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Showing posts with label Auto Insurance. Show all posts
Showing posts with label Auto Insurance. Show all posts
Tuesday, December 29, 2015
Automobile Policy Exclusions
The Superior Court of Justice has re-emphasized the requirement that an insurer must take appropriate steps to bring exclusions to the insured’s attention where the effect of an exclusion will have the harsh result of denying coverage under an automobile policy.
In GMAC Lease Co. Corp v. Lombard Insurance (2007), 87 O.R. (3d) 813, at paragraph 9, the Court of Appeal held that an insurer must provide the insured with a copy of every endorsement, per section 232(3) of the Insurance Act. The fact that an insurer can provide a certificate of insurance instead of the policy does not take away the duty imposed by section 232(3).
The obligation then is to provide the policy or certificate in an improved form as well as a copy of every endorsement. Since the insurer had failed to comply with section 232(3) of the Insurance Act by failing to deliver a copy of the OPCF 28A endorsement, excluded driver, the insurer cannot rely on the exclusion.
Justice Chapnick more recently in Chen Estate v. Chung, [2010] O.J. No. 5086 (SCJ), reiterated the Ontario Court of Appeal’s decision in GMAC Lease Co. Corp. v. Lombard Insurance.
Tuesday, November 3, 2015
Ontario Government Proposes New Auto Insurance Options
According to The Globe and Mail, the Ontario government is proposing to allow consumers to purchase less auto insurance coverage in order to keep down their auto insurance premiums.
Proposed changes include:
- lower the minimum medical and rehabilitation coverage for auto insurance to $50,000 from the current $100,000;
- adding a new deductible for property damage; and
- removing an insurer's right to an assessment from their own doctor if they disagree with the findings of the insurance company's health provider.
Friday, May 29, 2015
Credit card insurance coverage for rental cars
As usual, last time I rented a car, in Michigan, the rental car agent explained that I should purchase the exorbitantly priced property damage insurance because 1) Michigan is a fully no-fault state and 2) liability for damage to the car would include rental costs while the car was being repaired. Despite having posted on this very topic, I had no idea whether I would be fully covered by my insurance for property damage if I was in a collision.
Shortly after that I received a benefits guide from one of my credit cards and I took a close look at its rental insurance coverage. It covers vehicles rented for 31 days or less with a value of $50,000 or less. There is no coverage unless you decline the Collision/Damage waiver offered.
And, yes, it covers "reasonable loss-of-use charges imposed by the vehicle rental company for the period of time that the rental vehicle is out of service."
So next time I rent a car I'll refuse the property damage insurance with confidence--that is, if I can remember which credit card I should be using.
Friday, May 15, 2015
Downsides to not purchasing optional coverage on a motor vehicle policy
Under Massachusetts law people who own cars are required to have automobile insurance. The required or "compulsory" coverage includes $20,000 of coverage for "bodily injury to others."
I recommend that almost everyone purchase optional bodily injury coverage in addition to the compulsory coverage. There are several reasons for this:
1. As I discussed here with respect to general liability insurance, anyone can have an off day. If you space out or are distracted by your kids or simply miss a stop sign, you could seriously injury someone. Higher insurance limits will provide more money to the injured person, which could make all the difference to them. While everyone needs to evaluate their own financial circumstances in determining how much insurance they can afford, I firmly believe that ethics require those of us who drive to have higher than compulsory limits if we can afford them.
2. If you have appropriate insurance for your financial station in life the attorney for the injured person is likely not going to be interested in going after your personal assets. They will settle with the insurance company. But if you have inadequate insurance for your financial situation, the attorney is much more likely to encourage their client to insist that a settlement include contribution from your personal assets.
3. Compulsory insurance does not cover you if you are driving outside of Massachusetts. Optional bodily injury insurance, in any amount, will cover you in every state and Canada.
Thursday, April 30, 2015
Massachusetts passes legislation allowing appeals of auto insurance premium surcharges
For a while it looked as though the state insurance commission would take away the right of vehicle owners to appeal an insurer's decision to add a surcharge to their auto insurance. However, Governor Patrick has signed legislation reversing that decision.
Insurers may raise insurance rates if an insured has been at-fault in an accident.
The legislation amended Mass. Gen. Laws. ch. 175E § 1. It allows an insured who is aggrieved by a decision of the insurer with respect to a surcharge to file a written complaint with the Board of Appeals on Motor Vehcile Policies and Bonds within 30 days. Either side may appeal the decision to the Superior Court.
Saturday, April 25, 2015
Actions by Insured against Insurer – Limitation Period not always Certain
Shaver v. Co-operators General Insurance Co. [2011] AJ No. 1411
Mr. Shaver was injured in a three vehicle accident on July 14, 2000 with one other identified driver. The Motor Vehicle Accident Claims Fund accepted liability for the accident and consented to a partial judgement in Mr. Shaver’s favour for $100,000.00. This judgement was entered on January 19, 2010.
Mr. Shaver found this compensation to be inadequate and issued a claim against his insurer, the Co-operators, on July 29, 2010 based on the SEF 44 endorsement in his policy:
Every action...against the insurer...under this endorsement shall be commenced [within 2 years] from the date upon which the eligible claimant...knew or ought to have known that the quantum of the claims with respect to an insured person exceed the minimum limits for motor vehicle liability insurance in the jurisdiction in which the accident occurred.
The Co-operators brought a summary judgment motion in Alberta arguing that Mr. Shaver was out of time as more than 10 years had passed since the claim arose. Mr. Shaver argued that his claim against the Co-operators arose only on January 19, 2010.
The court held that the limitation period in this endorsement allowed an injured person to sue later than the ultimate 10 year statutory limitation period in cases where the insured learned of inadequate insurance or of total claims exceeding the insurance limits after the expiry of that limitation period. The Co-operators appealed this decision to the Alberta Court of Appeal.
The Alberta Court of Appeal upheld the lower court’s decision, citing the principle provided by the Alberta Court of Appeal in Wawanesa Mutual Insurance Co., [1994] AJ No. 126:
An insured’s claim against his own insurer arises not at the time of the accident, but when he knows, or should have known, that the tortfeasor’s coverage will be inadequate to cover the insured’s damages.
In the case at hand, both parties agreed that it was not until January 19, 2010 that Mr. Shaver knew that the torfeasor’s coverage would not be sufficient.
- Kristen Dearlove, Student-at-Law
Monday, March 16, 2015
Court rejects argument deductible does not apply to awards of exactly $100,000
Van Winckle v. Siodlowski, [2009] O.J. No. 4807 (S.C.J.).
In this motor vehicle accident case, the jury awarded the plaintiff exactly $100,000 in non-pecuniary general damages. The plaintiff made the creative argument that the deductible should not apply where the award is exactly $100,000. Section 267.5(8) provides the deductible does not apply where the amount of non-pecuniary general damages "would exceed $100,000".
The Court held that "exceed" means greater than, not greater than or equal to. The deductible applied.
The decision makes sense. If the legislative had meant "greater than or equal to" $100,000, it would have said so.
Monday, March 2, 2015
SJC rejects auto insurer's argument that different MAIP rules for large insurers than small insurers should be thrown out
I have been discussing Arbella Mut. Ins. Co. v. Comm'r of Ins., 456 Mass. 66 (2010), in which the Supreme Judicial Court addressed several issues relating to the Massachusetts Automobile Insurance Plan (MAIP), under which automobile insurers are required to issue policies to high-risk drivers.
Arbella challenged MAIP Rule 36, which regulates agreements called "limited assignment distribution agreements" or LADAs. A LADA is an agreement under which one insurer, called an "assigned risk company," or ARC, services, for a fee, all of the high-risk policies another insurer was assigned under MAIP.
Rule 36 sets out several requirements for LADAs. It states that insurers with less than five percent of the market share may assign their risks without approval from the insurance commissioner, and that insurers with more than five percent of the market share must obtain the commissioner's approval. It also states that only insurers with more than one percent of the market share may serve as ARCs.
Arbella argued that Rule 36 harms consumers because high-risk drivers whose policies are assigned under a LADA will face higher rates from the assignee insurer than they would from the assignor insurer, and that large insurers are unfairly treated differently than small insurers under the rule.
The court noted that policies issued to high-risk drivers often require a disproportionate degree of administrative attention from the companies that service them. Companies with less market share, and therefore fewer assigned high-risk drivers, may be less well-equipped to give policyholders that extra attention. The court stated that is the reason that Rule 36 allows companies with a market share of five percent or less to enter LADAs without first seeking the commissioner's permission.
The court stated that the requirement that only companies with at least one percent of market share may serve as ARCs ensures that ARCs will have the necessary resources to manage the high-risk policies. It also stated that the minimum market share requirement means that ARCs will have a competitive rate on their voluntary policies. Since insurers are required to charge the same rate for their assigned high-risk policies as for their voluntary policies, the rule ensures that the rates charged for high-risk policies are competitive.
The court held that Arbella lacks standing to object to the rule because the statute at issue was not intended to protect insurance companies, but consumers.
Friday, February 27, 2015
SJC upholds rule in which auto insurers are not assigned high risk drivers for their first two years in the Commonwealth
In my last post I wrote about Arbella Mut. Ins. Co. v. Comm'r of Ins., 456 Mass. 66 (2010), in which the Supreme Judicial Court addressed the interplay between auto insurers that have recently entered the Massachusetts market and the Massachusetts Automobile Insurance Plan (MAIP), under which high-risk drivers obtain automobile insurance issued by private insurers.
The background to this case is changes to auto insurance regulations a couple of years ago which resulted in many new insurance carriers entering the Massachusetts market.
The court addressed a challenge by Arbella, a long-standing insurer in Massachusetts, to MAIP Rule 30.A. That rule delays the assignment of high-risk drivers to companies new to Massachusetts for two years after they enter the Massachusetts market.
Arbella first argued that Rule 30.A exceeded the statutory authority given to the insurance commissioner, which requires allocation to be "fair and equitable."
The court rejected Arbella's argument. It noted that newly writing companies do participate in MAIP from the time they enter Massachusetts by paying assessments for the operating expenses of MAIP. It discussed the fact that in the past new insurers were allocated fewer high-risk policies than established insurers.
The court also rejected Arbella's argument that Rule 30.A permits newly writing companies to poach less-risky policies from established insurers without worrying that their increased market share would result in a proportional increase in their assignment of high-risk drivers. The court stated that Arbella had not demonstrated that the formula unbalances competition any more than the former rules did. It noted that the Commissioner stated that insurers face start-up costs when entering the Massachusetts market, so that the two year delay was a fair and equitable formula.