Registered Insurance Brokers of Ontario (RIBO) Practice Exam

What is the limitation regarding newly acquired automobiles under the OAP 1 Owner's Form?

1. Coverage is provided for unlimited time

2. Coverage is automatically limited to 14 days

3. Coverage is only for liability claims

4. No coverage is provided for newly acquired vehicles

The correct answer is: Coverage is automatically limited to 14 days

The correct choice highlights that coverage for newly acquired automobiles under the OAP 1 Owner's Form is automatically limited to 14 days. This provision is designed to ensure that drivers are aware that while they may acquire a new vehicle, there is a time-sensitive window within which they can operate it under their existing automobile insurance policy without needing to inform their insurer. After this 14-day period, coverage for the newly acquired vehicle ceases unless the policyholder has notified their insurance company to add the vehicle to their policy. This limitation serves to encourage timely communication with the insurer regarding any changes in vehicle ownership, which is crucial for maintaining adequate coverage. The other options do not accurately describe the limitation. For instance, stating that coverage is provided for an unlimited time fails to acknowledge the important time constraint inherent in the policy. Similarly, claiming that coverage is only for liability claims overlooks the fact that comprehensive and collision coverages may also apply within those 14 days, provided they are part of the existing policy. Lastly, the notion that no coverage is provided at all for newly acquired vehicles disregards the temporary coverage allowed for a brief duration.