Alberta Auto Insurance Coverages SIMPLIFIED
Ok it seems that a lot of people would like to have a better understanding of their automobile insurance policies. My intent of this thread is to give you a basic understanding of coverages and then later get into some practical aspects to help with everyones understanding before its too late and they have a claim and were missing a coverage. This is for reference only and you should always seek professional advice regarding a specific situation. Also keep in mind There is a lot that needs to be added and the specific coverages is just a starting point. There are responsibilities both on your part and the insurance company that have a bearing on the entire process, these will be discussed later.
All insurance policies in Alberta are the same. They can vary slightly given different endorsement on the policy which either add or subtract certain coverages. I will touch base on some of the essential ones initially and I am sure some of the other insurance members can add to this later.
The Automobile insurance policy is split into 3 sections:
Third Party Liability (Section A)
Loss of or Damage to the Insured Automobile (Section C)
Accident Benefits (Section B)
You will notice that they are out of order and I am leaving B until the end. This is because Sections A and C are the most commonly accessed portions of the policy and where I feel the most controversy occurs. Both of these are coverages that apply to your vehicle in the case of damage.
Third Party Liability (Section A) (Some people refer to this as PLPD)
The minimum amount of coverage available is Alberta is $200,000 however it is rare to see anyone with this amount. $1,000,000 is the norm and it is not unusual to carry more.
This protects you from liability imposed by law for bodily injury, death of any person or property damage arising from the ownership, use or operation of the vehicle. This coverage applies not only to the policy holder but to anyone whom operates or uses any part of the automobile (with consent). This means your policy is on the line for not only yourself but anyone you allow to drive the vehicle, each and every passenger contained within that vehicle and any person using any part of the vehicle.
To put it simply, if you or someone else crashed the car into another car, a pedestrian or any piece of property your Section A is the portion of the policy that covers the injuries, death and damages. That part is simple, if your car causes damage it covers that damage. Now it gets interesting, passenger or any person using any part of the vehicle can cause damage which would fall under this section, even though they are not driving.
This can include a passenger grabbing a wheel causing an accident, opening a door and it getting hit by a cyclist, jacking the car up to change a wheel and it rolls down into the ditch and crushes a mailbox or child.
There are exclusions, the most important to know is this will not cover damage to property carried in the automobile, owned or rented by the insured, or in the care, custody or control of the insured.
This means that if you crash into your own other car, house or possessions or damage any property inside the car be it yours or not, you cannot expect this part of the policy to cover it (or any other part). If you’re hauling a TV for a friend and roll the truck there is no coverage under this policy.
One interesting thing to note is that there is no exclusion for being drunk. So lets say you run over a milkman and a bus stop while drunk the policy will respond up to the limit. But remember I am only talking about Section A right now, don't mix it up with the other parts, OK!.
Key thing to remember:
SECTION A COVERS DAMAGE OR INJURY TO OTHER PEOPLE AND/OR THEIR PROPERTY/VEHICLE CAUSED BY THE USE AND/OR OPERATION OF YOUR VEHICLE.
Loss of or Damage to the Insured Automobile (Section C)
Sections C is what people will describe as collision, fire & theft, comprehensive ect. fact is there are 4 different coverages available under Section C.
1. All Perils
2. Collision or Upset (we will refer to it as collision from here in)
3. Comprehensive
4. Specified Perils
Ok we're going to ignore "All Perils" and "Specified Perils" as they are not very common and *MOST* people have either collision, comprehensive or both.
Collision covers damage caused by collision with another object or upset. This includes the surface of the road. Basically if your vehicle hits anything or is hit by anything it should fall under collision(if you carry it).
Comprehensive is very simple now that we know what is considered a collision. Comprehensive protects the vehicle against any peril other than collision or upset. The policy specifically states missiles, falling or flying objects, fire, theft, explosion, earthquake, windstorm, hail, rising water, malicious mischief, riot or civil commotion shall be deemed comprehensive. Also please no that the term 'act of god' does not appear anywhere in this policy.
But what about hit and runs and deer hits you say? Under the policy they are both considered collision. However insurers can treat them as comprehensive if they want but are in no way obligated to. Its them being nice to you.
There are exclusions that apply to collision, comprehensive, all perils and specified perils. They are:
1.Damage to tires, rust or corrosion, wear and tear, freezing or explosion within the combustion chamber. UNLESS CAUSED BY FIRE, THEFT, OR MALICIOUS ACT.
2.Conversion or Voluntary parting with title. I'm not even getting into this.
3.Radioactive contamination. Be careful with your dirty bombs.
4.Contents. Will not cover your gym bag. However when the vehicle is equipped with a stereo it is covered along with its attached equipment. Read the MP3 player is covered if attached and if theres a CD in the unit that CD is covered. The other 100 are not.
5. Drunk or High. Okay remember this because its kind of important. If you're drunk/high and they can prove it (Read conviction of impaired driving or refusal to blow) you have absolutely no coverage on your vehicle of any kind. If they can't prove it you have coverage.
6. Letting someone else drive Drunk or High.
7.Comprehensive and Specified Perils excludes theft by any person living in your home or employed by you.
Further if you do have a loss that is covered under your policy the insurance company will cover towing and storage costs along with and Fire dept fees (if applicable)
Key thing to remember:
SECTION B COVERS DAMAGE TO YOUR OWN VEHICLE. USE YOUR HEAD WHEN DETERMINING IF IT SHOULD FALL UNDER COLLISION OR COMPREHENSIVE.
I am going to stop this here and do Section B Accident benefits later.
After that if I feel that the forum users want it I will get into what you are entitled to in an accident, whats the process should be in determining the value of your total loss and even why aftermarket parts may be used on your repair.
If anyone sees a mistaken, misinterpretation or omission please let me know and I can fix it up.
Here is the Alberta Standard Auto Policy S.P.F. 1
Thank to Xtrema
Originally posted by Xtrema
http://www.finance.alberta.ca/public...olicy_2007.pdf.Originally posted by Zewind
One thing, as I work for a Direct writer, might be different.
But in situations where you are in an accident that is not your fault, (ie Rear-ended) and you DO NOT have collison coverages. You will must likey be dealing with the 3rd-Parties company yourself. Your insurance company will not represent you.
Originally posted by tom_9109
This is a very good point which was going to be covered later.
When you get an insurance policy you are agreeing that the insurance company is your irrevocable attorney that will defend and settle all claims against you.
When you do not carry collision and the other company does not try to recover damages from your policy your insurance company has nothing to defend and will therefore not get involved. The other company knows this and will not try to say you're at fault when you clearly weren't as they know that your insurance company will then get involved and is bound to defend you. At that point it is your responsibility to deal with the other company and try to recover your damages. Some companies are very good to deal with in this situation, others are not so good.
I had a friend not carrying collision have someone turn left in front of him and they would only pay 75% of his damages as they felt he was 25% at fault. They never tried to recover 25% of their damages from my friends insurance company as they knew that his company would then have to get involved and defend the claim. It was a dirty play and they were definitely not acting in 'utmost good faith' fortunately the damage was minor and it made more sense to eat 25% than to get a lawyer.
If you do carry collision the insurance company is now going to be involved in negotiating and settling any claim. They are going to repair your vehicle out of their pocket (less deductible) and then subrogate (recover the repair amount) from the other company.
There is a bit of a catch to this though. You are agreeing that your insurer is your irrevocable attorney and you have no say how fault they accept in the collision. You may feel that you did nothing wrong but they may accept 50/50 fault. They do this because a lot of collisions cost a few thousand bucks and its a waste of money spending $5000 in adjusters to save 50% of $3500.
Most major insurance companies are now signatories to the IBC Agreement which has 'rules' as to which vehicle is at fault in a given situation. If both companies are signatories there are bound to accept the amount of fault assigned by the agreement regardless of any other factors.
You as the insured however are not bound by this. If you are in a collision where the IBC agreement states 50/50 you can still sue the other insurance company for 100% of your injuries/loss and the fact that the insurer accepted 50/50 can have no bearing on your case.
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