So What Do I Pay ICBC for Anyway?
If you have had ongoing dealings with ICBC as a result of a car accident then you have likely had the pleasure of dealing with at least two sides of ICBC. Initially the relationship starts off pleasant but as the relationship continues the lines of communication and mutual understanding fade. Now, in fairness to many of the adjusters who handle personal injury files, this is not the fault of the adjuster but the fact that the adjuster wears two hats along with having to follow ICBC’s unreasonable and arbitrary policies. These two hats are confusing to clients and I often hear “So what do I pay ICBC for anyway?”
Let me try to explain. In most car accidents in British Columbia, ICBC is your insurer but they are also the insurer for the other people involved in the collision. In simple terms, ICBC acts for the good guy (white hat) and the bad guy (black hat) on the same case. A very clear conflict of interest.
White hat – If you are the injured party and you are not at fault for the collision (aka innocent party) then ICBC is your insurer for:
- Accident benefits, also known as no fault benefits or Part 7 benefits. This is very basic insurance coverage that is designed to provide very modest insurance coverage for wage loss (up to $300/week), medical and rehabilitation benefits (a portion of these expenses) and death benefits. It is not full compensation. ICBC is not a disability insurer, nor can you buy this coverage from them. To get complete compensation from ICBC, you need someone else to be at fault and insured by ICBC with policy limits sufficient to cover your claim. In short, you need someone to sue with money (usually insurance money)
- UMP (Underinsured Motorist Protection) – this is additional coverage if the person at fault does not have enough insurance to pay for your claim. Additional UMP coverage can be purchased at a very low cost.
- Hit and run coverage – this is additional coverage where you do not know who is responsible (who to sue) for your claim (Note: very specific steps need to be followed for this coverage to be effective – see my previous article ICBC Ought to Include a Warning.)
Black hat – If you are the person at fault for the collision then ICBC is your insurer for:
- Accident benefits – for you, even if you are at fault (see description above).
- Repairing or replacing your vehicle (if you bought collision coverage).
- Paying valid claims that any other person involved in the collision makes against you for vehicle damage and injury up to your policy limits (between $200,000 and $5 million depending on what coverage limits you bought). Without this insurance you would personally have to pay any damages awarded by a court to a person injured in a car accident that was your fault. If insured, ICBC will negotiate with the injured party on your behalf and if necessary, settle or defend a lawsuit. If the other party’s claim is more than your insurance coverage, you are personally responsible for anything in excess of your policy limits.
In summary, what you primarily pay ICBC for when you buy auto insurance, besides repairing or replacing your vehicle, is insurance coverage to defend and payout any damages awarded or agreed to on your behalf up to the limits of your insurance policy. You do not pay ICBC to provide you with full compensation if you are hurt. What this means is that if you are badly hurt in an accident, in order to obtain complete compensation, you are going to need someone to sue (make a claim against). More specifically, and from a practical level it means that ICBC primarily acts for the black hat and if you are the injured party you are going to have to wait until the end of your claim to get most of your money. ICBC has no obligation to pay your ongoing expenses, beyond what is covered under your accident benefit coverage until the end of the claim. That being said, ICBC may choose to pay more than their legal obligation for a period of time in hopes that you will not retain a lawyer, but the bottom line is that they do not have to pay everything until the end of the file. As a result, whenever you are dealing with ICBC as the innocent party it is important to keep in mind that ICBC simply cannot act in the best interests of both people they insure (white hat and black hat) at the same time.