Autoplan Insurance

In British Columbia, everyone who owns a motor vehicle must purchase insurance from the Insurance Corporation of British Columbia. What follows is a basic summary of the major issues you should be aware of concerning automobile insurance.

"Basic compulsory" Autoplan Insurance is the minimum coverage a vehicle owner must purchase from ICBC and provides for the following:

i) Third party legal liability

ii) "No-fault" accident benefits

iii) Underinsured motorist protection

iv) Protection against uninsured motorists and unidentified motorists

If you cause an accident while driving, ICBC will defend you and pay for any claims up to your Total Legal Liability Limit applicable to your vehicle. This insurance covers the owner, members of the owners household and any other licensed driver driving with the owner's permission.

The minimum requirement in B.C. is that the insurance on your vehicle must be able to cover claims of at least $200,000.00 for injury or property damage if you are at fault. It is advisable to purchase optional increased liability coverage because if you are at fault in an accident and the injuries exceed the limits of your insurance, you will be held personally responsible.

This means you could lose your business, your home, and all of your possessions.

In situations where a person suffers catastrophic injuries, damages in excess of $2 million can be awarded. As a result, it is wise to purchase increased liability insurance to protect against claims of this type.

Regardless of who is at fault in an accident, ICBC pays certain accident benefits, commonly called "no-fault benefits", to all injured occupants of a vehicle if it is licensed and insured in B.C. These no-fault benefits are payable to the owner of the vehicle as well as to members of the owner's household who are injured in a motor vehicle accident .

These no-fault benefits also apply to any cyclist or pedestrian who is injured as a result of a collision with a vehicle that is insured in B.C. provided that the accident occurs within Canada.

No-fault benefits include:

a) Reasonable medical and rehabilitation expenses subject to a lifetime limit of $150,000.00 for each insured person who was injured.

b) Up to $300.00 per week in disability benefits to an employed person for the period of total disability. Homemaker benefits may also be payable to a maximum of $145.00 per week.

c) Funeral expenses to a limit of $2,000.00 as well as minimal death benefits.

No-fault benefits may not be provided in certain situations, including injury or death of a person who was an occupant of a vehicle involved in an illicit trade or transport, or who was a driver who not authorized or qualified to operate the vehicle.

British Columbia's no-fault provisions are very generous compared with some other jurisdictions such as Alberta where the maximum lifetime rehabilitation expenses are limited to only $5,000.00, compared with B.C.'s $150,000.00.

If you are injured by a motor vehicle which is underinsured (meaning that your damages exceed the amount of the third party liability of the vehicle at fault) underinsured motorist protection (UMP) ensures that you receive compensation to which you are legally entitled up to the limit of the UMP policy. For example, if the person at fault in the accident only carries $200,000.00 third party legal liability coverage and you or your passenger's injuries exceed that amount, UMP coverage under your own insurance will cover the excess amount up the maximum limit of $1 million for each insured person.

Unfortunately, if you are seriously injured even $1 million may not be enough to cover your future loss of income or future medical care costs. There is optional additional coverage available at a nominal cost for up to $2 million but few people are aware of it. We would recommend to everyone that they purchase excess Underinsured Motorist Protection coverage as protection for you and your family should any of them be injured and the party at fault does not have sufficient insurance.

UMP applies not only to the individual named as owner but to anyone else who is in the vehicle as a driver or a passenger. It also provides coverage to the owner and to members of his or her household who are injured while in someone's else's vehicle or as a pedestrian or cyclist or under any circumstances resulting from an accident in which the at-fault motorist does not carry sufficient coverage.

UMP also applies in certain situations that you would not expect, even to people who do not own a vehicle but have a valid BC driver's license and to members of their household. Coverage would apply if they are injured while in someone else's vehicle or as a pedestrian or cyclist or under any circumstances resulting from an accident in which the at-fault motorist does not carry sufficient coverage.

In the case of company owned vehicles, UMP coverage applies to all occupants (drivers and passengers) of a vehicle properly insured. A special UMP policy can also be purchased by individuals who do not own or lease vehicles and who do not drive.

UMP does not cover any injuries if you are an occupant of an unlicensed vehicle (unless you reasonably think that the vehicle is licensed), or you are operating a vehicle without the consent of the vehicle's owner, or if you are the occupant of a vehicle exempt from Autoplan insurance such as vehicles owned, leased or operated by the Government of Canada. (Hopefully the Government of Canada will have enough assets to cover your claim!) UMP will also not apply if the accident occurs in a jurisdiction where the law does not allow you to sue for damages or if, after your injury, you settle with the party at fault without ICBC's agreement. UMP is also only available if you are travelling in Canada and the USA.

Basic Autoplan also includes protection in certain situations, against uninsured motorists and unidentified motorists. Some limitations and exclusions apply.

Your ICBC policy is a contract of insurance. Should you mislead ICBC or breach that contract your insurance may be void. This would result in you being personally responsible for all damages that you may cause in an accident. The following are some examples that will result in your insurance becoming void:

a) False declarations when you buy insurance. A common example of a false declaration is the use to which the vehicle is being put: pleasure, transportation to work or business use. Another frequent example is when a person declares him or herself as the principal driver so that the true principal operator can avoid payment of substantial premiums .

b) Unauthorized drivers. Example: injuries caused by an unsupervised driver with a learner's permit, or by a driver without a valid driver's license.

c) False claims. A false claim or a misleading or untrue statement made to ICBC after an accident will result in your insurance becoming void.

d) Use of the vehicle. If a vehicle is used for an illicit or prohibited trade or transportation or is participating in a race or speed test, the insurance policy may be void.

e) Driver conduct. A person who drives while impaired will not be insured. Similarly a driver will not be insured for an accident for which he was convicted of certain criminal code offenses such as causing death by criminal negligence or driving while prohibited.

You, as the owner of a motor vehicle, may be held personally liable if you or any operator of your vehicle (be it your children, friends, etc.) do any of the above and cause an accident which results in injuries. There are many decisions to be made when purchasing automobile insurance and the results of having insufficient coverage may be disastrous. We recommend that you evaluate your current insurance coverage and consider whatever additional coverage is required.

This article is not legal advice and a lawyer should be consulted on any specific case.