FSCO.Covgs

Reading: “What do the coverages mean?,” October 2014.

Authour: Financial Services Commission of Ontario (FSCO)

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BA Quick-Summary: Earthquakes This reading is just a dictionary of coverage definitions and basic insurance terminology. (So boring...) It defines Ontario auto coverages like accident benefits, and terms like minor injury.

Pop Quiz

• What are some proposed reforms to Canada's plaintiff-friendly tort system?

Keywords

accident benefits, minor injury, catastrophic injury, tort deductible

In Plain English!

Intro

There are 2 sections in this short reading:

• What do the coverages mean?
• What do the terms mean?

Each section is just a list of defns. This reading is specific to Ontario auto insurance, so I don't think the CAS wants you to memorize all of these definitions. (Many of them are obvious anyway.) Instead you must ask yourself:

• Why is this reading on the syllabus?
• What would be good exam questions?

I scanned the list of coverages and terms, and a few things jumped out:

• accidents benefits
  • This is one of the major ongoing problems with auto insurance in Ontario.
• catastrophic injury
  • This relates to two of the legal cases from the Landmark Legal Cases reading.
• tort deductible
  • There are other syllabus readings related to the tort system, so this strikes me as a topic of importance. (Harris.Tort, Dav.NonPec, AAA.Asbestos)
• minor injury
  • This relates to accident benefits coverage, and classification of an injury as a "minor injury" is intended to help bring costs down in this area. Here is an interesting article from the Toronto Star from 2013: Ontario Minor Injury Cap

Possible Questions

Above, we identified 4 important topics. Let's try to think of a few good exam questions based on those topics. (I'm just brainstorming! You should do the same!)

Accident Benefits and Minor Injury

AccBen 1: Auto insurance afforability is a major issue. Identify a coverage that is a major contributor to these costs.

• You could answer either accident benefits or Third Party Liability (bodily injury), but accident benefits is the better answer here.

AccBen 2: Identify a strategy for controlling these costs.

• A good answer would be the introduction of minor injury guidelines with a cap on compensation of $3,500.

AccBen 3: If this cap were challenged in court, what would be the likely outcome? Explain your reasoning, and cite any relevant precedents.

• Likely outcome: cap would be upheld
• Precedent: Morrow v Zhang (challenged the minor injury cap in Alberta in 2004, and the cap was upheld on appeal.)

Catastrophic Injury

Cat 1: How is a catastrophic injury defined for Ontario auto insurance?

• serious, life-threatening, loss of limbs, eyesight,...

Cat 2: Why would a victim want to have their injury classified as catastrophic?

• There is a higher level of benefits when the injury is catastrophic.

Cat 3: Fully describe an Ontario legal case related to catastrophic injury.

• You could describe either Kusnierz v Economical or Aviva v Pastore.

Tort Deductible

Tort Deductible 1: Define the term tort deductible

• the amount that is deducted from a settlement or court award for pain and suffering

Tort Deductible 2: If a victim is awarded $35,000 for pain and suffering and the tort deductible is $30,000, what is the net amount the victim receives.

• $5,000

Tort Deductible 3: What is the purpose of a tort deductible?

• to reduce litigation of minor claims (because if the award is less than the deductible, the net amount received by the victim would be zero anyway)

Tort Deductible 4: What is the current cap on awards for pain and suffering?

• $100,000 inflation-adjusted from 1978, but subject to certain exceptions (sexual abuse, defamation, negligence causing financial damage)

Tort Deductible 5: What are some proposed reforms to Canada's tort laws?

• JCCV: Do you remember what this means??!! If not, review Harris.Tort.

BattleCodes

• Memorize:
  • defns: accident benefits, minor injury, catastrophic injury, tort deductible

• Conceptual:
  • How do these terms relate to other topics on the syllabus?

• Calculational:
  • none

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POP QUIZ ANSWERS

• Proposed reforms to Canada's tort system: JCCV

• J: Joint & Several Liabiity (eliminate for non-pecuniary damages)
• C: Collateral Source Rule (eliminate)
• C: Compensation Basis (change to net basis)
• V: Vicarious Liability (eliminate)

• See Harris.Tort for details