Alberta Training

Myrna has just moved from Ontario to Alberta and is really confused about the differences on her insurance policy…

Lets give her a hand!

Fault or No Fault: What’s the Difference?

No-fault insurance exists to ensure that

those injured in a collision receive

compensation and benefits from their own

insurance company, regardless of fault.

Direct Compensation We say that you get to go HOME (to your

own insurance company)for physical damage to your vehicle to the

percentage (%) you are NOT AT FAULT

Michelle Dulmage

A Claim Situation:

OntarioCoverage

(AF)Collision Purchased

Collect damage under own policy and pay Deductible to repair.

(AF)Collision NOT Purchased

No coverage available

(NAF)Collision Purchased

Paid for under own policy (under DCPD) subject to a deductible

(usually $0)

(NAF)Collision NOT Purchased

Paid for under own policy (under DCPD) subject to a deductible

(usually $0)

Wow! I am so glad I live in Ontario.

If I’m Not At Fault, I have my comfy

cushion of DCPD to relay on.

I could really use an example

to make this AF/NAF Stuff clear.. Hem

Hem…

Example: OntarioDriver A:

Liability: 2 millionCollision: 500 Deductible

Comprehensive: 300 Deductible

Driver “A” is deemed to be 100% At fault

Driver B:Liability: 2 million

Collision: 500 Deductible Comprehensive: 300

Deductible

Driver “A” is deemed to be 100% Not At fault

I wonder what would happen

if I lived in Alberta.

Whoa!!That guy was a

Johnny Midnight!Glad she had

DCPD .. Am I right!

Alberta TrainingDetermining Fault in Ontario vs. Alberta

The Tort System Alberta operates under a Tort

system.

What is a Tort?A “Tort” is a legal wrong

How does this Tort System effect Insured's?

Alberta Insured's don’t always have the option of coming back to their policy when they are Not At Fault. This is because they don’t have DCPD coverage.

As a result, Alberta insured's must sue privately in order to be indemnified when they don’t have the appropriate

coverage on their policies.

Even when they are NOT AT FAULT!!

A Claim Situation:

Ontario AlbertaCoverage Outcome

(AF)Collision Purchased

Collect damage under own policy and pay Deductible to repair.

(AF)Collision NOT Purchased

No coverage available

(NAF)Collision Purchased

Paid for under own policy (under DCPD) subject to a deductible

(usually $0)

(NAF)Collision NOT Purchased

Paid for under own policy (under DCPD) subject to a deductible

(usually $0)

Coverage Outcome(AF)Collision Purchased

Collect damage under own policy and pay Deductible to repair.

(AF)Collision NOT Purchased

No coverage available

(NAF)Collision Purchased

Option One:Pay for under own policy subject

to deductible . Wait to be reimbursed for deductible

Option Two:File a claim with own insurer and wait for 3rd party company to pay

for entire amount. 2 weeks/ 2 months

(NAF)Collision NOT Purchased

No assistance from insurance company. Need to contact 3rd

party insurance directly and work with them

Example One: AlbertaDriver A:

Liability: 2 millionCollision: 500 Deductible

Comprehensive: 250 Deductible

Driver “A” is deemed to be 100% At fault

Driver B:Liability: 2 million

Collision: 500 Deductible Comprehensive: 250

Deductible

Driver “A” is deemed to be 100% Not At fault

Ok, I guess she still gets

covered, but what if I don’t have collision

coverage?

Example Two: AlbertaDriver A:

Liability: 2 millionCollision: 500 Deductible

Comprehensive: 250 Deductible

Driver “A” is deemed to be 100% At fault

Driver B:Liability: 2 million

Comprehensive: 250 Deductible

Driver “A” is deemed to be 100% Not At fault

Are you kidding me

…I miss my

DCPD

Example Three: AlbertaDriver A:

Liability: 2 millionComprehensive: 250Deductible

Driver “A” is deemed to be 100% At fault

Driver B:Liability: 2 million

Comprehensive: 250 Deductible

Driver “A” is deemed to be 100% Not At fault

What?Doesn’t seem

very fair. I better get Collision

coverage on my policy!

Example Four: AlbertaDriver A:

Liability: 2 millionComprehensive: 250Deductible

Driver “A” is deemed to be 50% At Fault

50% Not At Fault

Driver B:Liability: 2 million

Comprehensive: 250 DeductibleCollision: 500 Deductible

Driver “A” is deemed to be 50% At Fault

50% Not At Fault

Wow!!Pays to have

Collision coverage !!

COLLISION (Alberta)

Not At FaultAt Fault

COLLISION (Is needed for At Fault and Not at Fault Accidents)

If you don’t have collision coverage you are NOT covered in either situation Collision (in Alberta) acts as a DCPD and COLLISION rolled into One.

ConvictionsAlberta• Moving violations • Suspensions are the

same• Fines will still be

applied but they are not ratable on the policy Ontario

• Moving violations• Seatbelt• Cell phone• Failure to provide pink

card• ETC…

So, I’ll likely have to pay a

fine, but in AB if its not a moving violation it isn't ratable on the

policy?AMAZING!!

Alberta TrainingThe difference in Coverage

Coverage Comparison Ontario Alberta

Coverage ABLiability 2 Million Accident Benefits No Increases

Available Uninsured SameDCPD N/ACollision 500Comprehensive 25013D On every policy

Coverage ONTLiability 2 Million Accident Benefits Optional Increases

Uninsured SameDCPD √Collision 500Comprehensive 300

Alberta TrainingLicence Classes

Drivers License FormatOntario: Emily DugganDOB: Dec 31 1984D9225- 54428-46231

Alberta: 123456-789

Male: 1-2Female: 5-6

Day of the Month

Year of Birth

Same as the rest of the family. This will not

change until there is a name change, marriage

or divorce etc.

Drivers License Format

Alberta:Ewa KrempaDOB: December 07 1981144107-851

The numbers are a random

selection? That’s much

easier!

License ClassesClass 1 (Professional - Any vehicle)

Class 2 (Professional - Bus)

Class 3 (3-axle plus)

Class 4 (Professional - Taxi, Ambulance)

Class 5 (2-axle - Cars, Light Trucks, Motor Homes or Mopeds)

Class 6 (Motorcycle & Moped)

Class 7 (Learners - 2-axel & Motorcycle & Moped)

Alberta's Graduated Driver Licensing Program

Graduated Driver Licensing (GDL) has changed the way new drivers are

licensed in Alberta. The GDL program ensures new drivers, regardless of age, get the support, skills and experience they need to handle the complex task

of driving.

1 STAGE ONE: LEARNER

To obtain a Learner’s License (Class 7)you must:• Be 14 years of age or older.• Pass a vision test and a knowledge• test on the rules of the road.• Have parental consent if you are under 18 years of age.• Have valid identification.

Learner’s Conditions• Must hold the Learner’s license (Class 7) for at least 1

year.• Must be accompanied by a fully licensed (non-GDL

probationary) driver who is 18 years of age or older and who is seated next to the driver.

• Not permitted to drive from midnight to 5 A.M.• Not permitted to have more passengers than seat belts• They will be suspended at 8 demerit points rather than the

15 for fully licensed drivers.• Have a zero alcohol level.

2 STAGE TWO: PROBATIONARY To become a Probationary Driver (Class 5-GDL) you must: • Be 16 years of age or older. • Have held a Class 7 license at least one year. • Pass the basic Alberta Class 5 road test.

Probationary Conditions • Must spend a minimum of 2 years as a probationary driver. • Not permitted to have more passengers than seat belts. • They will be suspended at 8 demerit points rather than the 15 for fully

licensed drivers. • Have a zero alcohol level. • No upgrading to a commercial license (Classes 1, 2, 3 or 4). • Cannot serve as an accompanying driver to a learner.

To become a fully licensed driver (Class 5) you must: • Have been suspension free for the last year of the 2-year Probationary

Stage. • Pass an advanced road test.

Stage1 + Stage 2It will take a minimum of 3 years to complete both stages of Graduated Driver Licensing. It will take 4 years if you get your Learner’s License at 14 years of age.

To become a Probationary Driver you must:– Be 16 years of age or older.– Pass the basic Alberta Class 5 road test.

Probationary Conditions– Must spend a minimum of 2 years as a probationary driver.– Not permitted to have more passengers than seat belts.– They will be suspended at 8 demerit points than fully licensed drivers at

15.– Have a zero alcohol level.– No upgrading to a commercial license (Classes 1, 2, 3 or 4).– Cannot serve as an accompanying driver to a learner.

To become a fully licensed driver (Class 5) you must:

– Have been suspension free for the last year of the 2-year Probationary Stage.

– Pass an advanced road test.

MotorcycleIf you apply for a Motorcycle License (Class 6) as your first license, you are subject to the conditions of the Graduated Licensing Program.

– If learning to drive a motorcycle, you must be 16 years of age and are not permitted to drive during nighttime hours.

– You must be accompanied by a fully licensed (non-GDL probationary) driver who is 18 years of age or older and is either seated on the motorcycle with you or is following you in close proximity in or on another motor vehicle.

Driver Assignment

Rules For Adding Drivers in Alberta

P/O: Everyone in the P/O added at least once. The individual who uses the vehicle the most should be rated as the P/O of the corresponding vehicle.

OCC: Class 05/06 Driver added to the highest rated vehicle (under age 25, and not listed as P/O of a vehicle)

Secondary: used when we need to rate for a second drive who is not an OCC and is not being rated on another vehicle. (usually used when there is only 1 vehicle)

Not included in Rating: Used when a driver has already been listed as P/O or OCC of another vehicle

Excluded: Only used when a driver has provided a signed 28A. The driver is not permitted to have any use the vehicle. They will not have coverage. This endorsement should be offered with care.

2015 Scion – P/O

2015 Scion FRX

2015 Scion – S

Driver #1• Linda Smith• Age 60 years old • Class 5• She drives the

2015 Scion FRX the most

• Drives to work • 15 km one way • 30,000 annual

Driver #2• Carl Smith• Age 63 years old • Class 5• He currently

does not work and occasionally uses the vehicle for pleasure.

Driver Assignment

Driver #1• Linda Jones• Age 60 years old • Class 5• She drives the 2015 Scion

FRX the most• Drives to work • 15 km one way • 30,000 annual

Driver #2• Stacy Jones• Age 22• Class 5• She drives the 2008 Toyota

Corolla the most • 11 km one way• 10,000 annual

Driver #3• Robby Jones• Age 15• Class 7(This is equivalent to the G1)

2008Toyota Corolla 2015 Honda Civic 2015 Scion FRX

2015 Scion – P/O2015 Honda – N/R2008 Toyota- N/R

2015 Scion – N/R2015 Honda – N/R2008 Toyota- P/O

Robby only has his Class 7Therefore, either Stacy or Linda Could be rated as P/O on the 2015 Honda*Create f/up for Class 5

Driver Assignment

Driver #1• Linda Jones• Age 60 years old • Class 5• She drives the 2015 Scion

FRX the most• Drives to work • 15 km one way • 30,000 annual

Driver #2• Stacy Jones• Age 22• Class 5• She drives the 2008 Toyota

Corolla the most • 11 km one way• 10,000 annual

Driver #3• Robby Jones• Age 15• Class 5• Linda advises that he will

be sharing the 2008 Toyota with his sister.

2008Toyota Corolla 2015 Honda Civic 2015 Scion FRX

2015 Scion – P/O2015 Honda – N/R2008 Toyota- N/R

2015 Scion – N/R2015 Honda – N/R2008 Toyota- P/O

2015 Scion – N/R2015 Honda – P/O2008 Toyota- N/R

Driver Assignment

Driver #1• Linda Jones• Age 60 years old • Class 5• She drives the 2015 Scion

FRX the most• Drives to work • 15 km one way • 30,000 annual

Driver #2• Stacy Jones• Age 22• Class 5• She drives the 2008 Toyota

Corolla the most • 11 km one way• 10,000 annual

Driver #3• Robby Jones• Age 15• Class 5• Linda advises that he will

be sharing the 2008 Toyota with his sister.

2008Toyota Corolla 2015 Scion FRX

2015 Scion – P/O2008 Toyota- N/R

2015 Scion – N/R2008 Toyota- P/O

2015 Scion – OCC2008 Toyota- N/R

Alberta TrainingThe Date of Relevance

Determining the Relevant DateRelevant Date will fall under two categories:

Category One:Driver was insured in Alberta during the

implementation of Auto Insurance reform (October 01, 2003- October 01, 2003)

Category Two:Driver becomes insured in Alberta anytime

(After October 01 ,2004)

Oct 01, 2003 – Oct 01, 2003

Auto Insurance Reform

Post Oct 01,2004Prior to Oct 01,2003

Category One Category Two

Determining the Relevant DateCategory One:

Driver Was Insured in Alberta during the Implementation of Auto insurance

Relevant date will be:- First time the insured/ driver was placed on the

grid

- Most recent date a new or renewed basic policy coverage came into effect between October 01,

2003 and October 01, 2004

Oct 01, 2003 – Oct 01,2004

Auto Insurance Reform

Post Oct 01,2004Prior to Oct 01,2003

Category One Category Two

Finding the Date of Relevance

January February March April May June July AugustSeptember

Before OCT 01, 2003 Defaults to 2004

Between October 01, 2003-Oct 01

2004Defaults to2003

October NovemberDecember

If the client was first insured before Auto Reform began October 01 2003then their Relevance date defaults to Month, Day, 2004

If the client was first insured after Auto Reform began October 01, 2004 then their relevance date default to the actual date they were first insured. E.g. Auto Reform Ended Oct 01 2004. If the Insured was first Insured October 02 2004 then their relevance date would be October 02 2004

If the client was first insured while Auto Reform was in Progress October 01, 2003 – October 01 2004 , then their relevance dateDefaults to the Month, Day, 2003

Oct 01, 2003 – Oct 01, 2003

Auto Insurance Reform

Post Oct 01,2004Prior to Oct 01,2003

Category One Category Two

October 01, 2003

Example One: Calculating the Date of Relevance

Driver #1:Date Licensed: June 01, 1995

Date first insured: June 01, 1997 – to Present

When is the clients Date of Relevance?

Answer: June 01 2004

Example Two: Calculating the Date of Relevance

Driver #1:Date Licensed: April 01, 1980

Date first insured: April 01, 1980 - Present

When is the clients Date of Relevance?

Answer:Driver One: April 01, 2004

Driver Two: November 01, 2004

Driver #2:Date Licensed: November 01,

1983

Date first insured: Added to Driver #1 policy

November 01, 1983

When is the clients Date of Relevance?

Example Three:Driver #1:

Date Licensed: December 15,2003Date first insured: December 15,2003

When is the clients Date of Relevance?

Driver #2:March 16,2015

Date first insured: March 16,2015

When is the clients Date of Relevance?

Answer:Driver One: December 15, 2003

Driver Two: March 16, 2015

Alberta TrainingThe “Take All Comers” Rule

Take all Comers Rule

Even if the client

doesn't qualify for the regular market we

MUST quote them in regular

book

Sounds like I can get away with

just about anything here

in Alberta!

Adverse Contractual RuleThe exception to the “Take all comers Rule”

An insurer, insurance agent or insurance broker shall not, directly or indirectly, take any adverse contractual action with respect to an insured or an applicant for a contract except for one or more of the following reasons:

A. The non-payment of a premium or any portion of a premium;

B. The failure of the insured or the applicant for a contract to inform the insurer or to keep the insurer informed, where requested to do so by the insurer, as to who is the principal driver of the automobile for which the insurance coverage is or is to be issued;

C. In the case of an insurer that is a provincial or extra-provincial company, the insurer is required to cease to undertake or to offer to undertake insurance in Alberta pursuant to section 25(2);

D. The insurer’s license is suspended or cancelled.

E. In the case of an insurer that is a federally authorized company, the Federal Super Institutions has ordered or otherwise directed the insurer to cease carrying on business or insuring risks in Canada;

F. The insurer has filed notice under section 611(3) that the insurer intends to withdraw from the business of automobile insurance;

G. Where permitted by regulation, any reasons not referred to in clauses (a) to (f) that are prescribed or otherwise described by regulation.

These rules

pertain to the

actions of the client.

These rules

pertain to the

actions of the

company

Well, Maybe not Everything!

What does this mean for service and sales?

• The “Take all comers rule” becomes pertinent when conducting a remarket.

• This means that –providing the company offers the coverage required- that they cannot deny the business.

• Unless (as per the adverse contractual rules). There is a non-payment issue (refer to Dec rules for each company)

• Or, the client has misrepresented the risk to the insurer.

– We should be wary of outstanding premium owed to a company before remarketing

– Cancellations for Non-payment – Fraud and Misrepresentation

Alberta TrainingThe Grid

The GRID?

Applying Grid Rate?Grid Premium for Basic Coverage

Grid applies only to basic coverage premiums (third party liability & accident benefits)

About 10% of drivers are rated on Grid Less experienced drivers are often capped by Grid As drivers gain experience and drive without claims and

convictions, their premiums decrease Inexperienced drivers with driver training start at 10%

below entry level (Grid step -2) Each year without an at-fault claim, further -5% to

maximum 50% reduction to base or grid step 0 Each at-fault claim moves driver 5 steps up the grid Convictions and accident frequency develop surcharges

Factors Affecting Grid Rating• Years Licenced• At Fault accidents• Liability Limit • Territory – Territory divided into three categories:• (Calgary, Edmonton, Rest of AB)• This doesn’t mean that everyone in Calgary

is going to be on grid etc. • Just means grid premiums will change based

on which territory your in

0

Bad +

Good -

- 2 with driver training (stay 2 years before accumulating more experience)

Beginner

AF accident you go up the GRID 5+ spaces

- 3 years licenced

- 4 years licenced

+5AF accidents

-1Years claims

free

Michelle Dulmage

-5

Now you try!!

Think, Pair, Share:

Alex (40 years of age)– 24 years – no suspensions– 1 Vandalism claim – 2 years

ago– No convictions

Jane (38 years of age)– 22 years licenced– No suspensions– 1 Glass Claim – 1 years ago

***2 vehicles on the policy***

Think, Pair, Share:Brett (30 years of age)– 14 years – no suspensions– 2 minor convictions– No accidents

Penelope (27 years of age)– 11 years licenced– She has drivers training– No suspensions– No accidents or convictions

Think, Pair, Share:George (45 years of age)

– 29 years – no suspensions– 2 minor convictions– No accidents– No suspensions

Kelly (45 years of age)– 29 years licenced– 2 minor convictions– No accidents

Grace (17 years of age)– 1 year licenced– She has driver training– No accidents– No convictions

Thanks for all of your help. Myrna understands the coverage on her Alberta auto policy a lot better now…

Any questions?