Chapter 5: General Provisions, Definitions, and Exclusions key point review questions

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Hirose187
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Chapter 5: General Provisions, Definitions, and Exclusions key point review questions
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2014-02-24 12:58:27
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Chapter General Provisions Definitions Exclusions
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Chapter 5: General Provisions, Definitions, and Exclusions
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  1. What are the territorial limitations of the MSPF
    1?
    • The territory provision specifies that the
    • policy applies only while the automobile is being operated, used, stored, or parked within Canada, the U.S.A., or upon a vessel plying between ports of those countries

    a) There is no coverage if automobile is stored orused in Mexico – automobile insurance needs to be purchased from a Mexican insurer before crossing the border
  2. 1) How is “occupant” defined under the MSPF 1?
    • Occupant is defined as a person driving, being
    • carried in or upon or entering or getting on to or alighting from an automobile
  3. 1)Does Autopac cover an occupant or driver of
    a vehicle being driven without the owner’s consent? Explain.
    • No person is entitled to compensation under
    • the MSPF 1 who is an occupant of any automobile being used without the consent
    • of the owner.

     

    • Ex: a passenger who is injured in an accident
    • while unknowingly riding in a stolen automobile will receive no compensation
    • from the automobile owner’s insurance.
  4. Why are garage personnel excluded from coverage under the MSPF 1?
    Because garage personnel require a Garage Policy(MSPF4) to cover them when they are working on customers’ automobiles.
  5. Describe 4 types of vehicle that are considered an automobile for those purpose of coverage under the MSPF 1.
    a) Described automobile:

    -  Automobile specifically described in the policy.

    - The certificate of insurance shows which coverages the insured has purchased for each described automobile.

     

    b) Newly Acquired Automobile:

    When an insured purchases an additional or replacement automobile, coverage is automatically extended to it, subject to certain conditions.

     

    • - The insured must notify the insurer within 14 days of taking possession of the newly acquired automobile. Which gives the
    • insured time to have the change to their policy properly recorded.

    • - However, if an insured has other valid insurance on the newly acquired automobile or if the same insurer does not insure all
    • automobiles owned by the insured, coverage does not extend to the newly acquired automobile. Also the insured must be engaged in the business of selling automobiles.

    • - 14 days of coverage are automatic but now free. Once notified, the insurer will issue an endorsement charging a premium from
    • the date the insured took possession of the new automobile.

    • - If an insured has insurance for more than 1
    • automobile, only coverages that are on all insured automobiles extend to the new automobile.

    • - Thus, if an insured already has 2 automobiles insured, 1 with collision and the other without, there would be no collision on
    • the newly acquired automobile. Similarly if the existing insured automobiles have different deductibles, then the higher deductible applies to the newly acquired automobile.

     

    c) Temporary substitute automobile:

     

    Is an automobile that is not owned by the insured or anyone living in the insured’s household, but that being used as a temporary substitute for a described automobile that cannot be used because of its breakdown, repair, servicing, loss, destruction or sale.

     

    - 3rd party coverage and Accident Benefits are extended to temporary substitute automobiles as defined by this provision

    • - Coverage for physical damage to temporary substitute automobiles is given by the Additional Agreements of Section C(Loss or Damage to Insured Automobile), which cover the insured’s legal liability for damage to
    • temporary substitute automobiles

    -  Automobile owner’s policy always applies 1st when the insured automobile is being operated with consent.

    - However, the policy of the driver of a temporary substitute automobile will respond – rather than, or in addition to, the owner’s policy – if the temporary substitute automobile is uninsured, or if the owner’s limit of liability under Third Party Liability is insufficient to pay a judgment or settlement

     

     

    d)      “Borrowed” automobile:

     

    The policy also covers other automobiles not owned by the insured, but driven by the insured or the insured’s spouse who lives with her, subject to certain conditions.

     

    • - The word “borrowed” does not appear in the
    • policy wording. It’s used to try and convey the type of automobile for which the policy would provide coverage.

    • - The coverage provided by the policy is the same as for temporary substitute automobiles except that no physical damage coverage
    • applies.

     

    • - Any automobile of the private passenger or
    • station wagon type, other than the described automobile, is covered while personally driven by the insured or by the insured’s spouse who lives in the same dwelling, provided that:

     

    • a) The described automobile is of the private
    • passenger or station wagon type;

    • b)     
    • The insured is an individual, or the insureds
    • are spouses of each other ;

    • c) The automobile is not being driven by the
    • insured or the insured’s spouse in connection with a garage business;

    • d) The automobile is not owned or regularly or frequently used by the insured or by any person or persons residing in the same
    • dwelling premises as the insured;

    • e) The automobile is not owned, hired, or leased by an employer of the insured or by an employer of any person or persons residing
    • in the same dwelling premises as the insured; and

    • f) The automobile is not used for carrying
    • passengers for compensation or hire or for commercial delivery.

     

    - If the insured is a corporation, unincorporated association, or registered co-partnership, the borrowed automobile coverage applies to an employee for whose regular use the insured company automobile is furnished, or to the employee’s spouse who reside in the same dwelling premises as the employee.

    Autopac: is more specific. Temporary substitute or burrowed automobiles used for more than 30 days are not covered, even if the loss occurs within the 30 days.

     

     

     

     

     

     

     

    e) Trailer: MSPF 1 gives unlimited permission to the insured to pull trailers; it does not differentiate between owned or non-owned trailers.

     

    • - Third Party Liability coverage and Accident
    • Benefits will apply to any trailer used in connection with the automobile.

    - If the insured requires physical damage coverage on an owned trailer, then the insured must list it as a described automobile in policy and purchase appropriate coverage.
  6. Of these 4 types of vehicle, which ones are owned by the insured?
    Described automobile and Newly acquired
  7. Of these 4 types of vehicle, which ones are
    not owned by the insured?
    • Temporary substitute automobile and borrowed
    • automobile
  8. What coverage is available under the MSPF 1
    to cover damage that an insured causes to a temporary substitute automobile while driving it?
    Coverage by Additional Agreements of Section C gives coverage for physical damage to temporary substitute automobiles.
  9. What limitation does Autopac place on coverage
    for temporary substitute vehicles?
    Temporary substitute or borrowed automobiles used for more than 30 days are not covered, even if the loss happens within the 30 days.
  10. How does coverage for newly acquired vehicles covered under Autopac differ from coverage provided under the MSPF 1?
    MSPF1:

    - 14 days of coverage

    - Coverage extends to an additional vehicle

     

    Autopac:

    - 7 days of coverage

    - Does not extend to additional vehicle

    - 7 day grace period applies to substitutions only if the insured disposes of the vehicle that is being replaced, and the new vehicle is of the same registration class
  11. Why are war risks excluded under the MSPF1?
    Losses would be of a magnitude beyond the ability of private industry to absorb
  12. What uses of an automobile are excluded under the MSPF1?
    a) The automobile is rented or leased to another (when an employee uses his own automobile on the business of his employer and is paid, it is not considered renting or leasing the automobile to another);

    b) The automobile is used to carry explosives or radioactive material for research, education, development, or industrial purposes( or for any purposes incidental to these uses); or

    • c) The automobile is used as a taxicab, public
    • omnibus, livery, jitney, or sightseeing conveyance or carrying passengers for
    • compensation or hire
  13. What are uses not considered for carrying
    passengers for compensation or hire under the MSPF 1?
    a) Giving a ride to someone in return for a ride

    • b) Sharing the cost of an occasional trip with
    • others in the automobile

    c) Carrying a domestic worker hired by an insured or the insured’s spouse

    • d) Carrying current or prospective clients and
    • customers

    e) Occasionally carrying children to or from school activities that are conducted within the educational program
  14. Why is carrying passengers for compensation
    not excluded under Autopac?
    Because with Autopac , in order to have coverage the vehicle must be registered properly and the proper use declared.
  15. How can an insured obtain coverage for an excluded use under the MSPF 1?
    Insured’s who need the coverage may “buy back” excluded uses by purchasing specific endorsements.

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