Wednesday 6 February 2013

Insurance News - Wednesday, February 6, 2013

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Wednesday, February 6, 2013:

Judge Rules Auto Insurer Must Defend Policyholders Even After Paying Policy Limits

A recent Ontario Superior Court ruling has created some confusion regarding an insurer's responsibility to defend a policyholder in an action.  The confusion is the result of language used in the Insurance Act and the standard Ontario Automobile Policy (OAP 1).

Section 245 of the Insurance Act states:

Every contract evidenced by a motor vehicle liability policy shall provide that, where a person insured by the contract is involved in an accident resulting from the ownership, or directly or indirectly from the use or operation of an automobile in respect of which insurance is provided under the contract and resulting in loss or damage to persons or property, the insurer shall,

(a)  upon receipt of notice of loss or damage caused to persons or property, make such investigations, conduct such negotiations with the claimant and effect such settlement of any resulting claims as are deemed expedient by the insurer
(b)  defend in the name and on behalf of the insured and at the cost of the insurer any civil action that is at any time brought against the insured on account of loss or damage to persons or property;
(c)  pay all costs assess against the insured in an civil action defended by the insurer and any interest accruing after entry of judgment upon that part of the judgment that is within the limits of the insurer’s liability;
(d)  where the injury is to a person, reimburse the insured for outlay for such medical aid as is immediately necessary at the time.
The OAP 1 which is intended to provide a plain-language description of the law states:

3.3.1  If Someone Sues You
By accepting this policy you and other insured persons irrevocably appoint us to act on your or their behalf in any lawsuit against you or them in Canada, the United States of America or any other jurisdiction designated in the Statutory Accident Benefits Schedule arising out of the ownership, use or operation of the automobile.
If someone sues you or other insured persons insured by this Section for losses suffered in an automobile incident, we will provide a defence and cover the costs of that defence, including investigation costs. We will pay all legal costs the court assesses against you and other insured persons in the lawsuit we have defended.
If there is a judgment against you or other insured persons, we will pay any post-judgment interest owed on that part of the amount the court orders that falls within the liability limits of your policy.
We reserve the right to investigate, negotiate and settle any claim out of court if we choose.
If you are sued for more than the limits of your policy, you may wish to hire, at your cost, your own lawyer to protect yourself against the additional risk.
The Judge noted that the Insurance Act provides no qualifications with regards to defending a policyholder who has been sued while the OAP 1 indicates that the policyholder is expected to hire a lawyers if sued for more than the policy limits.  Since the Act takes precedence over the policy language, the insurer was held to be fully responsible to defend the policyholder in this case. 

 In this particular case Jevco Insurance has written an auto insurance policy for Vishal Malaviya, who was sued as a result of an auto accident in October 2005. In 2008, after hiring a lawyer who filed a statement of defence for Malaviya, Jevco offered to pay $200,000, which was the limit of Malaviya's policy, to the party suing Malaviya.

The action against Malaviya was still proceeding, so Jevco applied to the court to get a declaration it has "has no continuing duty to indemnify or defend" Malaviya, who argued that the policy "requires a full defense ... until it is tried on the merits or a final settlement is reached."
 

Monday 4 February 2013

Studies Confirm that Multitasking, Such As Driving And Texting, Affects Performance

Zheng Wang, assistant professor of communication at Ohio State University, has conducted considerable research on multitasking. One study she conducted in 2012 indicated that multitasking hurts performance, but makes people feel better.  “There’s this myth among some people that multitasking makes them more productive,” according to Wang.  She noted that “they seem to be misperceiving the positive feelings they get from multitasking. They are not being more productive – they just feel more emotionally satisfied from their work.”

The study appears in the Journal of Communication.

Another study she conducted in 2012 has significant implications for distracted drivers.  Her research indicated that trying to do two visual tasks at once hurt performance in both tasks significantly more than combining a visual and an audio task.  So a driver who is texting on their phone is likely more “impaired” than if they were speaking on their phone.  They are both dangerous but the research showed that texting is much more dangerous.

But what’s really scary is that when people who tried to do two visual tasks at the same time were asked to rate their performance they rated themselves as better than those who combined a visual and an audio task.  In fact, their actual performance was worse.

The study appears in the journal Computers in Human Behavior.

Another recent study showed that those who frequently multitask are actually bad at it.  The study by Professor David Strayer and  Professor David Sanbonmatsu, both at Utah University, shows that people who frequently talk on their cellphone while driving are probably the ones who shouldn’t be doing it.  Their perception is that they are good at multitasking.

The study indicated that those who scored highest on the ability to multitask tended not to engage in it because they were more able to focus attention on what they are doing.

Their study is available on an online journal PLOS ONE.

Recently a woman distracted by a text fell feet-first into a frozen canal in Birmingham — and the entire incident was caught on tape by one of England's many CCTV cameras. This vividly illustrates have difficult it is to multitask.  What would have been the outcome has she been driving instead of walking?



So what is this all mean?  Distracted drivers are a greater hazard than they realize.  They do not believe that texting or talking on their phone impairs their driving ability and those who are worst at doing both are actually more likely to multitask.

Insurance News - Monday, February 4, 2013

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, February 4, 2013: