same in all
provinces.

If you breach a Statutory condition you will generally loss all coverage, but still receive accident benefits.

Conditions:

1) Material Change in Risk – Must notify the insurer of any material change in risk that you know
of.
2) Incorrect Classification – Refund premium + interest or request more $$, but they have to let
you know within 60 days
3) Monthly payments – Monthly installments that have an interest rate determined by the
insurance act.
4) Authority to Drive – Must be authorized by law.
5) Requirements for Loss or Damage to Persons or Property – Same as above. (Must not voluntary
assume liability except at own cost)
6) Requirements for Loss or Damage to Automobile –
- Insured responsibility
- Extra damage
- Necessary repair only
- Submit to an examination under oath + give relevant documents
- Insurer Liable for ACV
- Insurer repairing/replacing property = notify insured in 7 days
- No abandonment/salvage

Time Limit – Insured must send notice in 7 days of loss or ASAP.

Inspection of Automobile – They insurer can inspect @ any reasonable time

Insurer Payment – 60 days of proof of loss, you have 1 year to sue your insurer for loss of use or damage
to your vehicle, and 2 years to sure them for bodily damage.

Giving Notice – Insured or their agent or another party of interest

Termination –
 1) 3-strikes for non-payment
2) Insured can cancel @ anytime
3) Insurer cancels = pro-rate refund , By hand (5 days) or registered mail (15 days)
4) Cancellation starts @ 12:01 am (date specified)

Notice – By hand or registered mail

Accident Benefits – Exist even when violating Statutory Conditions

Endorsements [New]

OAP 1 is the standard policy if you want to make any changes to this policy you must do so with
endorsements.

Anything that needs an endorsement would be excluded in OAP1.

List of different endorsements.

OPCF 2 – Providing coverage when named person drive other automobile. (Extends other automobile
coverage in your policy to someone else named in this endorsement).

OPCF 3 – Drive Government Automobiles

OPCF 4A – Permission to Carry Explosives

OPCF 4B – Permission to Carry Radioactive Material

OPCF 5 – Permission to Rent or Lease Automobiles and Extending Coverage to specified lessee(s).

OPCF 5C – Permission to Rent or Lease

OPCF 5D – Conversion Coverage (rented or Leased automobile) – This covers you if someone you rent
your car to runs away, even with legal procession.

OPCF 6A – Permission to Carry paying passengers

OPCF 6B – School Bus

OPCF 6C – Public Passenger Vehicles.

OPCF 6D – Driving Training School

OPCF 6F – Public Passenger Vehicles

OPCF 7 – Separate Limits (separate different limits for section 3 [liability part])

OPCF 8 – Property Damage Reimbursement

OPCF 9 – Marine Use Excluded

OPCF 13C – Restricting Glass Coverage – restricts glass coverage by the perils specified in this
endorsement.

OPCF 16 – Suspension of Coverage – park your vehicle for the winter.

OPCF 17 – Reinstatement of Coverage – takes the vehicle out of parking for winter.

OPCF 19 – Limiting the Amount Paid for Loss or Damage

OPCF 19A – Agreed value of automobile

OPCF 20 – Coverage for Transportation Replacement

OPCF 20A – Transportation Replacement Coverage/Downtime Coverage

OPCF 21A – Monthly Reporting Basis Fleet – Covers vehicles leased for more then 30 days. Requires
updates every month.

OPCF 21B – Blanket Fleet Coverage for Ontario Licensed Automobiles – Ensures you fleet vehicles on a
blanket basis.

OPCF 22 – Damage to Property of Passengers

OPCF 23A – Lienholder Protection

OPCF 23B – Mortgage (Broad Form)

OPCF 24 – Fire Apparatus

OPCF 25A – Alteration (You can write the change you want to make)

OPCF 27 – Liability for Damage to Non-Owned Automobile(s) and providing other coverage when
insured person drive other automobiles

OPCF 27B – Business Operations – Liability for Damage to Non-Owned Automobile(s) in the Insured’s
Care, Custody or Control.

OPCF 28 – Reducing Coverage for Named Persons

OPCF 28A – Excluded Driver

OPCF 29 – Additional Coverage for Named Person(s)

OPCF 30 – Removing Coverage for Attached Machinery

OPCF 31 – Non-owned Equipment (rented woodchipper, etc…)

OPCF 32 – Use of Recreational Vehicles by Unlicensed Operators. (Snow mobiles, dune buggys, etc…)

OPCF 35 – Coverage for Emergency Road Service – Give you 50$ if vehicle is disabled.

OPCF 38 – Agreed Limit for Automobile Electronic Accessories and Equipment – Sets an agreed limit for
aftermarket electronics.

OPCF 39 – Accident Forgiveness (Accident Waiver)

OPCF 40 – Fire Deductible – Makes fire and theft subject to a deductible.

OPCF 43 – Removing Depreciation Deduction – Gives you Replacement Value and not ACV, you need to
be the first owner of the vehicle.
OPCF 43A – Removing Depreciation Deduction for Specified Lessee(s)

OPCF 44R – Family Protection Endorsement

OPCF 46 – Pre-determined Income from Self-Employment Agreement

OPCF 47 – Agreement Not to Reply on SABS Priority of Payment Rules

OPCF 48 – Added Coverage to Offset Tort Deductibles. – 10000$ to insured for non-money related
damages, and 5000$ to anyone else entitled.

OPCF 49 – Agreement Not to Recover for Loss or Damage from an Automobile Collision [New January 1 st
2024] Makes DCPD optional, you can remove it.

Conviction Protector – Maintain your insurance premiums after a minor conviction.

[NEW] The Facility Association

The Facility Association (FA) is a group of all the insurers in order to insure substandard drivers. To drive
you need insurance in Ontario you need insurance, this FA allows everyone to get insured.

Steps to place business with the FA – Client comes to you, fill out an application:

1) Check underwriting standards and see if this client fits your companies’ guidelines.
- If they don’t check FA UW standards to see what rate class, they would charge.
2) Check FA UW standards
3) Refer to FA
4) Collect premium and issue policy

The FA is not an insurance company, they contract insurance companies and its members to UW and
adjust claims and issue a monthly participate report to its members.

Servicing Carriers – Appointed by the FA & paid to conduct business, they need to follow FA rules. They
would adjust claims based off by the guidelines set up by the FA. Audited twice a year.

Interactions – Contract is made between FA, servicing carrier and broker (contact only when needed).

Policy Issuance and Claim Settlement

Blank Applications – FA sends blank applications to the Servicing Carrier who then sends them to
brokers who are working with the servicing carrier.

Role of the Servicing Carrier – Underwrites, does paperwork, distributes FA Manual of Rules and Rules to
Brokers.

FA Manual of Rates and Rules – Risk classification and premium calculation and surcharge

Premiums –

- Classification
- Vehicle Type
- Industry limits/deductibles
- Surcharges and discounts
Broker’s Role

Determine Client Needs

Find the Best Deal

Final Option: Go to FA

OAP 2 – Driver’s Policy

Purpose of OAP 2 is when you want to drive someone else’s car and you have no personal insurance. Or
the owner of the vehicle you want to drive doesn’t have insurance on said vehicle.

Structured – Similar to OAP 1 (Section 1-6) There is no coverage for owned damage because you don’t
legally own the vehicle.

Rating –

1) Type of vehicle (What type of vehicle you’ll be driving, or likely to be driven)

2) Type of use
3) Assumed Liability (any liability you will be assuming, for example a rental car contract may
require you to take on the liability yourself.)

[NEW] OAP 4 – Garage Automobile Policy

The garage automobile policy is for businesses that operate, deal, repair, store or park cars.

Structure – Similar to OAP 1 (Section 1-8).

Covers:

- Liability, AB, UMP, DCPD, of owners/partners/FT employees when driving business vehicle.
- Owned/non owned cars.

[NEW] Standard Policy Forms (SPF) 6-9

Standard Non-Owned Automobile Policy SPF 6 – For employers held liable because of employees, while
driving a owned or non-owned vehicle. Employers can be held liable for the torts of there employees.

Excess Automobile Policy SPF 7 – Excess AB + Liability coverage, for provinces with government
insurance policies.

Lessor’s Contingent Automobile Policy SPF 8 – Pays lessor’s contingent damages – lessor is the person
leasing the vehicle out (Toyota leasing a vehicle to me). SPF 8 pays when there is something wrong with
the policy or something became invalid.

Standard Policy Forms (SPF) 9

Transportation Network Policy – Adds coverage from ride-sharing drivers. (Uber buys SPF 9 to cover
drivers while working, offers liability and AB to passengers using the ride-sharing services).
Chapter 12 – Automobile Insurance in Canada

[NEW] Statutory Conditions and Endorsements

Statutory Conditions

Material Change in Risk – Notify insurer ASAP and in writing

Prohibited used by insured – Insured(s) shall not use the automobile under certain conditions unless
authorized/qualified

Requirements Upon BI or PD

- Promptly notify insurer of any BI/PD

- Verify by oath
- Forward legal papers to insurer
- Assist in defense
- Shall not do certain acts

Requirements Upon Loss of Damage to Car

- Promptly report all details

- Take reasonable steps to prevent further loss
- Make statutory declarations within 90 days
- No repairs other than the necessary
- Submit to an examination under oath and send related documents
- Insurer pays ACV
- Repair or replace
- No abandonment or salvage
- Appraisal