You are a broker and you are in the process of selling an MSPF 1 to a potential client for his 8-passenger minivan. Your client has some concerns and a few questions. Provide detailed answers to each of your client’s questions below.
a) My entire family is planning a road trip through parts of Canada, the U.S.A., and Mexico. What kind of coverage will this policy provide us with?
b) If I buy a new car, will it be covered under this policy?
c) I have a camping trailer that we will be pulling during the road trip. Do I need to insure it?
d) Is coverage provided if we use the vehicle for a business offering sightseeing adventures? We will only be charging tourists $5.00 for the trip.
- Coverage will be provided when travelling through Canada and the U.S.A but not to Mexico.
- This provision specifies that the policy applies only while the automobile is being operated,
o Or parked within Canada,
o The U.S.A.,
o Or upon a vessel plying between ports of those countries.
- There is no coverage if an automobile is used or stored in Mexico.
- Automobile insurance must be purchased from a Mexican insurer before crossing the border.
b) Newly Acquired Automobile
- The new vehicle will be covered.
- When an insured purchases an additional or replacement automobile, coverage is automatically extended to it,
o Subject to certain conditions.
- The insured must notify the insurer within 14 days of taking possession of the newly acquired automobile.
- This gives her time to have the change to her policy properly recorded.
- However, if an insured has other valid insurance on the newly acquired automobile
o Or if the same insurer does not insure all automobiles owned by her,
o Coverage does not extend to the newly acquired automobile.
- Also, the insured must not be engaged in the business of selling automobiles.
- Note that the 14 days of coverage are automatic but not 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 a newly acquired automobile.
- Similarly, if the existing insured automobiles have different deductibles, then the higher deductible applies to the newly acquired automobile.
- The trailer will be covered.
- The MSPF 1 gives unlimited permission to the insured to pull trailers;
o 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 she must list it as a described automobile in the policy and purchase appropriate coverage.
- Liability coverage will not apply to an unattached trailer unless a premium is charged.
- Since there are many liability hazards associated with an unattached trailer, a prudent insured will purchase specific liability coverage on a trailer.
d) Excluded Uses
- Coverage will not be provided.
- This exclusion states that unless coverage is expressly given by endorsement, the insurer will not be liable under this policy while the automobile is used as a taxicab,
o Public omnibus,
o Or sightseeing conveyance or for carrying passengers for compensation
o Or hire.