The Orca’s legal explainer on why – and how – BC drivers can get hosed
Support when injured, coverages for repairs and vehicle damage, coverage for lost wages. Underlying all these is a need for the insurer to faithfully represent the injured. This is, after all, what we pay them to do (and we certainly do pay).
Unfortunately, in BC we don’t have much choice in the matter. Our provincial overlords have decreed that one insurer shall rule them all.
The situation is the same in Saskatchewan, Manitoba, and Quebec, where crown corporation automobile insurance is the only option. The justification for the government’s presence in the insurance game is that if citizens are required to possess car insurance, it’s only right that government provide it at a fair price.
Despite (or perhaps because of) this, ICBC should be able to adequately provide the basic services expected of any insurance agency. In particular, they should be able to act as your advocate without the consumer worrying about conflict.
It comes down to this: if you need to rely on them, do you have faith that ICBC will act in your best interest? Let’s examine why you should be skeptical.
When a person is injured in a BC automobile accident, they have access to two forms of recovery: Part 7 damages; and a claim of negligence. Part 7 damages are small and contractual; as long as you meet the requirements, you receive them no matter who’s at fault.
However, the same adjuster working with you to pay your Part 7 claims is also responsible for settling the negligence claim.
The adjuster has no obligation to deal with the injured party’s claim fairly. Their duty only kicks in when a lawsuit actually gets filed against a driver (see section 60 of the Act).
As a result, the adjuster can lowball their own clients, mislead you on what damages are compensable, and convince you to settle earlier than you should.
After all, it’s in ICBC’s interest to lower their payouts.
It’s in these situations that injured people understandably seek out a personal injury lawyer. After all, the lawyer is expected to have the expertise, impartially examine a claim, and pursue ICBC for the full amount.
Shockingly, many personal injury lawyers can be in conflict, as they may represent both an injured party and ICBC on different files.
Hayley Woodin has an excellent article at Business in Vancouver about ICBC’s use of Strategic Allegiance Agreements (SAA) to disincentivize firms from using the full spectrum of legal options. In exchange for guaranteeing a large number of insurance defence files, law firms will sign the SAA, which prohibits them from pursuing punitive damages if ICBC acts inappropriately or in bad faith.
In these situations, lawyers acting for injured parties are contractually prohibited from using all legal tools at their disposal.
If you need another reason to avoid placing your trust in ICBC, look at the proposed changes to premium calculations. Intended to stop the hemorrhaging of funds from the ICBC “dumpster fire”, premiums will be recalculated to more significantly punish drivers who have caused more accidents.
On the surface, this seems like a good change. Of course drivers who drive carelessly and cause more accidents should pay higher premiums.
The catch is who makes the determination of fault: ICBC.
There is no mention from ICBC of how partial fault will impact premiums – or how fault will be determined. The fiscal calculation for ICBC executives is obvious: if the corporation is losing money, just distribute fault across more British Columbians, leading to an increase in premiums on everyone.
In other words: find a reason to blame both drivers in an accident and double the increases in premiums.
When their adjuster says they’re assigning them 5% fault in an accident, is the average driver really going to take their issue to a lawyer? These “faults” could lead to significant premium increases for years.
All these issues stem from the inability of drivers in BC to have choice in auto insurance. If I don’t like how my insurer represents me, negotiates with me, or treats me – I want the ability to move to one who will.
British Columbians will pay more and more to the crown corporation which can’t seem to break even – despite private insurers in other provinces managing to do it at a much lower cost to drivers.
Whether through premiums or taxes, British Columbians will pay to clean up the mess.
Geoff Costeloe is a lawyer and entrepreneur located in Vancouver. The above article is not be taken as legal advice. You can engage with him (civilly) on Twitter @gcosteloe.