Insurance Rating Breach

The limited savings in insurance premiums does not offset the severe financial implications of being caught insuring the vehicle improperly

Another example of where ICBC is very aggressive on denying insurance coverage is where they feel the vehicle is not insured correctly. The most common situation is where you rate the vehicle for pleasure use only yet you are using the vehicle to drive to and from work more than 15 km away from your house or are using the vehicle for the purposes of work. The second most common situation is where you have the vehicle insured in one part of the Province but are driving it in another part of the Province where the insurance premiums are higher. Similarly, if you have insured the vehicle in British Columbia and are driving it in another Province or in the United States for an extended period time you may be in breach of your contract of insurance.

The simple point is to make sure you properly insure the vehicle. As a cost-benefit analysis, the limited savings in insurance premiums does not offset the severe financial implications of being caught insuring the vehicle improperly.

Similarly, if you have a change in your lifestyle such as moving jurisdictions or requiring your vehicle more for work, you should get the vehicle reinsured properly. The law says that the situation as at the time of purchasing the insurance is applicable and you don’t have to change your insurance on every change in your lifestyle. However, ICBC ignores that law and if they can find a way of breaching you of the contract of insurance they may do that. For example, they don’t care that you may have not been driving your vehicle to work when you placed the insurance. They rely on the fact you are now driving the vehicle over 15 km to and from work, more than 6 days a month and did not insure the vehicle that way. The key is any changes in your driving habits during the term of your policy should result in you making a visit to your insurance broker to review potentially revamping the nature of your insurance.

Be cautious when you speak to an in-take adjuster after a motor vehicle accident which is your fault if there may be some issues about the insurance coverage. The adjuster may be trying to set you up to give evidence which may potentially create a breach. You still must be honest with the adjuster because ICBC has been known to do further investigations and if you are caught given them a false statement, that is a reason for a breach of the contract of insurance. For example, if you say you never drive your vehicle to work and they phone a colleague that says you do drive to work, they will breach your contract of insurance due to the misstatement alone.

In summary, it’s very important to ensure that your vehicle is properly rated for travel to and from work, for business use and for territory of operation. Do not try to save on insurance premiums by misleading the insurance broker as to the use of the vehicle.

While ICBC bears the burden of proving the rate breach, they can simply make that finding on speculation. You are then faced with accepting the ruling or pursuing ICBC’s internal review processes and/or a lawsuit to confirm coverage. If you go the direction of a lawsuit to establish insurance coverage, you are in for a battle as ICBC will vigorously defend their breach position. Your legal bill may reach the tens of thousands of dollars so be ready for a lot of legal expense and a full trial.