Registered Insurance Brokers of Ontario (RIBO) Practice Exam

Under the Third Party Liability coverage of an automobile policy, which of the following would NOT be covered?

1. A passenger in the auto.

2. The named insured.

3. Someone who has permission to drive the auto.

4. Someone who has taken the insured automobile without consent.

The correct answer is: Someone who has taken the insured automobile without consent.

The correct answer is that someone who has taken the insured automobile without consent would not be covered under Third Party Liability coverage. This coverage is designed to protect the insured party from claims made by third parties for bodily injury or property damage for which the insured is legally liable. In this context, Third Party Liability coverage applies to situations where the insured or another authorized user of the vehicle is responsible for damages or injuries to others. A passenger in the auto, the named insured, or someone with permission to drive the auto are all covered because they have a legitimate interest and legal approval to be operating or riding in the vehicle. However, a person who takes the automobile without consent is engaging in an illegal act (often referred to as a theft or unauthorized use) and does not have any legal standing to claim coverage under the policy. The insurance policy is designed to protect against liabilities incurred by lawful users, thus excluding individuals acting outside the bounds of permission or legality. This delineation is crucial for maintaining the integrity of insurance coverage and ensuring the financial responsibility of those who act within legal and permitted use.