Is my car insured?

Is my car insured? How do I know?

You have obvious proof of insurance with your liability or pink card. This declares that a certain vehicle is insured at a certain time by a certain insurance company.

Usually you have gone to an agent or broker and set up an insurance policy for this vehicle. You have decided what limit you will purchase for Public Liability and Property Damage (PLPD). This is the minimum insurance for you to drive that vehicle down the road. When you have signed the application the agent will give you a temporary liability card.

Depending on which province or territory you live in this might also include the plate registration. In places where the registration is separate from the insurance you will have to provide proof of insurance to get your plates. Some provinces require an inspection on all vehicles as well.

If you have not misrepresented yourself and keep your payments up on the insurance then you should have no doubts that you have legal insurance in place and can drive your car. If you have lied and the insurance underwriter determines that you are unacceptable your insurance can be declared null and void from the point of application. So tell the truth, the records are there so it is better to be forthcoming.

It is important that you notify your agent or broker if you move. If a change in your status does occur then there has to be a way to get in touch with you. Legally your policy can be canceled with a registered letter sent to your last known address and there is not a requirement that you pick up the letter. A quicker form of cancel is when you are served notice in person but that does not happen often.

Where it can get a bit interesting is if you just want some temporary insurance. The best method is to call your agent or broker and have insurance "bound" for the few days you require. This is commonly done. You call the agent and give them the particulars of the vehicle. You need to know the year, make and serial number. The agent can then ask the insuring company to give you a few days coverage without the formality of adding the vehicle to the policy. You get a temporary liability card, arrange for registration and you are legally traveling down the road.

Newly Acquired Vehicle

In Alberta the Alberta Standard Automobile Policy SPF 1 has clear definitions of a "Newly Acquired Vehicle". The wordings for under sections A (Third Party Liability), B (Accident Benefits), C (Loss of or Damage to Insured Automobile) read, "an automobile, ownership of which is acquired by the insured and, within fourteen days following the date of its delivery to him, notified to the the Insurer in respect of which the insured has no other valid insurance, if either it replaces an automobile described in the application or the Insurer insures (in respect of the section or subsection of the Insuring agreements under which claim is made) all automobiles owned by the Insured at such delivery date and in respect of which the Insured pays any additional premium required; provided however, that insurance hereunder shall not apply ir the insured is engaged in the business of selling automobiles".

This wording is very important. A recent situation occurred when an insured placed insurance on Vehicle A on a Wednesday. At the time the insured stated that he owned another vehicle (Vehicle B) and would likely place insurance on it in the near future. On Friday, two days later the RCMP call asking to confirm insurance. The insured is driving Vehicle B. The RCMP have phoned the seller and confirmed that the vehicle was indeed purchased the Monday, two days before the insurance was put in the place on Vehicle A.

Is Vehicle B insured? It would appear that it is not. It appears that the insured has taken the plates from Vehicle A and put them on Vehicle B. The information that is not given in this question is when was the vehicle delivered? It turns out that Vehicle B was purchased on the Monday. The tricky bit is that the insured did not take delivery of the vehicle until the Friday. The new policy on Vehicle A was put in place on Wednesday. So yes, Vehicle B is legally insured under the Standard Automobile Policy SPF 1 as a Newly Acquired Automobile.

Temporary Substitute Vehicle

Let us now consider the Temporary Substitute Vehicle where the wordings apply to less coverage, sections A (Third Party Liability) and B (Accident Benefits) only read, "an automobile not owned by the insured, nor by any person or persons residing in the same dwelling premises as the Insured, while temporarily used as the substitute for the described automobile which is not in use by any person insured by this Policy, because of its breakdown, repair, servicing, loss, destruction or sale".

There are further limitations on substitute vehicle which include the following:

  • It must be a private passenger or station wagon type.
  • The insured has to be an individual or man and wife.
  • The vehicle cannot be used in connection with the business of selling repairing, maintaining, servicing, storing or parking automobiles.
  • The vehicle cannot be owned or regularly or frequently used by the Insured or by any person or persons residing in the same dwelling premises as the Insured
  • The vehicle is not owned, hired, or leased by an employer of the Insured or by an employer of any person or persons residing in the same dwelling premises as the Insured.
  • Such other automobile is not used for carrying passengers for compensation or hire or for commercial delivery.

The car insurance coverage for the situation when the Insured is a corporation, unincorporated association or registered co-partnership, any automobile of the private passenger or station wagon type, other than the described automobile, while personally driven by the employee or partner for whose regular use the described automobile is furnished, or by his or her spouse if residing in the same dwelling premises as such employee or partner, provided that the same limitations that we just listed are observed.

This information is useful if you cannot reach your agent or broker. If you can contact the agent or broker then do so. Give the particulars of your situation. If a claim does occur then the agent will have noted your file and there is no ambiguity about coverage. A claim takes long enough to process when it is straight-forward. Do not muddy the waters.