ICBC and Compulsory Coverage (12:X)

The IVA makes ICBC the sole provider of basic insurance for non-exempt vehicles in BC Exempt vehicles are described in ss 43 – 44 of the IVA and also in s 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. See Section III: Optional Insurance. Note that private insurers may have their own requirement for coverage that may be above and beyond the requirements of ICBC.

Vehicles licensed in BC are required by law to carry basic compulsory coverage, which is 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);
• 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 imposed on the insured by law for the injury or death of another, and/or loss or damage to another’s property, to a total limit of $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 in claims made for a bus, and $300,000 in claims made for a taxi or limousine. Extended Third Party Legal Liability coverage may be purchased at the insured’s discretion. (See Section III: Optional Insurance). If the insured is found legally liable, and no extended coverage has been purchased, he or she is responsible for payment of any claims in excess of the above limits.

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 in an owner’ s certificate; or
• b) an individual who operates the vehicle described in the owner’s certificate with the consent of the owner; or
• c) an individual who operates the vehicle described in the owner’s certificate while being a member of the owner’s household.

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, where their regular use of the vehicle described in the owner’s certificate is provided for; and
• d) the spouse of an employee or partner described in paragraph (c) where the spouse resides with the employee or partner.

Note that, absent this expanded definition, “insured” would not otherwise cover a member of the insured’s household operating a vehicle not described in an owner’s certificate issued to the insured.

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 him or her, indemnity is not extended to the insured if:

• the insured is operating the motor vehicle 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 used for carrying passengers for compensation or hire or for commercial use;
• 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
• the insured is operating the vehicle without the consent of the owner and does not have reasonable grounds to believe that he has the consent of the owner.

Section 77 provides, in part, that an owner seeking to rely on the coverage provided for a vehicle not named in the owner's certificate cannot do so if he or she also owns (or leases) 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).

Neither garage service operators nor their employees are covered by the owner’s certificate issued for customers’ vehicles while the vehicle is in the care, custody, or control of the garage service operator or his or her employee for a purpose relating to the business. “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 (i.e. s 65 indemnification) outlined above, IVR ss 67 and 69 states that ICBC may also pay for:

• a) “reasonable” emergency medical aid, so long as reimbursement is not provided to the insured by another insurer or under another Part;
• b) emergency equipment or supplies provided to the insured (i.e. fire extinguishers, jacks or other necessary emergency equipment or supplies);