Introduction to ICBC Automobile Insurance (12:I)
The automobile insurance system in BC is comprised of “no fault” benefit claims and indemnification for claims in tort law. No fault benefits are included as part of the basic (compulsory) insurance coverage offered by the Insurance Corporation of British Columbia (ICBC or “the Corporation”) exclusively. As the name implies, payment of the no fault coverage is given regardless of whether or notany element of fault is attributed to the insured. Optional coverage above and beyond the basic coverage may be purchased from either ICBC or a private insurer under an optional insurance contract (“OIC”).
Claims for damages brought under tort law however do require the presence of a fault element on the part of the defendant to be successful. The victim of the accident (e.g. a personal injury claimant) may sue the other driver(s), the owner(s) of the insured car, manufacturer(s), automobile shop(s), municipal, insurer(s), or any other parties liable for the injury. Legislatively, there is no limitation on the maximum amount of damages that a court could award to a victim. However, case law and statute in the province may effectively cap certain heads of damage, such as non-pecuniary damages. Where the necessary conditions are met, ICBC may indemnify the insured for all or part of the assessed liability. This means that where damages are awarded to a victim in an accident, ICBC will pay those damages instead of the party (i.e. the insured) who is at fault.
For cases involving a BC resident who has been involved in an out-of-province accident, private international law rules apply. Generally, for the substantive issues, the law of the jurisdiction where the accident took place will apply. For procedural matters, the rules of the trial court will apply. It is important to determine whether the action is one that can be commenced in BC and whether the law of BC applies. A summary of out-of-province insurer qualifications, service procedures, and jurisdictional considerations is listed in Section VI.
The Insurance (Vehicle) Act [IVA] and the Insurance (Vehicle) Regulation [IVR] form a code governing most aspects of auto insurance in BC. The IVR alone runs 102 pages, and it is impossible to give a complete summary in a manual such as this. This chapter is only a guide to help people locate the relevant sections of the IVA and IVR that they are likely to encounter. A few preliminary concepts, which will be of use in understanding this chapter, are discussed immediately below.
Drivers purchase car insurance to protect themselves in the event that they are found liable for damages. If the necessary preconditions are met, ICBC assumes liability for payment of benefits or damages to the claimant or victim of a car accident. Instead of the insured paying the damages claimed, the insurance company, here ICBC, “indemnifies” the insured.
This is a common feature of insurance contracts. When ICBC assumes liability for payment of benefits or damages of any kind on behalf of the insured, ICBC is ‘subrogated’ to the right of recovery that the insured had against any other person (IVA, s 84), i.e., ICBC has all remedies available to it that the insured person might have exercised by him or herself (IVA, s 83).
Premiums are regular payments made by the insured to ICBC Premiums are based on: where the insured lives, how the vehicle is used, the type of vehicle, and the insured driver’s claim record. Customers can vary their premiums by increasing or decreasing their deductibles, as well as the extent of their optional coverage. Experienced drivers may receive discounts up to 43 percent on insurance plans. There is an informal discount review body created by corporate policy to ensure that discounts are appropriately awarded, but this body was not created for the purposes of hearing formal appeals.
The point penalty system is authorized by ss 210 and 211 of the MVA. Section 28.02 of the MVA Regulations outlines the various breaches and/or offences of the MVA and the corresponding point penalties recorded. The number of points, beyond the set limits, that accumulated during the first year is taken into account when fixing premiums.
Section 85 of the IVA allows ICBC to either generally, or for a particular case, waive a term or condition of an insurance contract (also known as “the plan”). However, in order for a term or condition to be waived, the waiver must be in writing and signed by an ICBC officer.
B. Application of the Current Legislation, and Transitional Provisions
On June 1, 2007, the IVA and accompanying IVR were amended. Transitional provisions in Parts 1, 4, and 5 of the IVA dictate which regime, old or new, will apply to a particular claim (ss 1.2, 58, and 74 respectively).
Generally, it is safe to say that the IVA and the IVR, taken as a whole, apply to:
- Insurance policies under the universal compulsory vehicle insurance plan set out by the Act (the “plan”) that take effect on or after June 1, 2007;
- Optional insurance contracts that take effect on or after June 1, 2007;
- Any claims that arise under these insurance plans or contracts; and
- Insured persons, and insurers, and ICBC in relation to these insurance plans or contracts.
- NOTE: The critical time to look at is the date on which the individual insurance policy or contract came into effect, or was renewed.
Claims and parties to the claims in relation to an insurance policy that came into effect before June 1, 2007 will continue to be governed by the old IMVA and IMVAR. It is entirely possible for a single accident to trigger the operation of both the old and new Acts simultaneously, (albeit in relation to different aspects of the resultant legal issues).
Although the IVA and IVR cover both ICBC and private insurer plans, some parts of the Act and Regulation apply only to one or the other. Specifically, the parts of the Act and Regulation that govern ICBC are Parts 1, 2, 3, 5, and 6 of the Act and Parts 1, 2, 3, 4, 5, 6, 7, 8, 10, 11, 12, and 14 of the Regulation. The parts of the Act and the Regulation that govern the private insurers are Parts 4, 5, and 6 of the Act and Parts 13 and 14 of the Regulation.
Furthermore, the IVA and IVR apply to both universal mandatory coverage and optional coverage. Part 1 of the IVA applies to ICBC’s mandatory coverage only. Part 4 of the IVA applies to optional coverage. Parts 5 and 6 of the IVA apply to both mandatory coverage and optional coverage.
C. Seeking Legal Counsel for Your Claim
Most personal injury lawyers will take motor vehicle accident claims on a contingency basis (a percentage of the total sum recovered) and offer a free consultation. Since this means that there is usually no cost barrier, it is often wise to at least consult a lawyer to ensure that you will receive the amount to which you are entitled. Here are a few things to be aware of when consulting a lawyer for your claim:
1. Contingency Fees
Contingency fees usually range between 20 percent and 25 percent if the case is settled before trial, and 33 percent if the case goes to trial. Some lawyers use a sliding scale, so that the fee increases as the trial date approaches. The Law Society of British Columbia imposes limits on contingency fees, and the claimant is unlikely to encounter lawyers who charge more than 33 percent.
2. The Contingency Fee Contract
The contingency fee contract must be in writing and must contain a provision that it is the claimant’s right to have the contract reviewed by the Supreme Court for reasonableness.
Contingency fee contracts often provide that if the claimant discharges the lawyer, the claimant will have to pay an hourly rate for services up to the date of discharge and that these fees must be paid before the lawyer will transfer the file to another lawyer. A claimant who discharges a lawyer can have the lawyer’s bill reviewed by a Registrar of the Supreme Court in a hearing called an Assessment. The Registrar will make a ruling about the reasonableness of the bill and whether the claimant should be required to pay the bill right away.
3. Disbursement Costs
Disbursement costs are the expenses incurred for photocopying, medical reports, transcripts of evidence, police reports, motor vehicle searches, etc. Most law firms will pay these costs for the claimant, and collect them at the end of the lawsuit.
4. Marshalling of Reports
Over the course of the claim, the claimant’s lawyer will collect your medical records, typically for the period from 2 years before the motor vehicle accident to the period following the accident, and deliver them to the defence counsel. As a claimant in a personal injury action, it is important to be diligent in pursuing recommended medical treatment and visiting a family physician, as clinical medical records are typically only generated when a patient attends at an appointment. The lawyer for the claimant and for the defendant(s)/ICBC may also arrange for independent medical evaluations with specialized doctors over the course of the claim.
If there is a claim for loss of prospective earnings or cost of future care, the claimant’s lawyer may also collect and deliver economic briefs and reports by vocational specialists, accountants, actuaries, and other non-medical professionals.
The claimant’s lawyer will also receive defence reports and expert summaries. All of this goes on behind the scenes. Claimants wishing to have a more active role in their file should not hesitate to contact their lawyers for periodic updates.
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