Just another WordPress site

While OHIP will cover medically necessary emergency services in Newfoundland (making statement ‘a’ incorrect), its coverage is limited. OHIP does not cover transportation costs such as medical evacuation flights, air ambulance services, or the cost of returning a vehicle. These expenses are specifically what a private Travel Health Insurance policy is designed to cover. Therefore, the correct statement is that OHIP will not pay for her flight or for her car to be driven home.

The Voluntary Payment for Damage to Property coverage in a Tenant’s Comprehensive policy typically covers the insured for unintentional damage they cause to the property of others, even when the insured is not legally liable. Therefore, option B is the situation that applies. The other options involve rented or borrowed property, which may be excluded.

The Government of Canada uses a four-level system for travel advisories. Insurers typically only exclude coverage for travel to countries with the two highest-level warnings: Level 3 (“Avoid non-essential travel”) and Level 4 (“Avoid all travel”). A Level 2 advisory, “Exercise a high degree of caution,” warns of specific safety concerns but does not advise against travel. Therefore, traveling to a country with this advisory does not typically void travel insurance coverage.

OPCF #44 covers the difference between the at-fault driver’s insurance limits ($10,000) and the insured’s own liability limits ($1,000,000). The insured was awarded $180,000, so OPCF #44 pays $180,000 – $10,000 = $170,000

The correct and most appropriate action is to use a Suspension of Coverage Endorsement (in Ontario, this is the OPCF 16). This endorsement formally suspends the road-peril coverages (like Liability and Collision) while the vehicle is in storage, resulting in a significant premium reduction. It typically keeps comprehensive coverage active to protect against risks like fire or theft while stored. This is the industry-approved method that provides the proper protection and savings without creating a lapse in the policy term or leaving unnecessary coverages active.

When filling out the Ontario Application for Automobile Insurance (OAF 1), applicants are required to disclose the conviction history for all listed drivers for the preceding three years. While a longer period (e.g., six years) may be required for disclosing accidents, the standard look-back period for driving convictions is three years.

 The insurer agrees to reimburse the insured for medical costs incurred if the insured was at fault, as part of Third Party Liability coverage.

Uninsured Automobile coverage is not universally offered by all insurers in all provinces. While Quebec’s system (option A) is correct, the coverage varies by province, and option D is incorrect. Option C is partially true but not universally applicable.

In legal contexts, the burden of proof refers to the obligation to prove one’s assertion. Generally, the burden of proof lies with the party who is making a claim. Therefore, option D is correct.

The two main components of an automobile insurance rate are **expense loading** (covering administrative and operational costs) and **pure premium** (the amount needed to cover expected claims). Profit, acquisition costs, and contingencies are typically factored into expense loading.

• Statement (a) is false: The condition to maintain heat during absence usually requires daily, not weekly, checks.
• Statement (b) is false: A key purpose of a condo unit owner policy is to cover improvements and betterments made by the unit owner, as the condo corporation’s policy only covers the original base unit.
• Statement (c) is true: This accurately describes the “Newly Acquired Property” clause in a Personal Articles Floater. It provides automatic, temporary coverage for new items of a type already insured, allowing the policyholder time to formally add them to the policy.

The statement that is incorrect is (b). A key feature of a Personal Articles Floater (or endorsement) is that coverage is typically provided without a deductible. This “first dollar” coverage is one of the main advantages of scheduling high-value items separately. The other statements are correct: the coverage is “all-risks,” it includes a clause for newly acquired property, and it is subject to the policy’s conditions.

The fundamental rule in auto insurance is that the insurance follows the car. When an owner gives someone permission to use their vehicle, the owner’s insurance policy becomes the primary coverage for any liability arising from its use. Even though Bill has his own insurance, the policy on the vehicle involved in the accident (your client’s policy) is responsible for paying the third-party injury claim.

The Ontario Automobile Policy (OAP 1) contains a provision for out-of-province accidents. This provision gives the insured the right to elect which benefits they will receive. They can choose to claim the benefits provided by Ontario’s Statutory Accident Benefits Schedule (SABS) or claim the no-fault benefits available in the jurisdiction where the accident happened (in this case, Quebec). The insured can choose whichever scheme is more advantageous for their situation.

Loss of Use coverage for theft expenses is contingent on the insured having **theft coverage** (e.g., under Specified Perils, All Perils, or Comprehensive). The reimbursement terms (options A, B) are subject to policy limits, and option D is unrelated to Loss of Use.

The Ontario Health Insurance Plan (O.H.I.P.) typically cancels coverage after an absence of 212 days (approximately 7 months). Coverage is not reinstated until 90 days after the traveler resumes residence in Ontario. Therefore, option A is correct.

Pure premium represents the portion of the premium specifically calculated to cover expected losses (excluding expenses or profit). It is based on historical loss data and actuarial projections.

Third Party Liability coverage includes legal costs and post-judgment interest, even if they exceed the policy limit. The other options involve exclusions (e.g., contamination, property in the insured’s control, radioactive damage) and are not covered.

Statutory Conditions are specific conditions that are required by provincial law (like the Insurance Act) to be included in certain types of insurance policies. In Canada, this applies to Automobile, Homeowner’s (as it includes Fire insurance), and Accident and Sickness policies. A Commercial General Liability (CGL) Policy is not a class of insurance for which Statutory Conditions are mandated by law. Therefore, its conditions are determined by the insurer and are known as Policy Conditions or Provisions.

Accident Benefits (also known as Statutory Accident Benefits Schedule or SABS) is the no-fault portion of the Ontario Automobile Policy (OAP 1). It provides benefits to anyone injured in an auto accident, regardless of fault, and includes coverage for rehabilitation, prosthetic devices, and income replacement. Uninsured Motorist Benefits (or Uninsured Automobile Coverage) is a separate and distinct section of the OAP 1. It protects the insured from bodily injury or property damage caused by an identified, at-fault driver who has no insurance, or an unidentified driver (in a hit-and-run). It is not considered part of the “Accident Benefits” schedule.

The statement that is false is (c). A standard Travel Health Insurance policy covers emergency medical and hospital expenses. It does not typically cover non-medical costs like changes in airfare. Coverage for additional travel expenses, such as a higher-cost ticket home after a medical emergency, falls under Trip Interruption Insurance. Since Louie only purchased a Travel Health policy, it would not reimburse him for the increased flight cost. Statements (a), (b), and (d) are all true.

In a Homeowners Comprehensive policy with Inflation Protection, the coverages for the dwelling, personal property, and additional living expenses are typically adjusted for inflation at the policy anniversary. However, liability coverage is not automatically increased by the inflation protection endorsement; it remains at the limit chosen by the insured unless specifically changed. Therefore, option C is the coverage that is not automatically increased.

A manuscript policy is custom-tailored for unique risks (e.g., large commercial clients) and does not rely on standard preprinted forms, allowing flexibility in terms and conditions.

Statement (d) is false. A primary function of an umbrella liability policy is to provide higher limits of liability over top of primary policies. The most common primary policies are Homeowner’s, Commercial General Liability, and Automobile policies (like the OAP 1). Providing excess liability coverage for auto-related claims is one of the main reasons people and businesses purchase umbrella policies.

Statement (c) is false. Supplementary Payments, which cover costs like the insurer’s legal defense fees, investigation costs, and interest on judgments, are paid in addition to the limit of liability. This is a critical feature of liability insurance. The insurer’s duty to defend the insured and the associated costs do not reduce the policy limit available to pay the third-party claimant.

An individual must register as an insurance broker if they provide risk management and loss prevention services for compensation on behalf of others. This activity falls under the definition of brokering, as it involves professional advice and services related to insurance and risk. The other options either describe exempt activities (e.g., reinsurance brokering) or informal recommendations that do not require registration.

Accident Benefits are no-fault and available in all provinces, providing coverage regardless of who caused the accident.

 In these provinces, basic coverage is provided by government insurers without issuing a traditional policy. Optional coverages may be purchased separately.

O.P.F. #6 protects employers when their employees use their own vehicles for business purposes, covering liability arising from such use.

This clause ensures the mortgagee (lender) retains coverage even if the insured violates policy terms, outlining the insurer’s obligations, mortgagee’s rights (e.g., claim payment), and mortgagee’s duties (e.g., reporting losses).

Personal risks are those that directly impact an individual’s life, health, or ability to earn an income. Premature death, the financial challenges of old age (longevity risk), and unemployment all fall into this category as they result in a loss of human capital or earning power. Owning a house, however, is a property risk. This type of risk involves financial loss resulting from the damage to or destruction of property.

Homeowner’s liability policies contain a general exclusion for any “business pursuits.” However, there is a specific exception to this exclusion for the small-scale, part-time business activities of an insured who is under 21 years of age (e.g., a teenager with a paper route, babysitting job, or lawn-mowing business). Because this activity is specifically carved out as an exception, it is not excluded from coverage. All other options are standard liability exclusions.

The Sue and Labour Clause in an insurance policy requires the insured to take reasonable steps to minimize or prevent further loss or damage to the insured property. In return, the insurer agrees to cover the costs incurred by the insured in taking these steps. Therefore, option C accurately describes the purpose of this clause.

Accident Benefits provide no-fault coverage, meaning benefits are paid to the insured regardless of who caused the accident.

Highway Victim Indemnity Funds act like insurers by providing the provincial minimum liability coverage to victims of uninsured or unidentified drivers. They do not cover underinsured claims (option A) and are not present in all provinces (option C). Funding mechanisms vary (option D)

Statement (d) is not a typical exclusion because it is far too broad. Travel policies have specific exclusions for pre-existing conditions, but they apply only if the condition was not medically stable for a defined period (e.g., 90 or 180 days) before the trip. They do not exclude all emergencies for someone with a pre-existing condition. For example, if a person has stable high blood pressure and breaks their leg on vacation, the broken leg (which is unrelated) would be covered. Options a, b, and c are all standard exclusions in a travel health insurance policy.

Inflation Protection typically adjusts Coverage A, C, and D based on inflation or replacement costs. Coverage E (liability) is a fixed amount and requires manual updates.

Statement (b) is true. It is standard for Commercial General Liability (CGL) policies to include a deductible that applies to property damage claims. This means the insured is responsible for the first portion of a loss, and the insurer pays the amount that exceeds the deductible.

• (a) is false: In a CGL policy, “Bodily Injury” refers to physical harm, while “Personal Injury” is a specific definition for offenses like libel, slander, and false arrest.
• (c) is false: Umbrella policies are known for having broader, often worldwide, territory limits than underlying policies.
• (d) is false: The policy limit is the maximum total amount paid per occurrence or in aggregate, regardless of the number of insureds involved.

Since the client signed a waiver releasing the landlord from liability, the insurer is obligated to pay for the loss but cannot subrogate (seek recovery) against the landlord. The waiver prevents the insurer from pursuing the landlord for reimbursement.

The principle of contribution is applied when two or more insurance policies cover the same property for the same peril. It dictates that the insurance companies will share the loss proportionally. Each insurer pays its share of the loss according to the proportion of coverage it provided. This prevents the insured from collecting in full from each insurer and thus profiting from a loss, which would violate the principle of indemnity.

• Coinsurance is a clause requiring the insured to carry a minimum amount of insurance.
• Subscription is a policy where multiple insurers cover a percentage of a single large risk.
• Actual Cash Value is a method for valuing a loss.

Actual Cash Value (ACV) is typically defined as the replacement cost minus depreciation. However, it is not necessarily the depreciated value shown in the balance sheet of a financial statement. The balance sheet may use different methods of depreciation and may not reflect the current market value. Therefore, statement A is incorrect.

An assessment mutual insurance company is a type of insurer owned by its policyholders. Unlike standard insurers that charge a fixed premium, an assessment mutual may charge a smaller initial premium. However, policyholders (members) agree to be assessed for additional funds if the company’s losses are greater than the premiums collected. This agreement is often formalized by having the member sign a premium note, which gives the insurer the authority to collect the additional funds when required.

Quebec has a hybrid system where basic coverage is provided by a government insurer (SAAQ), while private insurers offer additional coverage.

A standard Secondary Residence Policy does not include loss of rental income coverage unless specifically endorsed. Without this endorsement, no payment is made for lost rents.

Under Section 380(1)(a) of the Criminal Code of Canada, fraud where the value of the subject matter exceeds $5,000 is an indictable offense. The maximum penalty for this serious crime is imprisonment for a term not exceeding fourteen years.

The OPCF #6 is the “Permission to Carry Passengers for Compensation or Hire” endorsement.

• (a) is true: Since this endorsement increases the insurer’s risk, a premium is charged.
• (c) is true: This is the defined purpose of the endorsement.
• (d) is true: A formal driver training vehicle requires a different commercial or specific-use endorsement, not the OPCF #6.
• (b) is false: Insurance premiums are never “always the same.” They are calculated based on the specific risk details of the insured, such as the location, frequency of use, type of vehicle, etc. The premium for an OPCF #6 would vary from one policyholder to another.

Absolute Liability applies to Third Party Liability, meaning the insurer must pay for damages caused by the insured, regardless of fault.

This is the definition of an occurrence-based policy. The trigger for coverage under this type of policy is the date the injury or property damage occurred. As long as the incident happened during the policy period, the claim can be reported at any time in the future and will still be covered by the policy that was in effect at the time of the occurrence. A “claims-made” policy, by contrast, covers claims that are first made against the insured during the policy period.

If a material misrepresentation is made, the insurer can deny Income Replacement Benefits but must still pay Attendant Care and Death/Funeral Benefits.

Following a loss, the insured has several duties outlined in the Statutory Conditions of the auto policy. One of these key duties is to protect the automobile from further loss or damage. This is known as mitigating the loss (e.g., covering a broken window to prevent rain damage). While the policy will typically reimburse reasonable expenses incurred for this purpose, the initial duty to act falls on the insured.

• (a) and (c) are false because notice must be “prompt,” and the Proof of Loss form is due within 90 days.
• (d) is false because the insured cannot authorize repairs (beyond temporary ones to prevent further loss) without the insurer’s consent.

The Comprehensive Tenants Package typically excludes coverage for newly acquired farm premises under its liability section. This is because farm premises involve unique risks and liabilities that are not covered under a standard tenants package.

Proximate cause is the dominant, direct, or most efficient cause of a loss (e.g., a fire causing damage, not the earlier faulty wiring). It determines whether the loss is covered under the policy.

In a standard Homeowners Comprehensive policy, replacement cost coverage for the building is typically included as basic coverage, but replacement cost coverage for personal belongings (contents) usually requires an endorsement. Therefore, statement C, which says that replacement cost coverage for both building and personal belongings is basic coverage, is not true.

Specified Perils coverage typically includes losses during transport (e.g., rail derailment). Other options involve collision (A, C) or vandalism (D), which may fall under broader coverage (e.g., Comprehensive) but not basic Specified Perils.

Statement (a) is false. Business Income insurance (also called Business Interruption insurance) covers the loss of income resulting from direct physical damage to business property by an insured peril (like a fire). It does not cover income loss due to the illness of the owner or an employee. That type of risk is covered by a different kind of insurance, such as Disability Insurance or Key Person Life/Health Insurance.

The Voluntary Property Damage coverage under a Homeowners Comprehensive policy typically excludes damage to property that is rented to the insured. Therefore, if the damaged property is rented from a rent-all establishment, the coverage would not apply. Hence, option B is the correct exception.

The Excess Economic Loss Endorsement is not an available optional benefit under the O.A.P. 1 Owner’s Form. The other options (A, C, D) are valid optional benefits.

The contractual agreement between an insurer and a broker outlines the broker’s authority to act on the insurer’s behalf. This typically includes the authority to collect premiums, deduct commissions, and bind coverage. However, the requirement to be registered as an insurance broker is a legal and regulatory obligation imposed by a provincial governing body (e.g., RIBO in Ontario), not by the insurance company. Being registered is a prerequisite for entering into the contractual agreement in the first place

All statements are correct. The Ontario Motorist Protection Plan introduced thresholds for injury claims, and subsequent bills (164 and 59) modified the language and criteria for non-economic loss claims, shifting between “permanent” and “serious” injury thresholds.

Quebec has the lowest mandatory minimum Third Party Liability coverage limit ($50,000) compared to other provinces (e.g., Ontario and most others require $200,000).

When you pay an insurance premium, the insurer “earns” it over the course of the policy period. The portion of the premium that applies to the future, unexpired part of the policy term is called the “unearned premium.” Insurers are legally required to set this money aside in an unearned premium reserve. This reserve is a liability on the insurer’s books, representing the amount that would need to be refunded to policyholders if all policies were cancelled today. Its primary purpose is to ensure funds are available to repay policyholders their unearned premium if the insurance company becomes insolvent and can no longer provide coverage.

Statutory Conditions balance the rights and obligations of both the insured (first party) and insurer (second party), ensuring fairness in claims handling, policy cancellation, and other terms.

A Tenants Comprehensive policy covers the tenant’s personal property. Option A refers to damage to the exterior of the building, which is part of the building structure and not the tenant’s personal property. The tenant is not responsible for insuring the building structure. Therefore, option A is the exception.

A standard homeowner’s insurance policy is divided into two distinct sections:

• Section I – Property Coverages: This section covers direct physical loss or damage to your property. It includes coverage for the dwelling itself, detached private structures, personal property (contents), and additional living expenses.
• Section II – Liability Coverages: This section covers situations where you are held legally liable for bodily injury or property damage to others. It includes personal liability, voluntary medical payments, and voluntary payment for damage to property.

Under a Seasonal Dwelling form, the coverage for detached structures is typically a percentage (such as 10%) of the dwelling coverage, but this is the total limit for all detached structures. If one structure is destroyed, the payment is not the full 10% but a proportional amount based on the value of the destroyed structure relative to the total value of all detached structures. Therefore, option B is correct.

This scenario is handled by the Direct Compensation – Property Damage (DCPD) system, which is part of the standard auto policy in Ontario and other provinces. Under DCPD, if you are involved in an accident in which you are not at-fault, you claim for damage to your vehicle and its contents from your own insurance company.

Since your co-worker was not at fault for the accident, they will claim the damage to their car and its contents (the child seat) from their own insurer under the DCPD section of their own policy. Your liability coverage does not apply for this portion of the claim.

Insurers typically waive subrogation against permissive drivers (e.g., a neighbor with consent). Subrogation is not waived for breaches (B) or commercial entities (C, D), which may be held liable.

Due to inter-provincial reciprocal agreements under the Canada Health Act, a resident of one province is entitled to coverage for medically necessary emergency services in another. Therefore, OHIP (Ontario Health Insurance Plan) will cover the cost of Mary-Ann’s emergency and in-hospital services while she is in Newfoundland. The Newfoundland health system would bill OHIP for the services provided.

Section A3 of a Condominium Unit Owner policy specifically covers improvements/betterments (e.g., upgraded flooring) made by the owner, as these are not included in the master policy for the building structure.