What are the rights and responsibilities of an insured and the insurer under an automobile insurance policy and what are the main terms and conditions that govern an automobile insurance contract in Ontario?
Automobile Insurance Policy
In Ontario, every motor vehicle is required to have a liability insurance coverage pursuant to section 2 of the Compulsory Automobile Insurance Act. An automobile insurance policy is an insurance coverage contract between the insurer and the insured. The terms of such contracts are governed by the Insurance Act and Regulations made under it. Furthermore, another very important document known as (OAP 1) Owner’s Policy that consumers should ask their insurance company to send to them when buying a new policy. OAP 1 Owner’s Policy manual sets the rights and obligations of the insurer and the insured and provides all relevant terms and conditions that apply to any automobile insurance liability insurance coverage in Ontario.
Insured’s Responsibilities under Automobile Insurance Contract
Claims of Property Damage
You or other insured persons must notify the insurance company of a claim and provide proof of claim. The insurance company will send a “Proof of Loss Form” once the insured files the claim, which the insurer needs to sign and return to the insurer. Proof of loss form records the formal statement concerning a loss for which a claim is submitted. It provides the insurance company with all the information it would need to determine whether the claim is reasonable and the extent of the insurer’s liability. If you are unable to complete the documents personally and file with the insurer, you may have someone act on your behalf.
Payment of Claims
Your insurance company will pay legitimate property damage claim within 60 days of receiving a “Proof of Loss”. However, some claims made under Statutory Accident Benefits Schedule are paid sooner than 60 days. If your insurance company refuses to pay your claim, it will notify you in writing explaining the reasons why it is not liable to pay your claim.
Cancellation of Policy for Non-payment of Premium
Your insurance may give you notice in writing for cancellation of your policy for non-payment of premium. Your insurer must give you 10 days notice if the notice is delivered in person, or 30 days notice by sending the notice by registered mail to your last known address. The 30-day period starts on the second day after the insurance company mails the registered letter. The notice will inform you that you have until noon of the business day before the last day of the notice period to pay the arrears, plus and administration fee, failing which the policy will automatically be cancelled effective at 12:01 a.m. on the last day of the notice period. If you pay the arrears and the administration fee in time, then your policy should not be cancelled. However, if your insurer has already given you two notices of non-payment of the premium during the term of your policy and non-payment occurs again, the insurer is not required to give another notice under this section and may instead cancel your policy.
Except for certain Accident Benefits coverage, your insurer will not extend coverage if:
It is an offence under the Insurance Act to knowingly make a false or misleading statement or representation to an insurer in connection with the person’s entitlement to benefit under a contract of insurance or to willfully fail to inform the insurer of a material change in circumstances within 14 days, in connection with such entitlement. The offence is punishable on conviction by a maximum fine of $250,000 for the first offence and a maximum fine of $500,000 for any subsequent conviction.
It is an offence under the federal Criminal Code for anyone to knowingly make or use a false document with the intent it be acted on as genuine and the offence is punishable, on conviction, by a maximum of 10 years imprisonment.
It is an offence under the federal Criminal Code for anyone, by deceit, falsehood, or other dishonest act, to defraud an insurance company. The offence is punishable, on conviction, by a maximum of 14 years imprisonment for cases involving an amount over $5,000 or otherwise a maximum of 2 years imprisonment.
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