ICBC and Optional Insurance (12:IV)

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This information applies to British Columbia, Canada. Last reviewed for legal accuracy by the Law Students' Legal Advice Program on August 2, 2022.

NOTE: The following portion of this chapter is meant to serve as a basic primer covering some of the key principles of the new ICBC system, which applies to claims for accidents occurring on or after May 1, 2021. Given that this no-fault system is new as of May 1, 2021, there are still certain portions of it that are being clarified, or that may adapt with implementation.

Optional Insurance Contracts (“OICs”) are additional optional coverage that any person can purchase at their discretion. These typically either extend the limits of existing coverage (under the same terms and conditions as the coverage that is being extended), or provide coverage that is not already provided for (IVA, s 61(1)). OICs can be purchased through private insurers or through ICBC.

The following are some of the common types of coverage and what they provide for, over and above the Basic Compulsory Coverage, that are commonly available for discretionary purchase. The below is merely meant to be an outline of common OIC types, and so it is critical to refer to your policy to understand the specifics of what is covered in your OIC.

A. Extended Third-Party Liability

Allows for an extension of third party liability coverage, on the same terms and conditions as the basic third party liability coverage.

B. Income Top-Up

Extends the upper limit of the coverage available under the income replacement benefit provided as part of basic coverage (i.e. if an insured has a pre-accident net income over $100,000 this top-up might provide them greater coverage under this benefit).

C. Own Damage Coverage

1. Collision

This insurance covers loss or damage to the insured vehicle resulting from upset or collision with another object, including the ground or highway, or impact with an object on or in the ground. This type of insurance is available with a wide choice of deductibles (IVR, s 150).

2. Comprehensive

This insurance covers loss or damage from any cause other than collision or upset. In addition to the Specified Perils listed below, this includes vandalism, malicious mischief, falling or flying objects, missiles, and impact with an animal. Comprehensive coverage is subject to various deductibles (IVR, s 150).

3. Specified Perils

This insurance is more limited than Comprehensive. It covers only loss or damage caused by fire, lightning, theft or attempted theft, windstorm, earthquake, hail, explosion, riot or civil commotion, falling or forced landing of an aircraft or part of an aircraft, rising water or the stranding, sinking, burning, derailment or collision of a conveyance in or on which a vehicle is being transported on land or water (IVR, s 150).

D. Loss of Use Coverage

Loss of Use coverage can be purchased only in conjunction with Own Damage (collision, comprehensive, or specified perils coverage). It provides reimbursement up to the limits purchased by the insured for expenses incurred for substitute transportation when a valid claim can be made under Own Damage coverage. Subject to the regulations, an insurer may provide for exclusions and limits of loss in an OIC, in respect of loss of use of the vehicle (IVA, s 65).

An OIC providing insurance against loss of use of a vehicle may contain a clause to the effect that, in the event of loss, the insurer must pay only an agreed portion of any loss that may be sustained or the amount of the loss after deduction of a sum specified in a policy. For such a clause to have legal effect, it must be printed in a prominent place on the policy and in conspicuous lettering contain the words “this clause contains a partial payment of loss clause” (IVA, s 67).

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