Registered Insurance Brokers of Ontario (RIBO) Practice Exam

If an insured belongs to a car pool, which statement regarding coverage against claims from passengers for injuries is correct?

1. The standard policy requires an additional endorsement

2. The insured is automatically covered by the standard policy

3. Only the driver is covered for liability

4. Coverage only applies if the passengers are family

The correct answer is: The insured is automatically covered by the standard policy

The correct statement regarding coverage against claims from passengers for injuries in the context of an insured belonging to a carpool is that the insured is automatically covered by the standard policy. Typically, standard automobile insurance policies in Ontario provide liability coverage, which includes protection against claims from passengers in the event of an accident. This means that if an insured person is involved in an incident while carrying passengers in a carpool, the insurance policy will typically cover liability claims made by those passengers without the need for additional endorsements or specific exclusions regarding non-family members. The rationale for this coverage aligns with the general purpose of auto insurance, which is to provide liability protection regardless of the relationship between the driver and passengers, as long as the policyholder is complying with all other terms and conditions of the insurance policy. In other contexts, additional endorsements could modify coverage, but the basic coverage for passenger liability is usually included. Coverage limitations typically are not based solely on familial relationships, but rather on situations that relate to the operation of the vehicle and compliance with applicable laws.