Difference between revisions of "ICBC and Compulsory Coverage (12:X)"

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 its opinion such assistance is necessary, and defend the insured against any action for damages (s 74).

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).

Certain conduct by the insured or applicant can result in “forfeiture”, whereby the insured is deemed to have given up his or her right to be indemnified by ICBC.  In this situation, the claim for indemnification becomes invalid.  Apart from exclusions, a claim may be forfeited under s 75 of the IVA if:

*a) an applicant for coverage falsely describes the vehicle for 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 that was required to be stated in the application (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); see [[{{PAGENAME}}#11. Breach of Conditions and Consequences | Section III.B.11. Breaches of Conditions and Consequences]];

*d) an insured makes a “wilfully false statement” with respect to a claim under a plan of insurance (s 75(c)).

'''NOTE''': According to [https://www.canlii.org/en/bc/bcsc/doc/1994/1994canlii3304/1994canlii3304.html?autocompleteStr=brooks%20v%20insurance&autocompletePos=3 Brooks v Insurance Corporation of British Columbia], 1994 CanLII 3304 (BC SC), per Bouck J, 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 inserted for the purpose of goading an insurer into action, are insufficient to deny coverage unless a fraudulent purpose on the part of the insured is shown.

However, ICBC may relieve the insured from forfeiture under s 75 if said forfeiture 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)).

Because there are 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: see Khatkar v Insurance Corporation of British Columbia (1993), 25 CCLI (2d) 243 (BC Prov. Ct.), per Stansfield Prov. Ct. J.