Principal Operator Breach

Limited savings on insurance premiums, it is not worth using somebody else as a principal operator

It is standard practice for the in-take ICBC adjuster to consider who was driving the vehicle and compare that person to who is named as the principal operator on the contract of insurance.  If the driver does not have as good a safe driving discount as the owner/ principal operator, ICBC often breaches the owner and driver of the contract of insurance on limited evidence and speculation that there was a false declaration regarding the principal operator. In breaching the driver/owner of the vehicle, ICBC flat out ignores the explanation of the driver/owner as to use of the vehicle.

Common instances of a breach are where a parent is insuring and owing a vehicle which apparently is being driven by a teenage child living at home.  Other common instances are where there is a husband-wife or boyfriend-girlfriend situation and one partner has a much lower discount rate than the other partner. If the good driver is the principal operator for all vehicles in the household than that sends out a red flag to ICBC.

The starting point is when getting interviewed by ICBC, make sure that you are aware of who is the principal operator on the contract of insurance before talking to ICBC so that you don’t get tricked into certain testimony in ICBC’s attempt to show that the principal operator is somebody other than the person named on the contract of insurance. However, be honest as ICBC will investigate if they are suspicious.

Ultimately, the principal operator that is supposed to be named on the insurance would be that person that is most likely to use the vehicle more than 50% of the time as at the time of placing the insurance. For the limited savings on insurance premiums, it is not worth using somebody else as a principal operator when clearly that individual will not be driving the vehicle more than 50% of the time. The result of cheating on your insurance declaration is you are basically driving the vehicle without insurance if ICBC finds out about your false declaration and breaches you.

While ICBC bears the burden of proving the principal operator 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.

Finally, expect a rise in policy breaches in the future as ICBC revisits their insurance model. Recent changes include the requirement to pay a further premium of $50 to allow other individuals to drive your vehicle. Other changes are to tie the premiums into all drivers that will be driving the vehicle. Most unsuspecting motorists will underinsure because of lack of foreshadowing of the expected drivers of the vehicle over the term of the policy. Hence, ICBC will have a “field day” breaching motorists. After all, who can predict, in the future, that a friend will need to drive you and your vehicle home from the bar as a designated driver? What if a new roommate must drive your vehicle to help you and you did not know the person when you placed your insurance? Let us hope ICBC uses an element of compassion and understanding when they adjust these sorts of claims.