The Insurance Corporation of British Columbia (ICBC) is the sole provider of auto insurance in BC by provincial law. While most accidents result in insurance coverage, there are situations where ICBC may deny coverage where it finds a driver is in breach of the insurance contract. A denial off coverage can leave policyholders vulnerable and burdened by the financial consequences of a crash. This blog post aims to shed some light on the complexities of ICBC breaches and denials and to provide some information to navigate these challenging circumstances.
When ICBC Gets Involved in Your Car Accident
ICBC is involved in virtually every car accident in the province. Section 73(1) of the Insurance (Vehicle) Regulation requires policyholders to report any motor vehicle accident they are in to ICBC. Failure to do so can result in a denial of coverage in itself.
Many criminal driving cases involve a significant ICBC component. This is because, other than the consequences of the criminal driving matter itself, ICBC may deny coverage if a driver is convicted of a criminal driving offence. A criminal conviction would also open the door to a lawsuit by the other party for personal injury, meaning you could be personally sued for tens of thousands of dollars or more.
Even if the driver is not convicted, ICBC may conduct their own investigation as to whether the driver was drinking and driving, left the scene, or made a false statement to ICBC, for example. The lawyers at FIlkow Law have handled thousands of criminal driving cases, including the ICBC component. As a result, the firm is very experienced and successful in handling insurance (ICBC) breach cases.
If you are denied coverage, then you will be liable for third-party damages. This means that you have to pay for the damage to any other cars and property, and any personal injury claims. While personal injury claims have been limited since the introduction of the no-fault regime in 2021, third-party damages can still be large where there is a total loss or where there are expensive vehicles involved.
Also, if you are denied coverage, ICBC will not pay your (first-party) claims. This means you will not be paid for damage to your vehicle.
If ICBC investigates and determines that you have breached your conditions, it will come after you for all the money it paid to third parties involved in the accident. This can result in a massive debt to ICBC and substantial consequences to your driver’s licence and insurance.
A breached ICBC policy is costly. It can put you and your family in an incredibly stressful situation. If you or someone you know is being investigated for a breach of insurance or has been breached, call the experienced lawyers at Filkow Law for advice.
ICBC Collision and Comprehensive Coverage: What Constitutes An ICBC Breach?
A breach of insurance occurs when the insured (the owner of the vehicle and/or the driver) fails to fulfill their obligations under the insurance policy. The following is a list of different ways an insured may breach their insurance contract:
- Failure to promptly report an accident;
- Failure to cooperate with ICBC’s investigation;
- Failure to comply with a condition of their driver’s licence, such as having a supervisor while driving;
- Providing false information on your insurance application (e.g., principal driver, declared use of the vehicle);
- Driving under the influence of alcohol or drugs;
- Being convicted of any Criminal Code driving-related offence;
- Making a wilfully false statement to ICBC about the accident;
- Driving a vehicle without the consent of the owner;
- Driving a vehicle while not qualified by law;
- Failing to remain at the accident;
- Racing
- Trading or transporting illicit goods;
- Attempting to escape arrest or police action;
- A finding that an insured permitted a driver to do any of the above;
The above is not an exhaustive list.
An ICBC investigation begins immediately. From the day you get in a motor vehicle accident, you are required to give notice and cooperate with ICBC. Any failure to do so can result in a breach.
Car Accidents, False Statements, and ICBC Breaches
“ICBC says I gave a false statement. Can they breach my insurance?”
One way in which ICBC can treat you as being in “breach” of your auto insurance is if they find you provided a false statement. For example, if you get into an accident and falsely state to ICBC that you were driving when someone else was driving, ICBC may deny you insurance coverage for making a wilfully false statement. This means that you would be personally liable for any damages (to persons or property) that you caused.
The burden of proof is on ICBC to prove that what you said was a “wilful false statement.” They must prove that the impugned statement was made intentionally, knowingly, and purposely, without justifiable excuse. A statement made carelessly, thoughtlessly, or inadvertently is not made wilfully. Similarly, a statement is not wilfully false if the insured who provided the statement had an honest belief in its truth.
ICBC must also prove that the statement was material to the management or payment of the claim by being capable of affecting the mind of the insurer, either in the management of the claim or in deciding to pay it. For example, the involvement of alcohol will likely be material to ICBC and affect the handling of a claim.
If you want advice from experienced lawyers about reporting an accident to ICBC, contact Filkow Law today.
The Insurance and Legal Consequences of an ICBC Breach
An ICBC breach can have severe and far-reaching consequences for the policyholder. If ICBC determines that an insured is in breach of their insurance policy, this means they are personally liable for the damage caused.
Generally speaking, ICBC will compensate third parties for their losses even if they find a breach of insurance; however, ICBC will then seek to recover the amount they have paid from the breached party.
If an insured is breached, they will be personally responsible for covering the costs associated with repairing or replacing their vehicle. This includes any damage caused to the bodywork, engine, interior, or any other components of the vehicle. Additionally, they will be held liable for any damage caused to other vehicles involved in the accident.
A breached insured will also be held liable for any personal injuries to the other parties involved. This may include rehabilitation costs associated with physical therapy or long-term care, and lost wages resulting from time taken off work due to the injuries.
Beyond the damage caused to vehicles and persons, a breached party will also be responsible for any damage caused to property other than vehicles during the accident. This could include damage to buildings, fences, road signs, or any other structures or objects affected by the accident. The breached party will be liable for the repair or replacement costs associated with this property damage.
There are also a number of legal consequences that follow a breach of insurance:
- Breaches of insurance involving allegations of fraud or attempted fraud may lead to criminal or other charges.
- ICBC may sue the breached party for the losses it incurred in paying the claims of the aggrieved parties.
- If ICBC has obtained a judgment and the debtor is unable to pay the judgment debt, ICBC may initiate collection actions, such as wage garnishment or asset seizure.
- ICBC may cancel or deny the renewal of a debtor’s driver’s licence or insurance while there is an outstanding debt.
- Unpaid judgment debts can negatively impact your credit rating, making it difficult to obtain loans or credit in the future.
Case Study: ICBC Breach for Drinking and Driving
In a situation where you are suspected of drinking and driving and causing an accident, you may be charged criminally for impaired driving, or you may receive an immediate roadside prohibition. In either of these scenarios, ICBC may take the position that you are in breach of your insurance contract due to intoxication by alcohol. Even if you successfully fight the criminal charge or overturn the driving prohibition, ICBC may still pursue a breach based on the investigating officer’s evidence.
The burden, however, is on ICBC to prove your breach is higher than a simple suspicion that you were drinking. ICBC must show that more likely than not, you were incapable of properly controlling your vehicle, which caused the accident. The law is well established and goes back to the 1960s, wherein Union Insurance Society of Canton Limited v. Andre Arsenault, 1961 CanLII 83 (SCC), the Supreme Court of Canada stated:
In my view, there is a wide difference between being likely to drive improperly and being incapable of driving properly. Every driver who is under the influence of liquor to the point of being incapable of proper control is certainly impaired, but in my opinion, it does not follow that every impaired driver is necessarily incapable of proper control.
This quote is an important reference in a 1980 case called Kim v. Insurance Corp. of British Columbia (1980), 21 BCLR 18 (SC), which added:
In terms of the clear distinction drawn by those words, it would be necessary for the defendant to prove that the plaintiff’s state went beyond impairment to a point where he was incapable of driving properly. It necessarily follows that the state of incapacity cannot be established by the mere proof that the breathalyzer reading exceeded .08.
A failed breathalyzer test is simply not enough evidence for ICBC to prove that you were incapable of driving when the accident occurred. There must be other evidence of intoxication, such as witnesses at the scene or an expert stating in court that your blood/alcohol level at the time of the accident would have left you incapable.
The legal principles were summarized in Hamman v Insurance Corporation of British Columbia, 2017 BCSC 831:
- in order to deny coverage, the insurer must prove breach of the condition;
- the onus of proof is on the insurer and the standard of proof is the balance of probabilities;
- to substantiate a breach the insurer must prove each of the following:
- the insured was driving the vehicle,
- he was under the influence of alcohol or drugs, and
- so much so that he was incapable of properly controlling the vehicle;
- evidence of drinking and careless driving may not suffice to discharge the burden of proof;
- having an illegal level of alcohol in blood will not necessarily be conclusive;
- reliable blood alcohol readings at a level twice the legal limit may permit inferences of incapability sufficient to meet the burden of proof; and
- such blood alcohol readings combined with other observed symptoms of intoxication may also suffice to substantiate the breach.
Contact Filkow Law For Legal Assistance with Your ICBC Insurance Breach
An ICBC insurance breach is serious. It can leave you owing ICBC hundreds of thousands of dollars and without a license until you pay. Even after a breach finding, there are many strategic and effective legal avenues to take advantage of. If ICBC has told you they are investigating you for a breach of a condition of your insurance policy, you should consult an experienced ICBC claim lawyer in Vancouver immediately to discuss your options.
The lawyers at Filkow Law have decades of experience assisting drivers with criminal charges, roadside prohibitions, and ICBC breaches. For legal assistance, call us today.
