Insurance
Misrepresentation
Provides false information about the described automobile to be insured, or knowingly misrepresents or fails to disclose any required facts in the application;
Violates a term of the insurance contract or commits fraud; or
Willfully makes a false statement when filing a claim,
then their claim becomes invalid, and they forfeit their right to receive compensation or indemnity from the insurer.
Additionally:
The insurer cannot use any statement made by the applicant as a defence in a claim unless it is included in the signed written application or any related document attached to the insurance policy.
Any statement in a copy of the application, except for the description of the risk and the extent of the insurance, cannot be used by the insurer as a defence in a claim unless they can prove that the applicant actually made the statement mentioned in the copy.
Statutory Conditions
Material change in risk
The insured must inform the insurer in writing of any changes to the risk associated with the contract, such as changes in ownership, liens, or other insurance coverage for the same interest.
Prohibited use by insured
The insured is not allowed to drive the automobile unless authorized by law, qualified to drive, and not under suspension or prohibition. They also cannot use the vehicle for illegal activities, races, or speed tests.
Prohibited use by others
The insured cannot permit anyone under 16 years of age or without a license to drive the automobile. If a member of the insured's household has a suspended license, they also cannot use the vehicle.
Requirements for reporting accidents
The insured must promptly notify the insurer in writing of any accidents involving damage or injury, provide all available details, and forward any related correspondence from claimants. They may be required to verify the claim by statutory declaration.
Prohibited acts of insured
The insured cannot assume liability or settle claims on their own, or interfere in negotiations or legal proceedings related to the claim.
Obligation of insured:
The insured must cooperate with the insurer in securing information, evidence, and witnesses for defence or appeal, excluding financial contributions.
Requirements for loss or damage to the automobile
In case of loss or damage covered by the contract, the insured must promptly notify the insurer, protect the automobile from further damage, and provide a statutory declaration with details of the loss, encumbrances, and any other insurance coverage.
Insurer's liability
The insurer's liability is limited to the actual cash value of the automobile at the time of loss or damage, with deductions for depreciation. They may choose to repair or replace the damaged property.
Termination of the contract
The contract can be terminated by either party giving notice. Upon termination by the insurer, they must refund the excess premium paid by the insured.
The insured must comply with the requirements and limitations specified in the statutory conditions to bring an action or claim under the contract.
Exceptions and variations: Some of these conditions may not apply or can be omitted depending on the type of insurance coverage.
Coverage for the insured and others:
An owner's insurance policy covers the person named in the policy and anyone else who drives the insured vehicle with their consent. It provides protection against legal liability for any loss or damage caused by the ownership, use, or operation of the vehicle. This includes bodily injury, death, and property damage.
Coverage for other automobiles: If the policy also includes coverage for vehicles not owned by the named insured, the insurer can specify that the insurance only applies to certain individuals listed in the policy.
Death of the named insured: If the person named in the policy dies, the following individuals will be considered insured under the policy:
Spouse or common-law partner:
If the deceased insured's spouse or common-law partner was living in the same residence at the time of their death, they are covered.
Newly acquired and temporary substitute automobiles:
The coverage extends to newly acquired vehicles that were obtained by the deceased insured before their death, as well as temporary substitute vehicles. The coverage applies to:
Anyone who has temporary custody of these vehicles until the deceased insured's personal representative (executor or administrator) is granted probate or administration.
The personal representative themselves, who is responsible for managing the deceased insured's estate.
Persons not deemed owners:
A person is not considered the owner of a vehicle solely because they have a lien (a financial interest) on the vehicle or hold legal title to it as security.
Territorial limits:
The insurance coverage applies to the ownership, use, or operation of the insured vehicle within Canada and the United States, including voyages between ports of these countries.
Rights of unnamed insured:
If a person is insured but not specifically named in the insurance contract, they can still claim indemnity (compensation) in the same way and to the same extent as if they were named as the insured. They are treated as a party to the contract and are deemed to have provided consideration (something of value) for the insurance coverage.
Every motor vehicle liability insurance policy must include certain provisions:
Upon receiving notice of a claim for loss or damage to persons or property resulting from an accident involving a vehicle covered by the policy, the insurer is responsible for conducting investigations, negotiating with the claimant, and settling claims as they see fit.
The insurer will defend the insured in any civil action brought against them due to loss or damage to persons or property arising from the ownership, use, or operation of the insured vehicle. The insurer covers the costs of legal defence.
The insurer will pay for all costs awarded against the insured in a civil action defended by the insurer, within the limits of the insurer's liability. This includes any interest that accrues after the judgment is entered.
If a person is injured, the insurer will reimburse the insured for the immediate medical expenses incurred at the time of the accident.
Common-law partner:
A common-law partner is someone who is in a relationship similar to marriage, but they are not legally married. This provision extends coverage to the common-law partner of the insured if they live together in the same dwelling.
Carriage of clients or customers:
The policy covers the insured's use of their vehicle to transport clients, customers, or potential clients/customers.
Transportation of children to/from school activities:
The policy covers the insured's occasional and infrequent use of their vehicle to transport children to or from school or school activities within the educational program.
Minimum liability under the policy:
The policy provides a minimum coverage limit of at least $200,000 for bodily injury, death, and property damage resulting from a single accident.
Priorities:
If a single accident involves both bodily injury/death and property damage, claims related to bodily injury/death have priority up to $180,000, while claims related to property damage have priority up to $20,000.
Minimum limits with separate designations:
Instead of an inclusive amount, the insurer can specify separate liability limits of at least $200,000 for bodily injury/death and at least $200,000 for property damage.
Variation of limits:
The insurer can increase or reduce the liability limits specified in the policy for the use or operation of the vehicle by a named person, as long as the limits don't fall below the minimum required.
Stipulation in the policy:
Every motor vehicle liability policy must include provisions that state the insurer cannot use any defense to a claim that they couldn't use if the policy were issued in the province or territory where the claim is made. The insured appoints the insurer as their attorney to appear and defend in any province or territory where an action is brought against them due to the ownership, use, or operation of the vehicle.
Power of attorney binding:
The provision stating that the insurer is appointed as the insured's attorney is legally binding on the insured.
Physical Damage coverage
Stipulations in physical damage cover:
The insurer can include exclusions and limitations in a contract that relate to the loss or damage of the insured vehicle or its loss of use. These stipulations are determined by the insurer as necessary.
Partial payment of loss clause:
The insurance contract may include a clause stating that in the event of a loss, the insurer will only pay a specified portion of the loss or the loss amount minus a predetermined deductible, whichever is less, up to the maximum coverage amount.
Claims adjustment with insured:
When a claim is made under a contract other than a motor vehicle liability policy, the insurer is required to adjust the claim amount with the insured named in the contract and any other person listed as having an interest in the contract.
Limited accident insurance:
Uninsured motorist coverage: If an insured person is involved in an accident caused by another person who is legally liable but has no insurance or cannot be identified, the insurance coverage applies to the insured person, their spouse or common-law partner, dependent relatives living in the same dwelling, and any person who sustains injury while driving or being carried in the insured vehicle.
Limited application:
The uninsured motorist coverage mentioned above does not apply if the person specified in the coverage has the right to recover from The Unsatisfied Judgment Fund Act or similar legislation in another province or territory of Canada, or from any state or the District of Columbia in the United States.
Medical expense coverage:
If the contract includes insurance for medical, surgical, dental, ambulance, hospital, nursing, or funeral services, the coverage applies to reasonable expenses incurred by the insured person, their spouse or common-law partner, dependent relatives living in the same dwelling, and any person who sustains injury while driving or being carried in the insured vehicle or is struck by another vehicle mentioned in the contract.
Release by the claimant:
If the insurer makes a payment under the insurance contract for medical expenses, it serves as a release by the insured person or their representatives of any claims against the insurer or other liable parties. The insurer may require a release as a condition for payment.
First loss and excess insurance:
The medical expense coverage provided by the insurer is considered first loss insurance, meaning it pays out before any other insurance of the same type. Any other available insurance for the same expenses is considered excess insurance and pays only if the first loss insurance is insufficient.
Accident benefits:
If the insurance contract includes accident insurance benefits for death or injury resulting from an accident involving a vehicle, the coverage applies to the insured person, their spouse or common-law partner, dependent relatives living in the same dwelling, and any person who sustains injury while driving or being carried in the insured vehicle or is struck by another vehicle mentioned in the policy.
Limit of benefit payable:
If a person is entitled to benefits under multiple insurance contracts of the same type, they can only recover an amount equal to one benefit if the limits are the same, or the highest benefit if the limits differ.
Legal action limitations
Any legal action or lawsuit against an insurer for insurance coverage must be initiated within the time limit mentioned in the insurance contract.
However, this time limit cannot be shorter than one year from the date of the accident. In other words, there is a specific timeframe within which a person must file a claim or take legal action against the insurer for coverage related to bodily injury, death, or accident benefits, and this timeframe cannot be less than one year from the accident date.
Subrogration
Subrogation means that when an insurance company pays a claim or takes on liability for a loss under a contract, it gains the right to seek reimbursement from any other party responsible for the loss.
The insurer can also take legal action in the insured person's name to enforce these rights.
If the amount recovered from the responsible party is not enough to fully compensate for the loss, the remaining amount is divided between the insurer and the insured based on the proportion in which they have borne the loss.
When a partial payment of loss clause applies, and the insured's interest in the recovery is limited to that clause, the insurer has control over the legal action.
If there is a disagreement between the insured and the insurer regarding matters like legal representation, handling of the action, settlement offers, costs, or appeal decisions, either party can apply to the court for a resolution. The court will make a fair decision based on the interests of both the insured and the insurer.
Only the insured and the insurer are entitled to notice and be heard in court proceedings related to these matters. Any materials or evidence used in the application are not admissible during the trial of an action involving the insured or the insurer.
A settlement or release given before or after an action is brought does not prevent the insured or the insurer from pursuing their rights unless they both agree to the settlement or release.
MN Insurance Act s. 236, 237, 239, 241-244, 249, 260-265, 269, 273