Vehicle Insurance is mandatory in almost every country. The majority agrees that this is a good idea as it protects everybody on the road. There is usually mandatory coverage that one needs to get to protect those around them. However, we can always add more types of coverage for more protection. This is all legally regulated.
We are going to talk about the Vehicle Insurance Act in Canada and what that truly means. Insurance involves a lot of money, damages, and accidents that can be life-threatening. Therefore, it is of great importance that the government issues laws which would regulate it. As long as everyone follows legal requirements, the roads are going to be much safer for all.
If you would like to learn more about insurance in general, make sure to visit one of the best insurance marketplaces online, Surex!
What is the Insurance Act?
The government of Alberta issued an Insurance Act covering legal requirements regarding vehicle insurance. All citizens and visitors must follow the regulations listed in the Vehicle Insurance Act.
It is of great importance that all insurance companies and their customers respect the Act. Doing anything that is against this Act could result in a fine or another strict sanction.
Make sure to follow the law, and stick around because we are about to get into the details of the Act!
Insurance Companies’ Licenses
There are a couple of sections in the Vehicle Insurance Act that regulate how insurance companies should operate their business. To make sure that everything is legal and fair, there are quite a few requirements that they have to meet.
To get licensed or to renew their license, insurance companies must prepare a file for the Minister or the body of law assigned by the Minister. They have to present them with:
- A record of all previous premiums;
- Any other documents required by the Minister.
The Minister usually assigns a statistical agency to compile all the data and present them with it. All licensed insurers must inform the Minister about any changes they make regarding their business operations.
Moreover, the Minister has the jurisdiction to revive the licenses of federally authorized companies before their license expires. The Minister can also cancel a company’s license when the company requests cancellation or if they do anything that is against the law.
Apart from the insurance companies, there are numerous insurance brokers or specialists, who’s primary goal is to help you find the best insurance possible. They usually partner with many insurers to provide their customers with several options.
Like everything else, their business is also legally regulated. Insurance brokers must file a request and ask the Minister to allow them to operate their business.
There are specific terms and conditions in the Act that relate to this type of business. If all of these terms are met, the Minister will most likely issue a permit allowing them to work.
Insurance Brokers’ Licenses generally expire on December 31 and must be renewed by the guidelines given by the Minister.
According to the Insurance Act, a claimant is a person who says that they have certain rights over the other driver (who is not insured) in an accident. Driving without insurance is illegal, and the person doing this can face legal consequences.
Having Liability insurance that protects other drivers is mandatory. An insurance company will cover for damages to their client, but will most probably send a notice demanding reimbursement from the uninsured driver.
If that person refuses to pay, the following can happen:
- Their driver’s license can be revoked,
- They can be legally prosecuted,
- Their vehicle can be suspended.
Application for Insurance
Under this Act, there is a section instructing the possible insurance users on how to apply for any kind of insurance policy and permit.
Firstly it states that the application can be submitted to an agent or an insurance company named by that same Act. Of course, the applicant must pay for the policy to the corporation that will issue a certificate.
Premiums for Certificates
There is a section by the same name in the Insurance Act under which the insurance companies have an obligation to issue premiums. It includes a great number of factors that the companies are allowed to consider. We are going to mention some of those:
- The location of the person and the vehicle using the given premium
- Details of the vehicle, such as the type or class of the car, how it is used, how much is it used, etc.
- The amount of Third-Party Liability coverage
- Whether the insured vehicle will be used by multiple people who are in a particular relationship with the insured, such as family members or an employer-employee relationship
- Information about the applicant such as:
- How many years they have been driving
- The nature of their business
- History of their driving including accidents, claims, etc.
- Any violations and offenses they might have
- Prescribed criteria
- Any other criteria
Who Makes the Regulations?
The Lieutenant Governor in Council makes regulations under any part of the Insurance Act. We are going to list several things that they have the power to do:
- Establishing the obligatory insurance coverage that drivers must get
- Determining terms and conditions regarding the insurance
- Authorizing the collection of personal information of the person looking for insurance
- Determining the duration of the insurance period, including the effective and expiry dates
- Prescribing the rights that the insurer and the driver have in case of an accident
- Allowing insurance companies to determine fees and additional charges according to their estimate
- Determining the deductible amount which applies to certain property damages.
The Insurance Vehicle Act is of utmost importance because it helps regulate any issues that may occur in this regard. It discusses the rights and obligations of insurance companies, drivers, uninsured drivers, and other groups. The Act consists of many parts, which is why you should read them thoroughly before making any insurance decisions.
Always follow the law, and make sure to check what rights you have! By now you might have gauged that getting insurance is not a piece of cake after all.