1) You are a broker and one of your clients, Joe Button, has just purchased a new vehicle. To protect his investment, he purchased a Basic Autopac policy with Comprehensive and Collision coverages. The Collision deductible is $300.00 and the Comprehensive deductible is $100.00. – this is impossible in MB. Only option for vehicles in Manitoba is All Perils coverage which would have the same deductible for collision and comprehensive.
How would the policy you sold him respond under the following conditions?
a) While driving to his favorite fishing hole, the insured hits a moose. The impact with the animal causes $10,000 damage to the vehicle.
b) Joe’s roommate steals the insured’s vehicle and disappears.
c) While driving to work Joe’s vehicle is struck from behind by another vehicle that was attempting to change lanes, causing $10,000 damage to Joe’s vehicle. The 3rd party driver is determined to be 100% at fault for the accident.
d) Joe runs a red light and a police cruiser attempts to pull him over to bring Joe’s vehicle to a stop. Joe attempts to avoid arrest by speeding up and escaping the police cruiser. Joe loses control of his vehicle when speeding and collides with the guard rail, causing $10,000 worth of damages. Joe is eventually charged.
1) a) Basic Autopac Coverage
- Joe’s collision damage with the moose would be covered under the Comprehensive section of his All Perils coverage as part of his Basic Autopac coverage.
- Basic Autopac includes All Perils coverage
o And Comprehensive coverage.
- Comprehensive insurance covers loss of or damage to the vehicle by most causes,
except those covered by collision.
- 1 of the perils covered includes impact with animals.
- Joe does have a comprehensive deductible of $100 which would apply.
- As a result Joe would receive $9,900 from MPI for the loss. – this isn’t quite accurate as the deductible would not apply if he had a $300, $200, or $100 deductible. Only a $500 deductible applies on wildlife claims.
b) Basic Autopac Exclusions
- Joe’s loss would not be covered under his Basic Autopac coverage.
- The Automobile Insurance Coverage Regulation further clarifies the scope of all perils coverage under basic Autopac by including provisions limiting the Corporation’s liability under this coverage.
- - They state that All Perils coverage does not cover loss or damage caused by the theft of
- the vehicle if the person who stole it lives in the same household as,
o Or is an employee of, the insured person.
c) Basic Autopac Coverage
- - The damage to Joe’s vehicle caused by the 3rd party vehicle would be covered
- under the Collision section of his All Perils coverage as part of his Basic
- Autopac coverage.
- Basic Autopac includes All Perils coverage.
o And Comprehensive coverage.
- Collision coverage indemnifies an insured for damage to the vehicle caused by impact with another vehicle,
o Or object,
o Or with the surface of the road.
- This coverage is available to an insured who is at fault in the crash.
- It will also cover the posts of towing,
o And salvage disposal, if needed.
- Joe does has have a Collision deductible of $500 which would apply.
D) Basic Autopac Conditions Coverage
- - As a result Joe would receive $9,900 from MPI for the loss. – you may want to add
- that if the other party carries a valid Autopac policy, Joe’s deductible would
- be waived through their policy
- Joe’s damages would not be covered by his basic Autopac policy.
- The automobile Insurance Coverage Regulation (Part 3, Division 2) includes conditions of coverage that further clarify the scope of all perils coverage under basic Autopac.
- To ensure that their All Perils coverage is valid, insureds must follow these conditions.
- The Regulation (Part 3, Division 2, Section 56(1)) states that the insured shall not drive or operate the vehicle to escape
o Or avoid arrest
o Or other similar police action
o Or in contravention of a signal from a peace officer requiring him or her to bring the vehicle to a stop.