Study 2 - Third Party Liability; Direct Compensation - Property Damage

Tort

A legal wrong arising from a duty fixed by law. A breach of this duty that causes injury to persons or property is repressible by legal action for damages. Liability for _____ involves a private or civil wrong or injury and is distinct from that under contract in that the duty is owed to people, generally, rather than to a specified individual.

Negligence

Failure to use the degree of care expected from a reasonable and prudent person.

Liability Insurance

Insurance that agrees to indemnify the insured for sums they may be required by law to pay to third parties as damages for bodily injury or property damage.

Onus of Proof

The burden or responsibility of proof, and is sometimes referred to by its Latin term, onus probandi.

Driver's Fault Chart

A set of accident scenarios to determine fault or liability between drivers involved in an accident and the compensation payable. It takes into account the Highway Traffic Code and case law.

Precedent

A legal decision that serves as a basis to resolve subsequent disputes in similar cases.

Direct Compensations

In the event of an accident, each Insured will obtain compensation from their insurer according to the insured's degree of fault for an accident (based on the extent the insured is not at fault).

Indemnify

To provide compensation for loss or expenses incurred.

Direct Compensation - Property Damage (DCPD)

Covers damage to, or the loss of use of, an automobile or its contents, to the extent that the driver of another vehicle was at fault for the accident. It's called __________ because, even though someone else caused the damage, the insured person collects directly from their insurer instead of from the person who caused the accident.

Legal Liability

Liability imposed on individuals or corporations to pay for harm done to others. Such law may be common law, statute law, or customs that over a period of time have taken on the same status as law. May also be assumed under the terms of a contract.

Bodily Injury

A term used in auto and liability policies meaning physical injury, sickness, disease, mental injury, shock or death.

Named Insured

The person or party designated in the policy as the insured, who has certain rights under the policy, as opposed to someone who may be covered by the policy but is not specifically named and does not have the same rights.

Additional Insured

A person other than the named insured who is protected by the terms of the policy. May be named or unnamed.

Minimum Limits

The smallest amount of third-party liability insurance that may be purchased in any Canadian jurisdiction.

Priorities of Payment

A system that specifies how much of the minimum policy limit will apply to bodily injury claims and how much will apply to property damage claims in situations where there is not enough insurance to cover all the combined claims.

Absolute Liability

Liability associated with very dangerous actions. Often found in cases involving explosives and in many automobile laws. Negligence does not have to be proven.

Statutory Conditions

Special prescribed and standardized conditions that the provincial and territorial insurance acts require to be included in insurance policies.

Own Damage

Damage to the insured's own vehicle.

Subrogation

Legal progress by which an insurance company, after the payment of loss, is assigned the rights of the insured to recover the amount of the loss from those who are legally liable for it.

Deductible

An agreed specified amount that the insured must pay on a claim before the insurance company will cover the rest of the claim. This amount is agreed upon by both the insured and the insurer.

No-Fault

Simply, it means paying certain claims without reference to who was at fault. Used to describe a system for improving the compensatory process for automobile accident victims by eliminating costly and lengthy litigation. An automobile insurance system where accident victims are compensated by their insurer regardless of fault.

Fault Determination Rules

Rules set out in automobile insurance legislation that are used by insurers to determine fault or responsibility for direct compensation - property damage claims, but not for injury claims.

Highway Traffic Act

Used in ON, PEI, NL OR NU

Motor Vehicle Act

Used in NS

Traffic Safety Act

Used in AB

$200,000

Minimum Liability Limit in Alberta

$200,000

Minimum Liability Limit in British Columbia

$500,000

Minimum Liability Limit in Manitoba

$200,000

Minimum Liability Limit in New Brunswick

$200,000

Minimum Liability Limit in Newfoundland and Labrador

$200,000

Minimum Liability Limit in the Territories

$500,000

Minimum Liability Limit in Nova Scotia

$200,000

Minimum Liability Limit in Ontario

$200,000

Minimum Liability Limit in Prince Edward Island

$50,000 accidents in Quebec and $500,000 applies to vehicles excluded from government plan and accidents outside Quebec

Minimum Liability Limit in Quebec

$200,000

Minimum Liability Limit in Saskatchewan

$190,000 BI $10,000 PD

Priority of Payment in Alberta

$180,000 BI $20,000 PD

Priority of Payment in BC

$450,000 BI $50,000 PD

Priority of Payment in Manitoba

$180,000 BI $20,000 PD

Priority of Payment in New Brunswick

$180,000 BI $20,000 PD

Priority of Payment in NL

$190,000 BI $10,000 PD

Priority of Payment in the Territories

$500,000 Inclusive

Priority of Payment in Nova Scotia

$190,000 BI $10,000 PD

Priority of Payment in Ontario

$190,000 BI $10,000 PD

Priority of Payment in PEI

$50,000 PD

Priority of Payment in Quebec (inside)

$450,000 BI $50,000 PD

Priority of Payment in Quebec (outside)

$190,000 BI $10,000 PD

Priority of Payment in Saskatchewan