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What do we mean when we say that Quebec has a "split" system of automobile insurance?
"split" system was implemented where government and private insurers each have separate responsibilities, provide separate mandatory coverages, and do not compete in the delivery of automobile insurance.
- The government plan administered by the SAAQ provides basic coverage for bodily injury.
- Private insurers provide Civil Liability coverage, which corresponds to the 3rd party liability coverage available in other provinces.
- Coverage for property damage is provided on a direct compensation basis, and like Ontario and New Brunswick, insureds deal only with their own insurers for claims regardless of fault.
What is the role of the Societe de l'assurance automobile du Quebec (SAAQ)?
The government plan administered by the SAAQ provides basic coverage for bodily injury.
How are the Quebec government automobile insurance plan and all of its functions financed?
The Quebec government automobile insurance plan and all of its functions are financed mainly by automobile owners when they register their vehicles, by automobile drivers when they obtain or renew their driving licenses, and by investment income.
What categories of persons are entitled to compensation under the no-fault bodily injury plan administered by the SAAQ?
a) Residents of Quebec(and their dependants) for accidents that occur in Quebec or outside Quebec.
b) The owner, driver, and passengers of automobiles registered in Quebec, involved in an accident in Quebec
c) Non-residents of Quebec, involved in an accident that occurs in Quebec with a Quebec insured, but only to the extent they are not responsible for the accident( unless there is a reciprocal agreement between the SAAQ and the province where the victim is a resident)
Are Quebec motorists allowed to sue for bodily injury caused by an automobile in Quebec? Explain.
Quebec was the first jurisdiction in North America to totally ban lawsuits for bodily injury caused by an automobile. Neither residents, nor non-residents involved in accident occurring in Quebec have a right to sue. Victims, in return, expect to be paid for claims within a reasonable time and without having to incur legal fees.
If the accident occurred outside Quebec, the right to sue is subject to the legislation of the jurisdiction where the accident occurred. Usually
a) a resident of Quebec who sustains bodily injury can sue a responsible party to recover the portion of bodily injury damages that exceeds the compensation paid by SAAQ; and
b) a 3rd party who is a non-resident may sue a responsible resident of Quebec. (The Quebecer is protected under the Civil Liability coverage provided by a private insurer.)
What alternatives are available to challenge decisions rendered by the SAAQ?
The following alternatives are available to challenge decisions rendered by the SAAQ
- a) The Bureau de revision
- The victim must complete an Application for Review and submit it to SAAQ within 60 days of the postmarked date of the decision.
b) An appeal before the Commission des affaires sociales
When the victim is dissatisfied with the review decision by the SAAQ an appeal may be filed within 90 days of the date the Bureau de revision rendered its decision. The Commission's decision is final.
Which provinces have made reciprocal agreements with the SAAQ?
Alberta, Manitoba and Ontario to deal with compensation to injured automobile accident victims.
- They apply to all accidents occurring after the agreements were signed.
What bodily injury benefits are provided for in the Automobile Insurance Act?
The Automobile Insurance Act provides for the following bodily injury benefits:
a) Income replacement and other indemnities
b) Death benefits
c) Compensation for non-pecuniary damage
d) Reimbursement of certain expenses and rehabilitation
What categories of victims are entitled to receive income replacement benefits?
The Automobile Insurance Act categorizes victims as follows:
a) Full-time employees
b) Temporary or part-time employees
c) Persons unemployed but able to work
d) Persons under age 16
e) Students aged 16 or over attending a secondary or post-secondary educational institution on a full-time basis, and students who have employment earnings
f) Persons aged 64 or over
g) Persons unable to hold any employment
A person who does not qualify for income replacement, may be entitled to another type of reimbursement or lump sum payment.
What benefits are available to cover funeral expenses?
The SAAQ pays a lump sum indemnity for funeral expenses to the beneficiaries of the deceased victim, up to a prescribed limit.
A victim's parents are entitled to share the lump sum indemnity equally over and above the indemnity for funeral expenses if the victim is a minor. Otherwise, the settlement goes to the estate.
The surviving spouse is entitled to a lump-sum benefit based on the victim's gross income and age.
Dependants other than the spouse are also entitled to a lump-sum benefit. This amount is established based on their age at the time of the victim's death.
If a dependant is already disabled at the time of the victim's death, an additional lump-sum benefit will be paid. Orphans of a single-parent family (of which the only parent died in the accident) are entitled, in addition to their indemnity as dependents, to the lump-sum spousal benefit divided equally among them.
The lump-sum benefits paid to the spouse or dependents of a deceased victim may be spread into periodic installments over a period of 20 years.
What is the purpose of the Fonds d'indemnisation (Indemnity Fund)?
The Automobile Insurance Act also provides for the Fonds d'indemnisation des victimes d'accident d'automobile, to be maintained as a service within the SAAQ and used mainly to compensate innocent victims of property damage - since most victims of bodily injury will be satisfied through the government plan. The SAAQ is responsible for the administration and management of the "Fonds."
A victim sustaining property damage, and in some cases bodily injury, who has obtained a final judgment in Quebec following an automobile accident that occurred in Quebec may apply to the "Fonds." Payments are limited to $50,000 per accident.
The Societe pays compensation up to $10,000 for property damage to a vehicle. All compensation payable for property damage is subject to a $500 deductible set by regulation. For damage caused to a vehicle, the deductible will be the higher of
a) $500 for a vehicle valued under $5,000 on the day when the accident occurred; or
b) 10% of the worth of a vehicle valued $5,010 or more on the day of the accident.
The victim must submit a sworn declaration confirming that the judgment has not been satisfied and no insurer will benefit by the amount claimed. The statement must also disclose any other possible claim arising out of the same accident.
Payment by the "Fonds" transfers to it all the claimant's rights of recovery.
Give an example of situation where bodily injury suffered by a motorist would not be covered by the SAAQ plan.
a) An accident involving a motorized recreational vehicle off a public highway results in a broken leg for the victim.
b) An insured Quebecer hits a pedestrian in Florida.
c) A non-resident of Quebec is a passenger in the insured's automobile in an accident outside of Quebec, for which the insured is at fault.
What are the main duties of the Groupement des assureurs automobiles(GAA)?
The Main duties of the GAA are
a) to establish a mechanism to enable every automobile owner to find an authorized insurer with whom he or she may purchase liability insurance;
Each insurer doing business in Quebec has agree to provide this insurance to any automobile owner requesting it - through the risk sharing plan called Plan de repartition des risques(PRR), if needed.
The purpose of the PRR is similar to the risk sharing pools managed by the Facility Association in other provinces. Both allow participating insurers to share the underwriting profit or loss and administrative costs of the pooled risks.
However, in Quebec, insurers may transfer any risk they have accepted through the regular market that does not meet their minimum underwriting standards. In other provinces, insurers transfer risk that meet their underwriting rules, but present higher than average risk of loss. (This topic is discussed in more detail in a previous chapter.)
b) to oversee collision repair appraisal;
Under the Automobile Insurance Act, the GAA has created a network of appraisal centres, which are subject to its standards, procedures, and regulatory measures. The goal is to keep premiums reasonable, and to minimize compensation costs by using precise and professional appraisal techniques.
c) to establish and publish a standardized accident report form; and
d) to establish and administer a direct compensation agreement.
How is Civil Liability coverage provided?
Private insurers provide Civil Liability coverage, which corresponds to the 3rd party liability coverage available in other provinces.
What is the Direct Compensation Agreement for the settlement of automobile insurance claims?
In Quebec, all automobile insurers are bound by the Direct Compensation Agreement for the settlement of automobile insurance claims. Under the provisions of this agreement, liability for property damage in a collision occurring in Quebec, between at least 2 automobiles whose owners have been identified, is determined by the Driver's Fault Chart - similar to the way the Fault Determination Rules are used in Ontario and New Brunswick.
What is the Driver's Fault Chart?
Driver's Fault Chart: defines several types of accident possibilities and who would be at fault or not.
Is there a difference in the amount a motorist recovers for damage to an owned vehicle when the motorist is partially responsible for the accident and has collision coverage versus when there is no collision coverage? Explain.
Are automobile insurance application forms regulated in Quebec? Explain.
The application form itself is not regulated in Quebec, so questions found in applications can vary slightly from one insurer to another. However, the Declarations derived from it are standard for all insurers.
What must an insurer do if there is a difference between the application submitted by the motorist and the policy issued by the insurer?
If there are any differences between the application and the policy, the insurer must draw special attention to these differences in a separate written document to the client.
If a policy is not identical to the application and the insured is not properly notified, the insured can demand that the coverage requested in the application be provided.
Ex: if the application specified a $500,000 limit for Civil Liability coverage but the policy was issued for $200,000, the insured is entitled to be insured for $500,000.
The burden of proving any misrepresentation or a failure to disclose required facts rests with the insurer. If the insured misrepresents the facts, it will be easier for the insurer to prove it if the application has been signed by the client and contains the misleading or deceptive statement.
What is the major difference between the Quebec Policy Form 1 (QPF 1) and the standard automobile policy used in other provinces?