ICBC and Basic Compulsory Autoplan Coverage (12:X): Difference between revisions

Latest revision as of 17:47, 7 August 2024

This information applies to British Columbia, Canada. Last reviewed for legal accuracy by the Law Students' Legal Advice Program on August 6, 2024.

NOTE: The following portion of this chapter was written prior to April 30, 2021. Therefore, though it is written in the present tense, please be advised that it applies only to claims for accidents that occurred on or before April 30, 2021.

ICBC is the sole provider of basic insurance for non-exempt vehicles in BC. Exempt vehicles are described in sections 43–44 of the IVA and also in section 2 of the IVR. For most vehicles owned, leased, or operated in BC, third-party liability coverage up to $200,000 is only available from ICBC. Full coverage for exempt vehicles, extended coverage in excess of the basic coverage (third party liability insurance over $200,000, IVR, s 67), and collision (“own damage”) insurance may be purchased from either ICBC or from private insurers. Private insurers may have their own requirement for coverage that may be above and beyond the requirements of ICBC

Vehicles licensed in BC must carry basic compulsory coverage, evidenced by a certificate of automobile insurance issued under the IVA to someone licensed under the MVA (i.e., the “insured”).

NOTE: The definition of “the insured” varies somewhat from section to section in the IVA and IVR.

Driving while uninsured is an offence (MVA, s 24(3)(a)) which carries a maximum penalty of a fine of up to $250 and/or imprisonment of up to three months (MVA, s 24(5)(a)). Driving an uninsured vehicle is also an offence (MVA, s 24(3)(b)) which carries a fine of at least $300 and no more than $2,000 and/or imprisonment for at least seven days and no more than six months (MVA, s 24(5)(b)).

A. Scope of Coverage

Subject to various limitations and exclusions, basic compulsory coverage is set out in the IVR and provides the insured with:

Indemnity for third party legal liability (Part 6);
Accident benefits; no-fault benefits payable for death or injury (Part 7);
Coverage for damages caused by uninsured or unidentified motorists (Part 8);
First party coverage (Part 10). This includes:

Inverse liability (Division 1 of Part 10); and
Underinsured motorist protection (UMP) (Division 2 of Part 10).

B. Third Party Legal Liability: Part 6 of the IVR

1. Indemnity

This insurance indemnifies the insured against liability for the injury or death of another, and/or loss or damage to another’s property, up to $200,000 (IVR, s 67), to be shared among the victims of a motor vehicle accident (Schedule 3, s 1). The base limit of liability is $500,000 for buses and $300,000 for taxis or limousines. Extended Third Party Legal Liability coverage may be purchased. If the insured is found legally liable, and has no extended coverage, they are responsible for payment of any claims in excess of the above limits.

As of September 16, 2019, ICBC offers a new insurance category (blanket insurance certificate) for transportation network services (TNS) or ride-hailing companies. It provides coverage up to $1,000,000 third party liability when the vehicle is a) hailed by passengers through the online platform and b) is operated to transport the passengers (IVR, s 154). This blanket coverage is mandatory for ride-hailing companies, not for individual drivers.

2. Who is Covered

The definitions of “insured” for this part of the IVR may be found in IVR, s 63. For our purposes, the most relevant definitions of “insured” are:

(a) A person named as an owner in an owner's certificate;

(b) An individual who, with the consent of the owner or while a member of the owner's household, uses or operates the vehicle described in the owner’s certificate;

(c) Where the owner is deceased, the personal representative of the owner or a person having, with the consent of the personal representative, custody of the vehicle until the grant of letters probate or of administration to the personal representative; and

(d) Where the owner is not an individual:

(i) An officer, employee, or partner of the owner for whose regular use the vehicle described in the owner's certificate is provided; or

(ii) A member of the household of an officer, employee, or partner of the owner, who, with the consent of the owner, uses or operates the vehicle described in the owner's certificate.

3. Extension of Indemnity

According to IVR, s 65, indemnity is extended to an insured who operates a motor vehicle not described in an owner’s certificate issued to the insured (i.e., someone else’s car). For the purposes of s 65 only, “insured” includes the following:

(a) A person named as an owner in an owner’s certificate;

(b) A member of the owner’s household;

(c) An employee or partner of the owner for whose, regular use the vehicle described in the owner’s certificate is provided; and

(d) The spouse of an employee or partner described in paragraph (c) where the spouse resides with the employee or partner.

As of September 1, 2019, ICBC requires drivers to list out all the household members who may drive their vehicles, regardless of the number of times they may drive it, and non-household members who may drive the insured’s vehicle more than 12 times a year. The additional drivers are factored into the premium calculation.

See ICBC's webpage on who should be listed as a driver for more information.

If an unlisted driver is in an accident, ICBC can impose a financial penalty on the principal’s policy and a higher premium rate when the principal renews the policy in the future.

4. Restrictions on Indemnity

Section 65(2) of the IVR states that if an insured is operating a motor vehicle that is not described in an owner’s certificate issued to them, indemnity is not extended to the insured if:

The vehicle is operated in connection with the business of a garage service operator;
The motor vehicle is owned or regularly operated by the insured;
The motor vehicle is for commercial use.

For a TNS-only vehicle operated under a transportation network services authorization, the corporation's exemption applies only if injury or death of another, or loss or damage to property of another, arises out of the operation of the TNS-only vehicle when:

(a) The vehicle has been hailed by or for passengers through the use of the online platform to which the transportation network services authorization relates; and

(b) The insured is operating the vehicle for the purposes of picking up, transporting or dropping off those passengers;

(c) The motor vehicle is in fact not licensed under the MVA (or similar legislation) and the insured does not have reasonable grounds to believe the motor vehicle is licensed; or

(d) The insured is operating the vehicle without the consent of the owner and does not have reasonable grounds to believe that they have the consent of the owner.

Section 77 provides that an owner seeking to rely on the coverage provided for a vehicle not named in the owner’s certificate cannot do so if they also own (or lease) the non-described vehicle that has been involved in the accident (i.e. you cannot just insure one vehicle and expect this to cover all of the other vehicles in your fleet).

Garage service operators and their employees are not covered by the owner’s certificate issued for customers’ vehicles while the vehicle is in their care, custody, or control. “Garage service operator” is defined in Part 1 of the IVR as “the operator of a motor vehicle service facility and includes a dealer, service station operator, motor vehicle repairman, auto body shop repairman, wrecker operator, and the operator of a vehicle parking or storage facility” (s 57). To offset the effect of s 57, the garage service operator must obtain special coverage pursuant to s 150.

5. What is Covered

In addition to the legal liability coverage outlined above, IVR s 67 and 69 states that ICBC may also pay for:

(a) Reimbursement an insured for reasonable payments for emergency medical aid necessary to a person injured as the result of an accident for which indemnity is payable under this Part, if reimbursement is not provided to the insured under another Part or by another insurer;

(b) Costs incurred for fire extinguishers, jacks or other necessary emergency equipment or supplies provided to the insured;

(c) Pay that proportion of the costs taxed against an insured in an action respecting a claim under this Part that,

(1) The amount offered by the corporation as its total liability for indemnity to the insured under this Part in an offer to settle served in accordance with the Supreme Court Civil Rules bears to

(2) The aggregate of all special and general damages awarded in respect of the occurrence for which the claim is made;

(d) Pay

(1) Prejudgment interest under the Court Order Interest Act or similar legislation of another jurisdiction; and

(2) Post-judgment interest under the Interest Act (Canada) or similar legislation of another jurisdiction on that part of the judgment that is within the applicable limit set out in section 1 of Schedule 3; and

(e) If indemnity is provided to the insured under this Part and by one or more optional insurance contracts provided by an insurer other than the corporation, contribute to the payment of expenses, costs and reimbursements for which provision is made under section 172 in accordance with that other insurer's and the corporation's respective liabilities for,

(1) Damages awarded against the insured; or

(2) The amount payable under a settlement made on behalf of the insured.

6. What is Not Covered

ICBC will not indemnify an insured for:

Loss or damage to property carried in or on a vehicle owned, rented or in the care, custody or control of an insured (s 72.1); or
Liability arising out of the operation of attached equipment (which is not required for the safe operation of that vehicle) at a site where such equipment is operated, unless the attached equipment is used in accordance with the IVR (s 72(2)); or
Under Part 4, 6, 7, or 10 in respect of injury, death, loss or damage arising, directly or indirectly, out of radioactive, toxic, explosive or other hazardous properties of nuclear substances within the meaning of the Nuclear Safety and Control Act (Canada), s 56(1)(a)); or
Under sections 20 or 24 of the Act or section 49.3, Part 7 or Part 10 of the IVR in respect of any injury, death, loss or damage arising, directly or indirectly out of a declared or undeclared war or insurrection, rebellion or revolution (IVR, s 56(1)(b)); or
Under IVA, ss 20 or s 24, under IVR, ss 49 or 49.3(1)(b), Part 6 or Part 10 in respect of punitive or exemplary damages or other similar non-compensatory damages (IVR, s 56(1)(c)); or
Assessments, penalties or premiums, payable under the Workers’ Compensation Act (British Columbia) or similar Act (IVR, s 72.1(1)(a)).

7. Duties of the Insured

An insured has a duty to report to ICBC mid-term changes, as required by s 9 of the IVR. These changes may result in an increase or decrease in the premiums paid to ICBC. The insured named in the owner’s certificate is obligated to report to an ICBC agent the following:

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(1) In this section, "the territory in which the vehicle is primarily located when not in use" means the territory in which the place where the vehicle is kept when not being driven is located.

(2) The insured named on an owner's certificate must,

(a) within 10 days after

(i) the insured's address is changed from the address set out in the certificate, or

(ii) the insured acquires a substitute vehicle for the vehicle described in the certificate, or

(b) before

(i) the use of the vehicle described in the certificate is changed to a use to which a different vehicle rate class applies than the vehicle rate class applicable to the use set out in the certificate, or

(ii) a vehicle in respect of which the premium is established on the basis of the territory in which a vehicle of that vehicle rate class is used or principally used, as the case may be, is used or principally used in a different territory than that set out in the certificate,

report the change of address, vehicle, use or territory to a person referred to in section 3, and pay or be refunded the resulting difference in premium.

(3) If the premium for a vehicle is established on the basis of the territory in which the vehicle is primarily located when not in use and that territory as set out in the owner's certificate is changed, the insured named on the certificate must, unless the vehicle is being used by the insured for vacation purposes, report the change to a person referred to in section 3 within 30 days of the change, and pay or be refunded the resulting difference in premium.

Furthermore, ICBC is not liable to indemnify an insured who, to the prejudice of ICBC, fails to comply with duties outlined in s 73 of the IVR:

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(1) An insured must

(a) promptly give the corporation written notice, with all available particulars, of

(i) any accident involving death, injury, damage or loss in which the insured or a vehicle owned or operated by the insured has been involved,

(ii) any claim made in respect of the accident, and

(iii) any other insurance held by the insured providing coverage for the accident,

(b) on receipt of a claim, legal document or correspondence relating to a claim, immediately send the corporation a copy of the claim, document or correspondence,

(c) cooperate with the corporation in the investigation, settlement or defence of a claim or action,

(d) except at the insured's own cost, assume no liability and settle no claim, and

(e) allow the corporation to inspect an insured vehicle or its equipment or both at any reasonable time.

(2) The corporation is not liable to an insured who, to the prejudice of the corporation, fails to comply with this section.

8. Duties of the Corporation

On receipt of a notice of a claim under Part 6 of the IVR, ICBC must, at its expense, assist the insured by investigating and negotiating a settlement where, in their opinion, such assistance is necessary, and defend the insured against any action for damages (s 74).

9. Rights of the Corporation

Upon assuming the defence of an action for damages brought against an insured, ICBC has the right, subject to section 79 of the Act, to the exclusive conduct and control of the defence. This right includes, but is not limited to, the right to appoint and instruct counsel, to admit liability, to negotiate, and/or settle out of court (IVR, s 74.1).

10. Forfeiture of Claims and Relief from Forfeiture

Certain conduct by the insured or applicant can result in “forfeiture”, voiding their right to be indemnified by ICBC. In this situation, the claim for indemnification becomes invalid. A claim may be forfeited under s 75 of the IVA if:

(a) An applicant falsely describes the vehicle in respect of which the application is made to the prejudice of the insurer (s 75(a)(i));

(b) An applicant for coverage knowingly misrepresents or fails to disclose a fact required to be stated (s 75(a)(ii));

(c) An insured violates a term or condition of or commits a fraud in relation to the plan or the OIC (s 75(b), or makes a "willingly false statement regarding the claim (s 75(c)); see Section X.B.11: Breach of Conditions and Consequences.

NOTE: According to Brooks v Insurance Corporation of British Columbia, 1994 CanLII 3304 (BC SC), the purpose of s 19(1)(e) (now IVA, s 75(c)) is to prevent intentionally deceitful misstatements for the purpose of defrauding the insurer. “Exaggerated guesses” by an insured as to the value of a lost motor vehicle, or figures meant to prompt an insurer into action, are insufficient to deny coverage without demonstrated fraudulent purpose.

However, ICBC may relieve the insured from forfeiture under s 75 if it would be “inequitable”. Furthermore, ICBC must relieve an insured from forfeiture if: a) it is equitable to do so, and b) the insured dies or suffers a loss of mind or bodily function that renders the insured permanently incapable of engaging in any occupation for wages or profit (IVA, s 19(3)).

Due to the various definitions of “insured” in the IMVAR and IVR, the only reasonable interpretation of s 19 (the relief of forfeiture provision discussed above) is that it is to be read broadly to include all of the definitions (Khatkar v Insurance Corporation of British Columbia (1993), 25 CCLI (2d) 243 (BC Prov. Ct.), per Stansfield Prov. Ct. J).

11. Breach of Conditions and Consequences

Insured persons must abide by the terms and conditions of their plans and OICs. Coverage may be lost if an insured breaches certain conditions, including, but not limited to:

(a) Failing to comply with s 73 of the IVR, to the prejudice of ICBC;

(b) Operating a vehicle when not authorized and/or not qualified to do so by law (IVR, s 55(3)(a));

(c) Using the vehicle in illicit trades, racing, or to escape or avoid arrest or other similar police action (IVR, s 55(3)(b), (c) and (d));

(d) Towing an unregistered and/or unlicensed trailer (IVR, s 55(4));

(e) Using the vehicle for a different purpose than the one declared by the insured in their application for insurance, except as “occasionally” permitted (IVR, s 55(2(a)); or

(f) Naming in the owner’s certificate someone as the principal operator of the insured vehicle who is not actually the principal operator (IVR, s 75).

NOTE: When the court determines who the principle driver is, it will consider the entire period covered by the insurance plan (Dehm v Insurance Corporation of British Columbia, 1981 CanLII 608 (BC SC)).

Despite any breach of condition by an insured, insurance money is still payable to third parties by ICBC in cases where the insured was:

(a) Incapable of properly controlling the vehicle because of the influence of alcohol or drugs;

(b) Convicted under any one of the following sections of the Criminal Code, RSC 1985, c C-46 (see also MVA Regulations, s 28.01 Table 4):

s 220 (criminal negligence causing death);
s 221 (criminal negligence causing bodily harm);
s 236 (manslaughter);
s 249 (dangerous operation of a motor vehicle);
s 252(1) (failure to stop at an accident);
s 253 (driving while impaired or with a blood-alcohol level exceeding 80 milligrams per 100 millilitres);
s 254(5) (refusal or failure to give a breath sample);
s 255 (impaired driving causing bodily harm or death);
s 259(4)(driving while disqualified);
a conviction under the Youth Criminal Justice Act (Canada) for any of the above offences;
“similar result” or conviction of these offences in a jurisdiction in the U.S.; or
a conviction under s 95 or 102 of the MVA or similar convictions under another Canadian or American jurisdiction (both concern driving while prohibited); or

(c) permitting another person to use the insured vehicle in a way that results in a conviction for any of the offences outlined above (IMVA Regulations, s 55).

C. Uninsured or Unidentified Motorists (Hit and Run) Cases

1. Exclusion of ICBC Liability in Uninsured or Unidentified Motorist Cases

There are certain situations where ICBC will not be liable to pay a claim made under section 20 and/or section 24 of the IVA. ICBC will not be liable:

To a claimant, under s 24 of the IVA, who fails to comply with section 107(1) of the IVA without reasonable cause;
To a claimant, under s 20 or 24 of the IVA, for loss or damage arising while the vehicle was in the claimant’s possession without the owner’s consent (i.e., stolen) (IVR, s 107(2)(a)).

2. Forfeiture and Breach of Conditions in Uninsured and Underinsured Motorist Cases

The same provisions apply as those outlined under Section X.B.10: Forfeiture of Claims and Relief from Forfeiture and Section X.B.11: Breach of Conditions and Consequences, above. These are contained in s 19 of the IVA and s 55 of the IVR.

3. Underinsured Motorist Protection (UMP): Part 10, Division 2 of the IVR

a) What is UMP Coverage?

UMP coverage, part of the basic compulsory coverage, provides $1,000,000 in compensation against bodily injury or death for the victim of an accident caused by a motorist who does not carry sufficient insurance. The maximum coverage under UMP is $2,000,000 (which an insured must pay an extra premium to purchase) for each insured person (Schedule 3, s 13 of the IVR). This limit includes claims for prejudgment and post-judgment interest and costs. See section 148.1(5).

b) Prerequisites for UMP Coverage

Generally, UMP coverage is available where an insured’s death or injury is caused by the operation of a vehicle operated by an underinsured motorist, and occurs in Canada or the U.S.

If an insured is making a claim for UMP coverage in relation to a hit and run accident, there are additional requirements that need to be met (s 148.1(4)):

The accident must occur on a highway; and
The accident must have physical contact between the insured vehicle and the unidentified vehicle, if it occurred in Nunavut, the Yukon Territory, the Northwest Territories, or the United States.

c) Who is Covered?

Under section 148.1 IVR, “insured” includes, but is not limited to:

A person named in the owner’s certificate and members of their household;
Any person who is an occupant of the insured vehicle;
Any person with a valid BC “driver’s certificate” (i.e., driver’s license) and members of their household; and
Any person entitled, in the jurisdiction in which the accident occurred, to maintain an action against the underinsured motorist for damages because of the death of one of the insured.

d) Who is Not Covered?

Section 148.1(3) of the IVR describes when ICBC will not be liable. Some limitations include:

The insured’s vehicle was not licensed, and the insured had no reasonable grounds to believe it was; or
The vehicle’s operator or passenger did not have the owner’s consent to operate or be in the vehicle and ought to have known there was no consent (i.e., the operator or passenger is in a stolen vehicle).

e) UMP Coverage and Accidents Outside BC

For accidents occurring outside BC, the law of the place where the accident occurred determines the legal liability of an underinsured motorist, whereas the amount of the UMP claim is determined by BC law. See section 148.2(6) of the IVR.

UMP protection does not apply in a jurisdiction where the right to sue for injuries caused by a vehicle accident is barred by law (IVR, s 148.2(4)) or to vehicles used as buses, taxis, or limousines (s 148.4).

f) Forfeiture and Breach of Conditions

Under section 148.2(5) of the IVR, the same provisions that apply to those outlined under Third Party Legal Liability also apply here (see Section XI.B.10: Forfeiture of Claims and Relief from Forfeiture and Section XI.B.11: Breach of Conditions and Consequences, above.). An award otherwise available under UMP will be reduced by any amount forfeited by a breach outlined in s 55.

g) Dispute Resolution

Disputes between claimants and ICBC, and the reasons for the decision must be published (IVR, s 148.2(1.1) and ((2.1)).