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246 Cards in this Set

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General insurance is referred to as?

Property and casualty insurance

A client wants terrorism insurance for his hotel; however, the insurance companies that the broker deals with do not provide such coverage. The broker can obtain such coverage from?

Wholesale brokers who specialize in non standard or difficult to place risks

Material info disclosed to a broker or agent by a client is deemed to be?

Knowledge of the insurer

As an insurance professional, your role throughout the interaction with your client is?

Contact person, salesperson, insurance advisor, and service provider

What is utmost good faith

Is the legal principle that requires all people involved in an insurance contract to act with the highest ethical standard and requires full disclosure by the insured and brokers/agents of all information material to the contract

What is errors and omissions?

to have done something wrong to have not done something you should have done

What is the best defense against errors and omissions?

documentation: always keep a record in your file detailing whom you talked to, the date the discussion took place, what you talked about and the subsequent actions that you have taken

communications: communicate clearly with your clients what you will do on their behalf, and confirm action taken. Provide your insurers with prompt, complete instructions and information. Act within the scope of your authority and competence.

What are some possible causes of E&O?

-inadequate coverage

-the agent/broker did not understand the nature of the risk and did not obtain the full detail of the risk by asking the required questions

-the agent/broker did not pursue placing coverage

-wrongly advised the client that coverage was not available

-or wrongly advised the client that coverage was already in place when it was not

-wrong coverage ex. client requires replacement cost on his COED but the broker arranged coverage based on ACV

After the broker/agent has pre-qualified the client, what actions must he or she take to fulfill the insurance negotiating process?

- review the clients insurance portfolio

-solicit information from the client as required

-offer options to improve coverage, if possible

-carry out the clients instructions

-arrange insurance coverage

-arrange changes to existing coverage

-arrange for cancellation or lapse of coverage

Define risk

The possibility of loss or damage to property, or the change of incurring liability. Individuals transfer their risks, business and personal, to insurance companies by buying insurance policies.

What is an insurance policy?

A contract formed between an insurance company (the insurer) and a customer (the insured), in which the insurer reimburses the insured for specified losses.

What are the three major categories of insurance?

Social insurance

Life and health insurance

General insurance/property and casualty insurance

What is an insurance intermediary?

Also known as agents and brokers, they help in identifying insurance needs, matching those needs with products that are available, and facilitating insurance contracts to the satisfaction of both insurers and insureds.

What limits the type of insurance an intermediary can provide?

Insurance intermediaries can deal with all of the lines of insurance, provided they are licensed to do so

What are the difference between an agent and a broker?

Agents- generally sell and service the insurance policies offered by a single insurer. The agents are either employed by an insurer or operate independently on contract with only one insurer.

Brokers- Independent business people, own brokerages. The brokerage is paid commission for each policy it issues on behalf of its clients. Sometimes will charge a fee to clients for its services, rather then taking a commission from the insurer. Brokerages operate with multiple insurers.

- both act as intermediaries

-both act to facilitate the purchase of an insurance policy

-both service the account

What is the difference between an employed agent and an independent agent?

Employed agents- work directly for the insurer. These insurers are known as direct writers, because they sell insurance directly to the public. The insurance policies sold, business written and client list belong to the insurer.

Independent Agents- Maintain separate offices from the one insurer they deal with. These companies are known as agencies. The business and client list usually belong to the insurer, and commissions for new business is generally set higher to encourage production.

When would a wholesale broker be used?

When a clients risk cannot be adequately covered through the one or more insurers that a broker or agent represents, the broker or agent may be able to arrange coverage through a wholesale broker.

ex. golf courses, hotels or motels, fine art galleries

What is a non standard risk

Client could have poor loss history, or the risks, by their very nature, could be hard to place in regular markets. Non standard risks require a higher degree of underwriting expertise not generally available from the regular insurance markets.

Define agent as it is used in the Law of Agency

An agent is a person who is authorized to act on behalf of another. Under common law, agents are employed to secure contracts or act for their employers in contractual matters. Consequently, agents may be employees, or they may be independent business people.

What is a mandate, mandator and madatary?

mandate- a contract

mandator- the principal

mandatory- the agent


What are the responsibilities of an insurance intermediary?

The dual responsibilities of the intermediary role places obligations to act as both agent to the insurer and as principal and agent for the insured at different points in the insurance transaction.

-when soliciting insurance applications, describing types of coverage and policies available, and interpreting policy provisions, and interpreting policies provisions, intermediaries act for the insurer

-when providing insurance advise, carrying out specific tasks requested by a client, such as increasing coverage, and monitoring a clients insurance needs, they act for the client

From what document does an intermediary receive authority?

agency/brokerage contract or agreement

What is the purpose of the agency/brokerage contract or agreement?

Details the authority, obligations, rights and duties of each party. The contract is the basis of the relationship between the broker or independent agent and the insurer

Define duty of care

A legal duty that one owes to another, arising out of the principal relationship. Standards are prescribed by common law, the civil code of quebec, and statute law.

When acting as an insurance intermediary, perfection is not required, but a reasonable degree of care-that of a reasonable competent agent- is expected.

How are the rights of consumers protected?

Common law, civil code and statutory duties flow from the responsibilities assumed by intermediaries: what they say they will do, what they do, and to what extent clients have relied on statements made by them. These laws protect the rights of consumers. When it comes to analyzing to whom the duty of care is owed, the insurance professional can expect that the clients interests should come above those of the insurer.

What is an insurance intermediarys functions?

prospect for potential new clients

qualify the client

advise the client

facilitate the application for insurance

obtain instructions from the client

negotiate insurance

facilitate the claims process

How can you identify potential clients?

target marketing- developing a sales strategy to target a specific segment of the population

market segmentation- identifying the potential insureds you could approach based on your target marketing plan

advertising- advertising your services in relevant publications or by creating a sales publication to be distributed

cold-calling- contacting people you have never met, to introduce yourself and offer your services

referrals- selling to friends or family members of existing clients based on the clients recommendations

What advice does an insurance intermediary offer to a client?

-evaluate clients exposures and advise what improvements can be made to the clients current insurance program

-recommend insurance

-advise of all insurance available

- advise to control risk

What are some of the steps in the insurance negotiating process?

-review the clients insurance portfolio

-solicit information from the client, as required

-offer options to improve coverage, if possible

- carry out the clients instructions

-arrange insurance coverage

-arrange changes to existing coverage

-arrange for cancellation or lapsing of coverage

What actions and responsibilities do you have when a claim is reported?

-reassure your client that you are there to assist in notifying the insurer of the claim and in explaining the claims process to the client

-Review the situation and offer any immediate assistance if necessary

-avoid making any comments on the validity of a claim as brokers and agents do not confirm or deny coverage

-outline the basic claims process and advise your client of what to expect

-notify the insurer

- monitor the progress of the claim

- call the client to verify that the claim is progressing to his or her satisfaction

Why do licensing requirements for intermediaries exist in every jurisdiction?

They are protection for the consumer to ensure that those who advise the public on insurance matters are qualified to do so.

What is restrictive and progressive licensing?

Allows the license holder to transact business in only certain classes of insurance, and some offer different levels of licensing.

The first level permits the licensee to work under the supervision of a more experienced individual and handle only certain types of insurance.

After completing further study and obtaining work experience, individuals are permitted to write the next level of examination.

What characterizes a professional insurance agent or broker?

Must be well informed, comply with the law and relevant rules of insurance, and operate with the utmost good faith.

Under the code of ethics, what duties are brokers expected to render to their clients? To their insurers?

Duty to clients- provide the coverage best suited to the clients needs, not be swayed by remunerative gain, not take advantage of clients lack of knowledge or inexperience, hold information in strict confidence and competently perform services undertaken, which requires broker to be well educated and indicates the needs for continuing education

Duties to the insurer- be honest and trustworthy, stay within the terms of the broker agreement and disclose all relevant material facts to the insurer, even if it will make placing the risk difficult

What is a material fact

Any information that could affect the contract of insurance to an extent that, if it were disclosed, it wold change the agreement between the insurer and the insured. Material facts must always be disclosed. If such facts are not revealed when asked about, the policy involved could become void as a result, meaning the clients claim will not be paid.

What is PIPEDA?

The Personal Information Protections and Electronic Documents Act-governs the collection and use of personal information. PIPEDA, a federal statue, states that personal information collected must be relevant, and that all information collected must be held in the strictest of confidence.

What are the common elements of customer service?

Timeliness, clarity in conveying information, accuracy, courtesy and professional manners.

What skills are required for effective communication?

verbal- body language, tone, and the way words are delivered, not just through the words themselves

Written- email, letters, faxes etc.

Active listening- listen to what is being said, interpreting how it is being said, processing non verbal cues, questioning those parts that you did not understand, and confirming that what you did absorb was understood correctly.

What are matching and mirroring in verbal communication?

When communicating in person with a client if you tend to assume at least some of the same body positions or postures, this is matching. When similar actions are performed, as if looking in a mirror, this is called mirroring.

What are some of the cues to listen to during a telephone conversation?



-rate of speech

How would you prepare for a telephone conversation with a client?

make available the things you will need

- pad of paper


-access to the computer files

-client files for reference

-a calculator

-any forms or applications you may need

How would you counter a clients reaction to bad news?

Remain calm, clarify the clients position, keep the discussion focused on the facts, and avoid falling into the traps inherent to the specific situation.

Spend time with your client, appreciate their feelings, have empathy for the situation

What is a target market? What is a lead?

A source of potential clients, this may be further segmented into groups identifiable by age, socio-economic backgrounds, personal interests, business pursuits, coverage needs etc.

A Lead is a member of a group of potential clients that fits a certain profile, which you have determined as your marketing target.

What information do you require to qualify a client?


-address and email address

-phone numbers

-family information

-interests and hobbies

What are three sources of clients?

Referrals- majority of brokers business comes from referrals. Because existing clients have referred them, new prospects are generally from the same target segment.

Advertising/walk ins- advertising in the local media or yellow pages can generate clients. If your brokerage operates a storefront business clients may see your office and come in.

Cold calling- making contact with a person you do not know in order to introduce yourself and your services.

What is an X date and what is the importance of collecting them?

also known as an expiry date, tracking expiry dates is a way to form a database of prospective customers.

How long are files retained?

There are no provincial regulations that specify how long insurance documents must be kept or how they are to be kept. Generally insurance professionals are guided by the prescription periods applicable to various classes of insurance when determining the length of time that documents should be retained.

What is a prescription period

In law, is a time after which a cause of action ceases. In insurance, it is the time after which a claim may not be brought.

What is risk management?

The minimization (at a cost) of the detrimental effects of risk by identifying the risk, measuring the risk, and controlling the risk.

What is risk analysis?

Assessing your potential clients exposures in the broader context of risk. this includes, risk to physical property, financial exposures to liability risks, and the assessment of the potential client.

What are some property risks a client could face?

Physical property refers to any material goods a client may own. These can range from high value items such as a car or house, to a clients collection of antique dolls. Anything that would result in a financial loss to the client should loss or damage occur

What are some liability risks a client could face?

Liability refers to a legal obligation. Liability exists where an individual has a responsibility for the safety or property of another. Not only are individuals responsible for their own actions, however unintentional, they are also responsible for the actions of their children and pets.

When evaluating loss exposures, what are the three main aspects a broker should consider?

-The subject of insurance exposed to loss

-the perils that might give rise to loss

-the estimated financial impact a loss will cause

What is the subject of insurance?

What is exposed to loss. ex. house, car, personal property, liability

What is a peril?

An event that could cause a loss ex. fire, theft windstorm, explosion, earthquake, and vandalism.

What are the types of financial impact that can result from a loss?

direct losses- loss of property and contents

indirect losses- financial losses caused not by the event itself but as a consequence of the property being destroyed. ex. a small restaurant is destroyed by fire, as they can not operate due to this loss they will also have a loss of income.

Define two major types of hazard

A hazard is a condition that may cause a peril to occur.

physical hazard- a factor that may influence the outcome of a loss. It increased the change of a peril affecting the insured, or makes the damage resulting from the peril more severe. Usually it can be quite readily identified and measured and often it can be completely removed or reduced by preventive methods. ex. flammable materials stored near a heating system increase the likelihood of a fire occurring and spreading more quickly to other areas of the building.

Moral Hazard- refers to conditions attributable to the human element. It grows out of attitudes, and depends on the character of insureds and their employees. It can involve outright dishonesty, which could lead to fraud, but it is also concerned with carelessness and poor management. It may lead to the occurrence of a peril, or to making the resultant damage from a loss more severe.

What is the difference between moral hazard and morale hazard?

moral hazards are the characteristics of the insured (or applicant) that increase the probability or severity of a loss. ex. a client that has gone bankrupt several times may benefit financially from an insurance loss and would then find making an insurance claim attractive.

Morale hazard relates not to the dishonesty and the like, but to a poor attitude on the part of the insured. Ex. poor upkeep of the premises, poor maintenance of equipment, a don't care outlook, hiring low quality employees or lack of supervision.

What are the benefits of meeting a client in person?

- establish a one on one relationship

-if meeting at the clients residence or place of business you also have the opportunity to inspect the premises as part of your assessment.

-affords you the opportunity to secure a premium deposit immediately.

What is risk control?

An aspect of risk management, involves suggesting safety precautions for the identified loss exposure that can help prevent perils from occurring, or that can help reduce the extent of loss arising from a particular peril.

Why should brokers inform their clients about loss control or loss prevention techniques?

Using risk control techniques will reduce the amount of money that insurers pay in claims, which improves the financial results of the insurers and ultimately reduces insurance costs to consumers. Remind clients that extra care and investment now may save them the time and trouble of claims made later as a result of possibly preventable peril.

What is an application?

A request for insurance that introduces the applicant to the insurance company. It also identifies your brokerage as the broker of record, and identifies the insurer to whom you are directing the request for coverage.

Who is an applicant?

Can be a new client who has no coverage at all, is looking for an alternate quote for whatever policy is currently expiring, or wants to evaluate the services provided by another broker because they are not satisfied with their present broker

What is duty of disclosure?

Is fundamental to the principle of utmost good faith that underlies all insurance transactions. Misrepresentation of material facts in the application can have serious consequences, in the most extreme cases causing losses to be denied and/or the insured policy to be voided.

What is misrepresentation?

Giving false information to an underwriter, knowing it is false- in other words, telling a lie.

What is a representation?

A factual statement about the risk, either expressed or implied, that needs to be communicated to the underwriter so that the risk may be properly assessed.

What is an oral application?

When the insured and broker discuss insurance needs, either over the phone or in person, and you document your conversation in signed, dated notes.

What is a written application?

This may be a printed form provided by the insurer, a combination of a letter and forms developed by either the insurer or the broker, or just a letter. the form can be conventional paper or electronic versions.

What is CSIO/CEPA?

A national organization of property and casualty insurers and independent insurance brokers working together to achieve electronic business solutions for the insurance industry.

What is insurable interest?

When the applicant stands in such position to the subject of insurance that he or she could be financially prejudiced by that property's loss or damage, and financially benefited by its continued existence.

The applicant also has an insurable interest in his or her potential capability to pay damages in the event that he or she is found responsible (legally liable) for having caused injuries to other or damage to their property.

How can trade names be used as legal names?

Trade names are not legal entities until registered as a limited company.

What is a loss payee?

The generic term for someone other than the named insured to whom the proceeds of insurance will be paid.

What is a mortgagee?

A special class of loss payee. Mortgagees have a registered interest on real property-that is, buildings or land- offered as security for the money that they have loaned the property owner.

Unlike other loss payees, who are simply noted on the policy as such with respect to the property that they have an interest in, the mortgagees interests are protected by a separate insuring clause granting additional protection to the mortgagee.

Why do insurers want signed applications?

It becomes a declaration made by the applicant, confirming that the statements made are accurate and even when it does not form part of the policy, the application is the basis on which the contract issued.

What is the process that a broker takes when selecting personal lines insurance to match the needs of a client?

-Checking the insurers underwriting guidelines. These will normally be clearly outlined in the personal lines manual that each insurer provides your brokerage

-analyzing and comparing the products of your insurer. Each insurer has its own version of the various personal lines package policies-broad form and limited (or named perils) form. Automobile wordings are statutorily dictated by province

-selecting an insurance policy based on your analysis of your clients needs and the policies your insurers supply.

What is the process that a broker takes when selecting commercial lines insurance to match the needs of a client?

-applying your knowledge of the products available. Select appropriate policies based on your discussions with your client and your analysis of their insurance needs and the adequacy of their existing coverage.

-applying your knowledge of what your insurer(s) want. The insurers will have communicated to your broker management the classes of business they cover and the specific products they offer. Some of your markets may be better able than others to meet your clients insurance needs

-talking to your colleagues about which market would be the most appropriate for your client, if you are unclear about what your markets want. As you gain experience, you will come to know the types of business that you various markets prefer.

What is binding authority?

A brokers capacity to confirm to applicants that they have coverage against certain losses. Individuals with binding authority can tell their clients that they are covered by an insurance policy without first submitting the application for insurance to the insurer.

In what document is binding authority granted?

Broker agreement

Is there standard binding authority granted to all brokers?

Not all brokers are granted binding authority or the same degree of binding authority. When granted, binding authority is normally limited to personal lines policies and smaller commercial lines policies. The binding authority depends on the terms negotiated between insurer and brokerage, and may differ between brokerages contracted with the same insurer. ex. wholesale brokers generally are granted binding authority for specific situations only, such as pre arranged insurance programs where the wholesale broker operates as the insurer.

What are some of the terms of binding authority?

-the classes of risk and the limits of insurance that the brokerage is permitted to bind

-the risks that the brokerage cannot bind. (such risks could be extremely hazardous, or require special underwriting expertise, or an insurer may simply have decided not to insure these classes of risk, or not be licensed to write them.)

-the reporting requirements, including time frame within which the insurer expects the broker to forward notice of binding. That is, you will have a certain number of days after binding insurance to submit the binder to the insurer, or binding will not be valid, and you could be held liable for any uninsured or under insured loss.

What effect does binder authority have on a brokers powers?

The binding limits outlined in the broker agreement do not represent the maximumamount an insurer will consider; they primarily act as a control on brokers' bindingpowers.

What role does the broker have in preventing fraud?

Brokers have an important role to play in fraud prevention; they are the eyes andears of the insurer.

What are the warning signs of potential fraud?

Client wants you to backdate a policy

Client asks to bind coverage for a new risk without adequate information

A new applicant is in a hurry to get the cover bound

What is a binder?

A binder can be written or oral. Since there is typically a delay between the time a risk is bound and the time thepolicy is issued, it is preferable to have written confirmation of the coverage that wasbound.

What is the different between a binder and cover note?

There are two forms of document used to record interim or temporary cover:1. A cover note issued by the broker2. A binder issued by the insurer

What information is generally included in a binder?

-Name of the insured

-Mailing address of the insured

-Any loss payees or mortgagees

-Time and date that the coverage takes effect -Time and date the coverage expires

-Location and type of risk that is being insured

-Exact coverage details

-Clause that states that the cover is subject to all the terms and conditions usual tothe insurer's policy wording

Details of deductibles, special warranties, any conditions, or any special wordingsthat restrict or broaden coverage

-A clause stating, "This policy contains a clause that my limit the amount payable."

-Provisional premium charged for the binder (since the final premium charged for thepolicy may be different)

-Name of the insurer writing the risk

-Time and date that the binder coverage expires (Some brokers use the phrase "untilreplaced by policy documents" in place of an exact expiry date, however, this phrasecan be problematic)

-Name, address, and signature of the issuing broker

What does contra proferentem mean?

means "against the offeror."Any ambiguity in wording will be construed in favour of the insured.

Give examples of policy wordings that are legislated and examples of those that are not

Automobile Insurance -Automobile policy wordings are subject to a standard form legislated by statute orregulation in the various provinces and territories. In common law provinces, automobile policies are subject to Statutory Conditions. In Quebec, automobile policies are subject to the General Conditions.

Property Insurance- Property insurance policy wordings differ from insurer to insurer. Provincial statutes state the minimum coverage that fire policies must include —perils of fire, lightning, and limited explosion—but do not specify the exact wordingsof policies. Provincial legislation can also specify information that must be included in the policywording. If there is any clause in the policy that limits the amount an insured may recover,such as, a deductible, co-insurance, or distribution clause, the phrase "This policycontains a clause that may limit the amount payable." must be stamped or printed onthe face of the policy.

Casualty Coverages: Liability, Crime

Neither liability coverage nor crime coverage is governed by Statutory Conditions. The wordings for these coverages can vary from insurer to insurer.

What is in the policy declarations?

names of the insured and the insurer;

effective and expiry dates;

names and addresses of any loss payees and mortgagees;

total premium; and

amount insured.

What is the function of the insuring agreements?

Explains what is covered and for how much

What is included in the insuring agreements?

Shows the coverage's applicable; term of the policy; perils covered; exclusions (which restrict the perils insured); and circumstances under which the insured will receive payment of the proceeds of a claim.

Explain the policy conditions

policy conditions affect the actions of the insured or insurer under the contract under certain circumstances. If a condition is breached by the insured, the policy may be void or voidable, or a claim arising out of the breach may be denied by the insurer, depending upon the condition involved.

define void

the policy is treated as if it never existed

define voidable

means that the policy can be affirmed or rejected at the option of the aggrieved party- effectively, the insurer (if the aggrieved party) has the discretion to either pay or deny any claims

What are warranties

promises the insured makes as part of the contract that a specified state of affairs will continue to exist for the duration of the policy. They are obligations which the insured must fulfill in order to keep the policy in force. A failure to satisfy a warranty could result in the insurer not paying a claim

What is the difference between a warranty and a condition?

A true condition may be recognized by the fact that the clause says, in effect, if the insured does or does not do such and such, the insurer will not pay or the policy will be voidable. A warranty is a promise by the insured to do something or to maintain something in a particular condition.

what is a deductible?

The amount of a loss that the insured must pay.

How can a deductible be used to the advantage of an insured?

Larger deductibles can be selected as a method of reducing premiums.

What are some underwriting considerations of a personal lines risk?



-age of building


-maintenance and housekeeping


-nearby risk exposures

Why is the location of the risk significant?

Underwriters want to know the risk's proximity to fire protection (fire hydrant, fire halletc.).

What effect does building construction have on an underwriters decisions?

-The type of construction materials used in the building affects how susceptible it is toloss.

-There are separate rating classifications for frame, brick veneer, masonry, or fireresistive construction.

-The more fire resistive the construction, the less likely it will suffer a fire loss,therefore, the lower the premiums will be.

-The roofing materials are rated separately.

-the more fire resistant the building, the less likely it is to be involved in a fire, so the lower the premiums charged.

Why would the age of a building be an underwriting issue?

-The method and the materials used to construct a building are directly related to abuilding's age.

-Newer buildings conform to newer (stricter) fire codes.

-Historic buildings are a specialized insurance risk

-Materials for rebuilding historic buildings may be difficult to obtain, and the repaircosts higher than those to replace a normal (non-historic) building, thus, insurancefor them ay carry a higher premium.

-Since the value of historic buildings is difficult to determine, they should beappraised by an independent professional.

-Building services include electrical, heating, and water systems, and insurers willwant to know details about them including any updates to them.

-Some insurers require all services to be updated every 30 years, others only requiresome updates to services and proper overall maintenance to the rest.

What are the common types of personal lines dwelling occupancy?

-owner occupied principal residence

-seasonal dwelling or cottage

-rented dwelling


What are condominiums?

A form of home ownership that allows the purchaser to buy the home without having to buy the building.

What are housing cooperatives?

A form of home ownership which can be similar to condominiums, though not as common. Members of equity cooperatives own the building collectively and each member of the cooperative owns a share or shares in the cooperative and is granted a lease of his unit.

Non equity, non profit cooperatives own the building collectively. In the most common form of cooperative, the member is not required to make any monetary outlay except for a monthly housing charge. Certain cooperatives may be organized differently and actually permit ownership of the unit.

What are some of the underwriting criteria for cottages?

-Is it a year-round dwelling or luxury dwelling intended to be a retirementhome?

-What is the age, construction, heating system, and general condition of thecottage? -It is one building or many?

-How often is the cottage used and what time of the year is it used? (i.e. is itwinterized?) -How accessible is it throughout the seasons? -What municipal fire protection is available?

-Are there any year round neighbors with access to the cottage?

-Is there aneighborhood watch?

How are cottage outbuildings covered by the policy?

Limits for the outbuildings are including in the limit for the main building

What are the unique characteristics of a rented dwelling?

-The market for small residential rental businesses can be quite restrictive.

-Query your client's leasing conditions.

-The number of tenants is an underwriting and rating factor.

-Larger rental properties (risks with more than four to six rental units) aregenerally insured as commercial risks.

-Clients with a home business have exposures beyond the scope of a typicalhomeowner and may require separate insurance.

What is meant by the terms vacant and unoccupied?

- Premises are unoccupied when the building contains contents but no one lives orworks in it. Some insurers extend coverage if notified of the vacancy.

-Premises are vacant is when they contain no belongings, no one lives or works inthem and the insured does not plan to return to them.

What factors would you consider when reviewing the insurance for a dwelling under construction?

-Premises that are under construction have similar considerations to vacantpremises.

-If a new building is being constructed, it may require a builder's risk form or course of constructionform.

-If an existing building is being renovated, the insurer mayagree to endorse the existing policy to give permission for renovations or repairs.

-If your client advises you she is renovating, determine the extent of the renovations— buildings altered one part at a time can create concreted spaces; buildingscompletely gutted essentially become a new building with an old facade.

What are adjoining or adjacent exposures?

Properties that are attached or in close proximity to your clients premises represent a potential increased risk of loss to your clients premises. If the building next door is a chemical research plant or a dynamite manufacturer the business is exposing your client's premises to additional risk.

What are some issues that might create a problem when a client is renovating?

If renovations alter one part at a time, or are mostly cosmetic, the alterations can create concealed spaces, which increases the risk of a fire starting unnoticeably and spreading quickly.

What additional fire or burglary protection might a commercial risk have?

-sprinkler systems

-security guards/watchmen

-central station burglary alarm protection

What are your goals in placing insurance coverage for a new client?

Provide the insured with better coverage than he or she had previously or, at least, no less comprehensive than his or her expiring policy.

What are some discounts that may be available to clients?

Some insurers offer preferred rates or premium discounts to a particular target group or groups of personal lines clients, such as discounts for mortgage-free homeowners, certain age groups, or non smokers. Other insurers offer discounts to clients who have multiple policies or lines of coverage with them or are loyal customers who have maintained their insurance with the same insurer for a number of years. Discounts may also be offered to clients who have extra security systems, such as alarm systems or watchman services, particularly for commercial insurance clients. Loss history is another factor that will affect any discounts offered.

What does a tenants package cover?

Contents coverage only
Define Loss Assessment

Covers the unit owners share of the damge to common elements of the condo building
Define Contingent Insurance

Covers loss arasing from any deficiency in the condo's coverage policy
If tenants are solely occupying the home of an insured. The homeowner has what type of personal lines package?
rented dwelling
Does a personal articles floater cover items such as stamp collections?
Stamp collections are covered under a personal articles floater
What are the three main packages available for personal lines?
Basic, Broad & Comprehensive
What are the three most common personal lines dwelling risks?

-owner occupied principal residence

-seasonal dwelling or cottage

-rented dwelling

Under most personal lines policies, damaged or stolen property is settled on the basis of what?

Replacement cost
A fire policy covers losses arising out of what?

Fire, lighning, and explosion of coal, natural or manufactured gas
Define Libel

Defamation or injury of a person reputation by a published writing
Define Slander

Verbal defamation or injury of a persons reputation
What are the three ways liability policies are written?

Occurrence basis- most common form of liability wordings

Claims-made basis- cause of loss must not be excluded

Accident basis- covers bodily injury or property damage which was unitended or unexpected

What are the differences between the three home owners package forms?

-The Homeowner's Basic Form (IBC 1151) provides coverage for named perilsincluding theft, glass breakage, and transportation.

- The Homeowner's Broad Form (IBC 1153) provides coverage for all risks on thedwelling building and detached private structures and named perils on the personalproperty

-The Homeowner's Comprehensive Form (IBC 1155) provides all risks on all items,subject to policy exclusions.

All homeowner's package policies insure the dwelling building, detached privatestructures, contents, and additional living expenses.

What is guaranteed replacement cost?

Insurers will pay the full cost of rebuilding even if this were to exceed the amount of insurance purchased provided the

-amount of insurance was 100% of the replacement cost at last valuation

-insured notified the insurer within 90 days of the start of work on any improvement, extension, or addition

-increased costs were not due to the operation of a by-law

How is the replacement cost insurance value established for a building?

Insurance valuation is concerned with the actual costs to repair or replace thestructure with one of like kind and quality on the current site. A number of different valuation guides are available that may be helpful whendetermining replacement costs. -Obtain appraisals

What course of action could you recommend if the client does not agree with the valuation?

Client can determine if the standard limit offered on the policy is enough toadequately protect him or her by completing an inventory of his or her possessions

How could you determine the value of the clients contents?

The limit of contents coverage under a homeowners form is usually a predetermined percentage of the building limit, some companies will allow the insured to increase this amount if it is not adequate. An inventory can be completed to determine an adequate limit.

How does a tenants package differ from a homeowners form?

-All homeowner's package policies insure the dwelling building, detached privatestructures, contents, and additional living expenses.

The Homeowner's Basic Form (IBC 1151) provides coverage for named perilsincluding theft, glass breakage, and transportation.

The Homeowner's Broad Form (IBC 1153) provides coverage for all risks on thedwelling building and detached private structures and named perils on the personalproperty

The Homeowner's Comprehensive Form (IBC 1155) provides all risks on all items,subject to policy exclusions.

Tenants package policies are for insureds who rent houses or apartments. They are similar to homeowners policies except that the do not cover the building(except for limited coverage for theft damage). These policies cover the insured's contents and leasehold improvements. The insured determines the amount of insurance coverage for his contents.

There are two forms: -basic—which is a named perils form -comprehensive—which is an all risks form

What unique coverage is provided by a condominium unit owners package policy?

contingent insurance—covers loss to the insured own unite arising fromany deficiency in the condominium corporations policy

loss assessment insurance—covers the unit owner's share of anassessment for damages to the common elements of the condominium.

What are mobile homes and what are some unique underwriting considerations applicable to them?

A broad definition of a mobile home is one factory-built on its own chassis. With mobile homes, items that are considered contents in a normal home-such as appliances- can by considered part of the building. Because these fixtures tend to be built in, damage to them can lead to structural damage as well; this means that what might be a minor loss to a conventional home could be a major loss to a mobile home. Also, because of the high rate of depreciation of mobile home, replacement cost is not usually available for the building, though it might be available for the contents

Why would someone require a personal articles floater?

Items such as jewellery, fine arts, furs, coin and stamp collections are generally restricted under the homeowners, condo and tenants policies, the personal articles floater provides coverage, subject to exclusions for these items.

Whats valued insurance on the personal articles floater?

Requires client to provide copies of appraisals or valuations for items insured. Some insurers will provide insurance on a valued basis, so that in the event of a claim, the value of an item agreed upon will be paid by the insurer.

How can a collection of valuable items be insured?

There are two ways to insure property that forms part of a collection, Blanket basis with a single limit of insurance or separate limits for each item.

When a blanket limit is provided insurer may limit is exposure to loss from any one item.

Name some of the perils and property excluded under a personal articles floater

loss or damage caused by:

wear and tear

birds or vermin

nuclear incident


intentional or criminal acts by the insured

electrical currents, other than lightning, which damage electrical devices or appliances.

What is the coverage and the limitations to coverage provided y the outboard motor and boat policy?

This coverage provides physical damage coverage to boats and motors.

- It can include limited cover for the insured's liability for property damage arising fromcollision while afloat.

-It does not cover bodily injury.

-While wordings vary, there are some common exclusions: Damage to the boat when it is used for a purpose other than private pleasure, Damage to the boat while it is being refinished, renovated, or repaired, Damage to the boat when racing it

What geographical restrictions are generally found in yacht policies?

There are two restrictions:

-The navigation warranty governs the use of the boat beyond the specifiedarea

-The lay up warranty governs the use of the boat when it is supposed to belaid up

What form of crime coverage is generally provided to a seasonal dwelling?

Burglary is the unlawful removal of property from premises with visible signsof forcible entry (or exit).

What additional coverage would you recommend to the owner of a rented dwelling?

-business interruption

Why were specific wordings developed for farms?

Because of unique exposures of farms as dwellings and businesses at one location, insurers developed a specific series of wordings to provide the required coverage in one policy.

Consider some of the differences in insuring retail, office and contractors risks.

retail-a typical retail store could include insurance for COED, BI, crime exposures, CGL, and glass, also could include building, boiler and machinery, accounts receivable

Office- Could include COED, EDP, software and hardware, valuable paper, accounts receivable, extra expense, money and CGL

Contractors- Due to the wide range of work a contractor may specialize in, the information required by an underwriter and the coverage offered can vary, they may require COED, accounts receivable, valuable papers, tools and equipment, transit, installation floater or builders risk, CGL

What does a statute do?

Covers a new area of law, or it consolidates and codifies existing practices.

An offsite house cleaning service is an example of which type of exposure?


Define criminal law and civil law

civil law- courts determine fault and compensation

criminal law- courts determine guilt and punishment

Some provinces have replaced the Common Law duties care to a trespasser, licensee, and invitee with a statutory duty called the?

occupier's liability act

There are many characteristics of a home business that will affect liability exposures and premiums. Name some.

the number of employees, type of product or service, the size of the business

What are the three categories of persons entering property?

trespasser, licensee and invitee

When arranging liability for commercial exposures it is wise for the broker to ask questions, what are standard questions that should be asked?

location of the business, condition, maintenance and construction of the physical premises, loss history for a minimum of 5 years

Define punitive or exemplary damage

a punishment of the wrongdoer

What are special damages?

Items such as out of pocket expenses

Define damages

Asum of money claimed or awarded as compensation for loss or injury.

Define compensatory damages

To compensate the third party for injury sustained because of the actions of the defendant

Define general damges

Compensation for such things as pain or suffering

Means "the thing speaks for itself"

res ipsa loquiter

What are the four types of Personal Liability policies as described in the text?

Personal Acts, Premises, Tenant's legal liability, Employer's liability

Civil Law may impose liability because of?

negligence, nuisance and breach of contract

Why would someone purchase liability insurance?

- Legal liability refers to responsibility assessed against a person for injury or propertydamage to another person as a result of the law being applied.

-A person can be held liable actions or inactions that cause harm to others ordamage to property of others.

-Under certain circumstances, people can be held liable for the acts and omissions ofothers (such as their minor children).

-Liability being assessed against a person, can have serious financial consequences:all of a person's financial assets could be at risk.

-The costs to defend a liability lawsuit can be devastating (even if the person is foundnot liable).

-Liability insurance covers something abstract — the possibility that an insured will besued for loss or injury to a third party, whether or not the insured is actuallyresponsible for the loss.

-Liability insurance protects a person found legally liable for the compensatorydamages incurred to an injured party and for the costs to defend against lawsuits,regardless of whether the lawsuits have merit.

-Thus, liability insurance protects an insured against lawsuits in two ways: -For the costs of defending an action -For the costs of settle the claim with the third party

Explain the difference between the civil code of Quebec and the common law system

-The Civil Code of Quebec covers matters that might give rise to a dispute andcodifies them into a series of articles. The court's role is to settle disputes according to the Civil Code. If a specific dispute is not detailed in the Civil Code, courts will apply the generalprinciples of justice set out in the Civil Code.

-The common law applies in all other jurisdictions. General principles developed through successive judicial decisions over many yearsform the basis of common law. It is the law of precedent — judgments of current cases are based on, and guidedby, judgments made in prior, similar cases. Legal principles change over time as new cases are heard and social values evolve. The common law is a mixture of case law and statute law.

What is statute law?

-Statutes are laws passed in written form by governments.

-A statue covers a new area of law or consolidates and codifies existing practice.

- In common law jurisdictions, statute laws supersede case law if there is a conflict.

-in Quebec, a statute replaces or amends the Civil Code, unless the statutespecifically states otherwise.

What is negligence?

the omission to do something that a prudent and reasonable person wouldnot do or doing something that a prudent and reasonable person would not do.

what is tort?

a wrongful act

What is nuisance?

This is the substantial and unreasonable interference with a person's right to enjoyand use his or her property. Legal actions of this type are relatively rare.

How does liability insurance respond to breach of contract?

A breach of contract occurs when one of the parties to a contract fails to fulfill one or more of its obligations under the contract. Liability insurance usually has only limited application to breach of contract. A breach that is often covered under a liability policy concerns a clients responsibilities for bodily injury or property damage as the occupier of premises. Since insurable exposures arising from breach of contract are most likely related to lease agreements, or sales and supplier agreements, a review of these documents is advisable.

What duty of care does a property owner or occupier have towards children?

-The duty of care owed to children is higher than to other persons, premises must bekept safe for children, even if they are trespassing. -Occupiers must take care to make potentially dangerous sites not accessible tochildren. Sites which by their vary nature draw children to investigate them—such asconstruction sites or pools — are considered an attractive nuisance or allurement.They may be subject to special legislation, such as municipal bylaws requiring poolsto be fenced and have a gate to restrict access to them.

What is an attractive nuisance?

A place or thing, such as a construction site, that draws children to investigate it or play with it by its very nature

What liability do animals owners have for their animals?

- In most provinces, liability arising out of owning an animal is defined in legislation.

-Usually, an animal's owner is responsible for the supervision and actions of theanimal and can be held liable if unable of disinclined to properly control the animal.

-The owner could be liable for injury or property damage caused by the animal.

-Guard dogs are a significant liability exposure—the owner could be liable if the dogscause injury to visitors, even thieves entering the property illegally.

What is strict liability?

Some exposures are subject to a higher standard of liability called strict liability

ex- ownership of dangerous things

What is vicarious liability?

When employers are liable for the actions of persons employed by them

What characteristics of a home business might affect liability exposures and premiums?

-the number of employees; whether customers/suppliers/contractors visit the home; the operations or activities related to the business that occur off thepremises; the size of the business; and the type of product or service provided by the business

What liability exposures are usual to a farm?

Due to nature of a farm as home and business both types of exposures areconsidered together. Exposures that you will investigate will be similar to those for either personal orcommercial liability coverage.

What are typical commercial liability exposures?

premises and operation, off premise, products liability, completed ops

What are typical considerations when describing premises to be insured under a liability policy?

-Personal lines and commercial liability exposures arise from the property theyoccupy.

-Underwriters consider the same details for property risks as well as details ofexposures arising from what is being done on the premises.

-Business owners have a duty of care to the individuals entering the premises.

- An inspection of the premises may help a broker discover exposures, and thenprovide the opportunity to give the insured loss prevention assistance.

-Operations include what is done both on the insured premises and away from thepremises.

What is products liability?

Exposure could arise from bodily injury or property damage caused by the goods that your clients make or sell. To be held liable for injury or damage arising out of the product, the client need not be the manufacturer of the goods-they could be the distributor, wholesaler or any other part of the chain of production

How could an insured be subject to a completed operations exposure?

If your client is a contractor, his product is the work he does. Once he has completed the job, he has exposure to liability arising out of that completed work. ex. if a contractor installs cabinets and they were later to fall off the wall and cause injury or damage to any third party, this would be a completed ops claim. Note that damage to the cabinets themselves is not covered under the CGL policy

In Quebec, Article 1466 of the Civil Code places responsibility and onus of proof on the owner and the person making use of the?
What are the parts of a claims department?
Claims manager or claims superintendent, claims examiner, telephone adjuster
When addressing client concerns and expectations in regards to claims handling, what should you do?
give timelines, avoid giving legal opnions, reiterate policy specifics
Define subrogation
transfers the insured's right of action against the party responsible for the loss or damage to the insurer, and the insurer requires the third party to pay for the damage.
In the event of a loss what are the insureds responsibilities?
report loss promptly, mitigate loss from further damage, obtain estimates when requested

Reporting a loss by legal notice is called what?

A writ
What is an ombudsman?

In some jurisdictions they are employed by the insurer or by the insurance regulator, is available to answer insurance queries, or to help resolve claims complaints.
Define prescription

In law, means the time after which a cause of action ceases
Define Estoppel

Actions or lack there which may cause one party to draw certain logical conclusions
Define waiver

The voluntary relinquishment of a known right
Define endorsement

an amendment to a policy that changes the terms and conditions
What are the three ways a policy can be cancelled?

flat, pro rata, short rate
How far in advance should the broker advise an insured if they do not wish to renew the policy?

30 days
What is the process of change the client to a different insurer called?

When are finance company plans used?
For Commercial accounts or high valued personal lines policies
What is a portfolio transfer?

When an entire book of business is transfered from one insurer to another
What does the limit of amount paid for loss endorsement do?

Makes it possible to insure a vehicle for less than it is appraised valued
What does the waiver of depreciation endorsement do?
Insurer agrees to repair the vehicle as if it was brand new
What does the agreed value automobile endorsement do?

Allows the insured to obtain replacement cost coverage on his vehicle

What does the suspension of coverage endorsement do?

Temporarily removes third party liability and collision cover
In general, who has the worst driving record?

Males, under the age of 25
What is the plan de repartition des risques (PRR)

A type of risk sharing plan
Define financial responsibility
The ability to pay for any damage incurred as a result of the driver's actions or inactions
What is all perils coverage?

A combination of collision or upset, specified perils and comprehensive
What is a lienholder?

Someone who has claim on the legal title of the vehicle as security
What does the family protection endorsement do?
Provides coverage when the third party is underinsured to cover for bodily injury
In regards to legal systems in insurance. Canada operates under what type of system?
Tort and No-Fault
What three provinces have government automobile insurance plans?
Saskatchewan, Manitoba, and British Colombia
An MVR is an essential underwriting tool. MVR as described in the text means:
Motor Vehicle Record
Who started the initiative to track the VIN on salvage vehicles since the terrorist's attack of September 11, 2001?

Some of the factors that affect premium (with respect to auto coverage) are?
driver exeperience, driving location, driving location, vehicle use
Most insurers now use the CLEAR system to rate their vehicles. CLEAR stands for ?
Canadian Loss Experience Automobile Rating

What coverage is provided by the insuring agreements of a liability policy?

Under a liability policy, the insurer agrees to pay those sums that the insured becomeslegally obligated to pay as compensatory damages because of bodily injury or propertydamage to a third party.

When would an insured require tenants legal liability coverage?

This coverage protects against damage caused by fire, explosion, water escape (asdefined), or smoke to premises or contents that the insured does not own but isusing or has in his care, custody, or control.

What types of voluntary payments are insured under a personal liability policy?

The policy will reimburse the insured to a limited extent for voluntary payments madeto injured third parties where the insured is not legally liable but feels morallyobligated to pay for the damage.

Voluntary medical payments — reimburse the insured for expenses paid by or to injuredthird parties for surgical, medical, dental, hospital, nursing, ambulance, and funeral costs.The insured must provide written proof and medical documentation.

Voluntary damage to property — covers unintentional direct damage to third partyproperty caused by the insured and intentional direct damage caused by anyone included asan insured under the age of 12.

Voluntary compensation for residence employees — compensates residence employeesfor loss of life, limb, sight, or hearing; provides a weekly indemnity for disability; and coversmedical expenses to employees injured during the course of their employment.

What is covered by a commercial general liability policy

Third party liability coverage for bodily injury or property damage arising out of theinsured'so business premises; operations; products (made by the business); and completed operations.

Defence, settlement, and supplementary payment agreements

Personal injury coverage

Tenants legal liability coverage

Medical payments coverage

How might the named insured on a commercial policy differ from one on a personal policy?

The named insured on a CGL policy differs from a personal liability policy becauseof the nature of a business entity.

- If the business is a person, it includes the named insured and his or her spouse.

-If the business is a partnership/joint venture, it includes the members, partners, andtheir spouses.

-If the business is a company, it includes the executive officers, directors, andstockholders.

-In all cases, coverage is only provided with respect to business duties.

When would a client purchase non-owned automobile insurance?

Provides coverage for legal liability insurance for an employer whose employees or contractors use vehicles not owned by the business for business related activities. Ex. pizza delivery

Why would a client purchase an umbrella policy?

The main reason to buy umbrella liability insurance is to obtain higher limits ofcoverage and broader coverage at a reasonable cost.

What are some broader coverage's that might be provided by an umbrella policy?

Broader personal liability including premises, occurrences, sports mishaps,personal injuryo Watercraft liability , Non-owned aircraft, Employers' liability, Advertising liabilityo Rental cars

Explain what is meant by SIR in an umbrella policy

Umbrella coverage is usually subject to a self insured retention or net retained limit- sometimes in the range of $5000 to $25,000, although it can be as little as $500. The SIR is similar to a deductible in that it is deducted from any loss that is not insured by the underlying insurance policy.

What is the drop down feature of an umbrella policy?

If a claim exceeds the limit of the underlying policy the umbrella policy provides theexcess coverage up to its policy limit. The umbrella policy "drops down" when -the underlying policy does not provide specific cover; - limit of liability on the underlying policy is exhausted;

However, the "drop down" feature is not all inclusive;

Why would someone buy auto insurance?

All provinces and territories have legislation requiring automobile owners (with certain exceptions) to carry insurance.

Financing companies require vehicles purchased using their financing to be insured.

Leasing companies require vehicles leased from them to be insured.

Drivers are required by law to be financially responsible for any accident they cause.

Define Financial responsibility

the ability to pay for any damage incurred as a result of the driver's actions or inactions.

What are other reasons to insure your automobile?

To protect their investment

To protect against injuries or damages caused by another person

How can brokers distinguish their services from others?

product knowledge-

Through your knowledge of insurance policies, assist the clients in assessing their specific risks and assist them in selecting insurance coverage to protect them. Do not advise on limits of coverage to buy

market knowledge-knowledge of insurers underwriting criteria enables you to match your client with an appropriate insurance carrier

customer services- spend time with clients, answer questions, suggest alternative coverages

peace of mind- inspire trust in your client by providing knowledable and professional advise

What can be used as a proof of automobile insurance?

A pink card, also known as a liability certificate, serves as proof of insurance

What is show on a liability certificate?

Name and address of insurer

Name and address of the insured

Agency/brokerage name or number

Description of the insured vehicle

Policy number

Effective date and expiry date of the policy

Vehicle license plate number

What are the penalties for driving without automobile insurance?


Demerit points

Loss of driving privileges


What are some disadvantages to driving without insurance?

Driver or passenger who is injured in an accident cannot collect income replacement or non-earner benefits

Automobile owner cannot collect damages in a no-fault jurisdiction

Being personally liable for all damages incurred as an at fault uninsured motorist— this could include being sued

Which provinces have government insurance plans that provide auto insurance?

B.C. Manitoba, Saskatchewan, and Quebec

Whate are the government plans for automobile insurance?

In B.C., the government insurer known as the Insurance Corporation of British Columbia (ICBC) must provide compulsory coverage to all persons

In Saskatchewan and Manitoba, the provincial insurers—Saskatchewan Government Insurance (SGI) and Manitoba Public Insurance (MPI)—are required to provide basic compulsory insurance to all provincial residents driving registered vehicles governed by the automobile insurance acts.



Quebec's automobile insurance plan is a combination plan, with some compulsory coverage provided by the government insurer and some provided by private insurers.

Insurers can transfer non-standard risks into a shared pool known as the Plan de Repartition des Risques (PRR) or Risk Sharing Plan.

When a risk is transferred to PRR the rates are still set by the insurer, although a premium surcharge might be applied in certain cases.

What is the facility association?

In provinces where the government does not provide basic coverage, legislation has been passed to ensure a market is available to all insureds (including non-standard risks).

The Facility Association is a pool that provides insurance for licensed drivers who are less desirable from an underwriter's point of view because their risks are more hazardous.

When underwriting auto risks, what does an underwriter need to consider?





Use of the vehicle


Loss history

Broker's knowledge of the client

What information is required to insurance a vehicle?

the make, model, body type, year, and vehicle identification number (VIN) or serial number.

The probability of an auto loss is directly related to what?

The use of the vehicle(s).

The conditions under which it is used and frequency it is on the road increase the likelihood of its being involved in an accident.

Confirm if the vehicle is used for


driving to and from work (if so, how far it is to the client's workplace); or


What does the owners policy prohibit vehicles being used for?

compensation for hire
Insurers determine premium rates for auto policies through statistics. What are the the statistics?

age, gender, marital status, and driving experiences are all factors that can predict potential for loss.

What information should a broker obtain when submitting a request for insurance?





use of vehicles

the drivers

licensing and training


loss history

lapsed coverage and reason

What are potential reasons for lapsing?

Client sold her car without replacing it with a new one

Client moved temporarily out of the country

Client used a company car and so had no need to own a vehicle

Who controls the wordings of automobile policies and endorsements?

The wording of automobile policies and endorsements is controlled by provincialgovernments, and a government regulator in each jurisdiction approves the wording.

each jurisdiction has its own wording

In common law jurisdictions, policies contain statutory or mandatory conditions thatare quoted verbatim from the insurance act.

In Quebec, policies are subject to similar conditions known as general conditions,but they do not have to be printed in the policy.

What do the statutory, mandatory and general conditions outline?

responsibilities for all parties tothe insurance contract (insurer and insured).

What is the chief cause of legal liability related to automobile insurance?


Explain a no fault system with respect to auto losses

Some provinces have adopted no-fault rules, where claimants are reimbursed bytheir own insurer, regardless of who is at fault.

Under no-fault systems, the right to sue is eliminated or restricted.

Insurers still determine who is at fault in an accident — in order to apportionthe deductible and calculate future premiums.

Quebec, Ontario, New Brunswick, and Manitoba have no-fault schemes, butthey differ in how they are implemented.

What auto policy coverage's are compulsory?

Third party liability

Accident benefits

Uninsured automobile coverage

What is covered under third party liability (auto)

Covers bodily injury and property damage arising from the use, ownership, oroperation of a motor vehicle, subject to exclusions.

Coverage is extended to the named insured and any person using or operating theautomobile with the permission of the named insured. ("Operating" includes drivingthe vehicle and/or operating any part of the automobile, such as a door or window).

What is covered under accident benefits?

Accident benefits provide no-fault coverage for costs arising from bodily injury to thedriver and passengers.

They are compulsory in most provinces, but each province differs in how they areimplemented.

The coverage limits also vary among the provinces.

In provinces where the injured party's right to sue has been eliminated, the benefitstend to be more generous, since they are the only way the victim can becompensated for injuries suffered in an automobile accident.

What is covered under uninsured automobile coverage?

When an at-fault third party is unknown or uninsured, this coverage will compensatethe named insured or any passengers who suffer bodily injury.

The coverage varies from province to province.

Coverage takes effect if there is no known third party insurer or Highway Victim'sIndemnity Fund, or when the compensation provided by such a fund has beenexhausted.