Statutory Conditions

Material Change in Risk:

The insured must notify the insurer in writing of any changes in the risk that is significant to the contract and within their knowledge. This includes changes in the insured's interest in the insured item (e.g., selling the item), mortgage or lien affecting the item, or other insurance covering the same interest.

Prohibited Use by Insured:

The insured is not allowed to drive or operate the insured item under certain circumstances. These include not being authorized or qualified to drive, having a suspended or prohibited license, being underage, or using the item for illegal purposes or in races.

Prohibited Use by Others:

The insured cannot permit or allow unauthorized or underage persons from using the insured item. This also applies to household members of the insured with suspended licenses or legal prohibitions, and using the item for illegal purposes or in races.

Requirements in Case of Loss or Damage to Persons or Property:

The insured must promptly notify the insurer in writing of any accidents causing loss or damage to persons or property and any claims made. They may need to provide a statutory declaration confirming that the claim is related to the use of the insured item and that the person responsible for the accident is insured under the contract. The insured should also forward any correspondence received from the claimant to the insurer.

Requirements in Case of Loss or Damage to the Insured Item:

If the insured item is lost or damaged and covered by the contract, the insured must notify the insurer in writing with all available information. They should also protect the item from further loss or damage, and within 90 days, provide a statutory declaration with details about the loss or damage, interests and encumbrances on the item, other insurances covering the item, and a statement that the loss or damage did not occur due to willful acts or neglect by the insured.

Examination and Cooperation:

The insured may need to submit to an examination under oath and provide relevant documents to the insurer. They should cooperate with the insurer, except in financial matters, in defending any legal actions or proceedings.

Insurer's Liability:

The insurer's liability for the loss or damage to the insured item is limited to the actual cash value of the item at the time of the loss or damage. This value is determined by considering depreciation and the cost of repairing or replacing the item with similar materials. If any parts are obsolete, the liability is limited to their value at the time of the loss or damage.

Coverage:

Owner's Policy for a Specific Automobile:

• An owner's policy covers the person named in the policy and anyone else who personally drives the insured person's owned automobile with their consent.

• It provides insurance against liability for loss or damage arising from the ownership, use, or operation of the insured automobile.

• It also covers bodily injury or death to any person and damage to property.

Owner's Policy for Other Automobiles:

• If the owner's policy includes coverage for automobiles not owned by the insured person, the insurer can restrict the coverage to specified individuals named in the policy.

Death of the Named Insured:

• If the insured person named in an owner's policy dies, the following individuals are considered insured under the policy:

  • The deceased insured's spouse residing in the same dwelling premises at the time of death.

  • In respect of the described automobile, a newly-acquired automobile acquired by the deceased insured before their death or a temporary substitute automobile as defined in the policy:

    • Any person temporarily having custody of the automobile until the grant of probate or administration to the deceased insured's personal representative.

    • The personal representative of the deceased insured.

Non-Owner's Policy:

• A non-owners policy covers the person named in the policy and any other person specified in the policy.

• It provides insurance against liability for loss or damage resulting from the use or operation of an automobile defined in the policy, excluding automobiles owned or registered by the insured person.

Persons Not Considered Owners:

• For the purposes of this policy, a person is not considered the owner of an automobile solely because they have a lien on it or hold legal title to it as security.

Rights of Insured Persons Not Named in the Contract:

• Any person who is insured but not named in a contract covered by sections 131 or 132 can claim indemnity in the same way and to the same extent as if they were named in the contract as the insured person.

• They are considered a party to the contract and are deemed to have provided consideration for it.

Additional Agreements in Motor Vehicle Liability Policies:

• Every motor vehicle liability policy contract must include certain provisions:

  • Upon receiving notice of loss or damage caused to persons or property, the insurer will investigate, negotiate with the claimant, and settle any resulting claims as deemed appropriate.

  • The insurer will defend the insured person in any civil action brought against them due to loss or damage to persons or property.

  • The insurer will pay all costs awarded against the insured in a defended civil action and any interest accruing after the judgment.

  • For injuries to a person, the insurer will reimburse the insured for immediately necessary medical expenses.

Liability for Contamination of Property:

• Liability arising from the contamination of property carried in an automobile is not considered liability arising from the ownership, use, or operation of that automobile.

Exceptions and Restrictions to Liability:

• The insurer is not liable under the policy for certain situations, including:

  • Liability imposed by workers' compensation laws on any insured person.

  • Liability resulting from bodily injury or death to specific individuals, such as family members, while in or near the insured automobile.

  • Liability resulting from bodily injury or death to an employee of the insured while engaged in the operation or repair of the automobile.

Family Exclusion Clauses:

• A provision in a motor vehicle liability policy contract may exclude the insurer's liability to indemnify the insured person for bodily injury or death of specific individuals described in the policy.

Minimum Liability Coverage:

• A motor vehicle liability policy contract provides insurance coverage for bodily injury, death, and property damage resulting from an accident.

• The minimum coverage limit for any one accident is not less than $200,000, excluding interest and costs.

Priority of Claims:

• If a single accident involves both bodily injury or death and loss of or damage to property:

  • Claims related to bodily injury or death have priority up to $190,000 over claims for property damage.

  • Claims related to property damage have priority up to $10,000 over claims for bodily injury or death.

Separate Minimum Limits:

• Instead of a combined limit, the insurer may specify separate minimum limits in the policy:

  • At least $200,000, excluding interest and costs, for bodily injury or death.

  • At least $200,000, excluding interest and costs, for loss of or damage to property.

Variation of Limits:

• The insurer can increase or reduce the limits specified in the policy for the use or operation of the automobile by a named person.

• However, any reduction in limits cannot be below the minimum limits required by law.

Stipulation in Northwest Territories Policies:

• In policies issued in the Northwest Territories:

  • The insurer is liable up to the higher minimum limits established by the province or territory if they exceed the policy's limits.

  • The insurer cannot raise any defence to a claim that would not be allowed if the policy were issued in the province or territory.

  • By accepting the policy, the insured person appoints the insurer as their attorney to appear and defend them in any province or territory where an action arises from the ownership, use, or operation of the automobile.

Claims

If a person has a claim against an insured person covered by a motor vehicle liability policy, they can recover a judgment against the insured in a province or territory.

The person can then have the insurance money from the policy applied towards satisfying their judgment and any other judgments or claims covered by the policy. They can also file a lawsuit against the insurer to have the insurance money applied.

• There is a time limit of two years to bring an action against the insurer after the final determination of the action against the insured.

The insurer can include exclusions and limitations in the insurance contract regarding loss, damage, or loss of use of the automobile, as it deems necessary.

The insurance contract can have a clause stating that in the event of a loss, the insurer will only pay a portion of the loss or the amount of the loss after deducting a specified sum, as long as it doesn't exceed the insurance amount.

• The policy must include a prominent statement that it contains a partial payment of loss clause.

When a claim is made under a contract that is not a motor vehicle liability policy, the insurer is required to adjust the amount of the claim with the insured named in the contract and any other person with an indicated interest in the contract, regardless of any prior agreements.

• If the insured cannot be located or fails to give notice or make a claim, someone else can provide notice or proof of loss on their behalf. In such cases, the insurer may adjust and pay the claim to the person who provided the notice or proof of loss, but not earlier than 60 days after delivering the required proof.

NWT Insurance Act s. 131-133, 135-141, 151, 152-155