Insurance In British Columbia

Insurance in british columbia

Perhaps one of the most complicated jurisdictions in North America for cross border accidents is British Columbia.  This is due to the fact that the government owned Insurance Corporation of British Columbia (“ICBC”) covers all auto insurance for every resident of the Province.  That means that the same corporation is responsible, in theory, for both providing fair compensation to an injured insured as well as responsible to the public to keep rates law (usually by settling cases as cheaply as possible).  This inherent conflict of interest, along with the special rules can make for a complicated situation in a cross border accident.  


Thankfully, Canadians injured in the US may have access to ICBC insurance coverage, which can be quite generous. In many jurisdictions in the United States, the amount of third-party liability coverage that is available to pay damages suffered in an accident is very low. Also, in the United States, it is not uncommon for vehicles to be driven without insurance. In situations where there is not enough insurance coverage to pay the full extent of damages, ICBC may have to compensate the Canadian driver for damages under the underinsured motorist protection (“U.M.P.”) plan.  This is a minimum of $1,000,000, with $2,000,000 being available for $25 a year.  There are very few Americans with anything close to this coverage.


In the cross border context, in order to perfect a U.M.P claim, an injured person has to either get a judgment in excess of policy limits or get ICBC’s consent to settle within policy limits.  Without one of these two things occurring, there cannot be a determination that the at fault driver was in fact “underinsured.”  The U.M.P process is outlined here: http://bcicac.com/underinsured-motorist-protection/underinsured-motorist-protection-ump-process.


It’s also critical to understand that U.M.P. coverage is considered coverage of last resort.   That is, ICBC can force you to take all steps necessary to try to recover money from the at fault motorist before you can claim compensation under U.M.P. This may include both litigating against the at-fault motorist and trying to recover on a judgment, including going after personal assets if any.  If the at-fault motorist cannot pay the judgment, an injured person can then proceed against ICBC to get payment under U.M.P.
The limits on U.M.P. coverage are all inclusive, meaning that the maximum is either $1 or $2 million. From that coverage, ICBC gets to make several potentially significant deductions.
 


Another significant benefit is that, generally, anyone injured or killed in a motor vehicle accident in British Columbia, or any B.C. resident injured or killed in a motor vehicle accident in North America, is entitled to “Part VII” benefits either from ICBC or from another insurer for a motorist involved in the accident.  Exceptions are rare. These benefits include medical and rehabilitation expenses, disability benefits for those totally disabled from employment or homemaking, and death benefits.  There is a maximum value of $150,000.  To get these benefits, the insured person has to promptly give ICBC notice of the accident, mail a report about the accident within 30 days and file a claim within 90 days.  These deadlines are different than the two-year limitation period after the accident to commence a lawsuit against the at-fault driver for compensation for injuries. There is also a two-year limitation period after the accident, or after the last payment under Part VII, to bring a lawsuit against ICBC to force payment of Part VII benefits.
 


Although entitlement to Part VII benefits applies regardless of the location of the accident, Part VII benefits are secondary insurance.  This means a Canadian will have to claim against other insurance first before going to ICBC for the Part VII benefits.
The complicating factor is that in cross border cases it is common for other insurance companies to be involved.  
 


First, British Columbians can purchase excess insurance, from non-ICBC insurance companies. In serious cross border serious claims, which are worth more than $200,000, the at-fault motorist may have excess coverage with a non-ICBC insurance company.
In that situation, the non-ICBC insurance company will want to be involved in making decisions on settlement and on the defense. The involvement of the non-ICBC insurance company generally does not affect the value of a cross border claim.  However, ICBC can be more careful in defending the claim when they have another insurance company involved. Also, our clients have to deal with the possibility of more than one insurance company being unreasonable in settlement discussions.


Non-ICBC insurance companies also become involved in accident claims where a motor vehicle is driven into the Province from the United States. The biggest problem our clients face is that the American insurance companies are not accustomed to the fact that the awards of damages in British Columbia tend to be higher than anywhere else in Canada and the USA. Also, in most instances, the ICBC statutory coverage for such things as Part VII benefits tend to be more generous than in other jurisdictions.  When an accident occurs outside of the Province, BC law sets out that liability issues, including claims for contributory negligence, are to be determined by the laws of the jurisdiction in which the accident occurred.  However, the amount of damages will be determined by the laws of British Columbia.  Therefore, it is common to have to educate insurance companies from the US. 


If the at-fault vehicle is insured by an American insurance company it can cause problems with respect to compensation. This is because a resident of BC will have to seek compensation from ICBC for Part VII benefits and compensation from the American insurance company for any other claims. Invariably, the insurance companies try to point fingers at each other in an effort to make each other pay.  This can delay settlement significantly.


On the other hand, an American insurance company may be less willing to go to trial.   ICBC can be very litigious.  As in all cross border cases, the interplay between insurance companies makes the claim more complicated.