Uninsured and Underinsured Motorist Protection Claims

British Columbia has a statutory program in place which allows compensation regardless of no insurance or limited insurance

If you are injured in an accident caused by an individual with limited or no insurance, British Columbia has a statutory program in place which allows compensation regardless of no insurance or limited insurance.  For no insurance situations, you can apply for coverage with ICBC under Section 20 of the Insurance (Vehicle) Act, which provides coverage up to $200,000 plus legal costs and disbursements for all claims. For losses above the $200,000 level, Section 148.1 of the Regulations provide for a program called underinsured motorist protection (“UMP”).  Payment under UMP is by ICBC.

In British Columbia, the minimum Third-Party limits allowed for ICBC insurance is $200,000.  As a result, most ICBC claims will never involve UMP because most claims are under $200,000.  However, if, for example, you are one of several individuals that are injured by an at-fault motorist with the minimum $200,000 Third Party liability coverage, it is not very difficult to have all the injury claims exceed the Third-Party limits and require the claims to move into UMP coverage.

UMP coverage is considered coverage of last resort.  That is, although ICBC can consent to UMP coverage applying they can force you to take all steps necessary to try to recover money from the at-fault motorist before you can even access UMP. This includes litigating against the at-fault motorist and then when you have a judgment, trying to recover against the at-fault motorist.  If the at-fault motorist cannot pay the judgment, you can then proceed against ICBC to get payment under UMP.

Most British Columbians would have access to UMP coverage.  To have access to UMP coverage, you need to be an occupant of the vehicle with valid ICBC insurance. Alternatively, you can have your own valid ICBC insurance on an unrelated vehicle or be a member of a household with somebody with valid ICBC insurance. Further, having a driver’s license or being in a household with another person with a driver’s license would be enough.

Under UMP, the basic coverage you receive is $1 million without paying anything more.  However, you can buy excess UMP coverage, which provides coverage to $2 million. The premiums for the excess UMP coverage are quite reasonable.

The limits on UMP coverage are all inclusive limits meaning that the maximum is either $1 or $2 million. From that coverage, ICBC gets to deduct the following according to Section 148.1 of the Regulations:

(a) paid or payable by the corporation under section 20 or 24 of the Act, or recoverable by the insured from a similar fund in the jurisdiction in which the accident occurs,

(b) paid or payable under section 148,

(c) paid or payable under Part 7 or under legislation of another jurisdiction that provides compensation like benefits,

(d) paid directly by the underinsured motorist as damages,

(e) paid or payable from a cash deposit or bond given in place of proof of financial responsibility,

(f) to which the insured is entitled under the Workers Compensation Act or a similar law of the jurisdiction in which the accident occurs, unless

(i)  the insured elects not to claim compensation under section 10 (2) of the Workers Compensation Act and the insured is not entitled to compensation under section 10 (5) of that Act, or

(ii)  the Workers’ Compensation Board pursues its right of subrogation under section 10 (6) of the Workers Compensation Act,

(f.1) to which the insured is entitled under the Employment Insurance Act (Canada),

(f.2) to which the insured is entitled under the Canada Pension Plan,

(g) paid or payable to the insured under a certificate, policy or plan of insurance providing third party legal liability indemnity to the underinsured motorist,

(h) paid or payable under vehicle insurance, wherever issued and in effect, providing underinsured motorist protection for the same occurrence for which underinsured motorist protection is provided under this section,

(i) paid or payable to the insured under any benefit or right or claim to indemnity, or

(j) paid or able to be paid by any other person who is legally liable for the insured’s damages;

As already indicated, UMP coverage is coverage of last resort.  ICBC uses this fact to their advantage, in some cases, by forcing you to pursue the at-fault motorist in a lawsuit rather than consenting to UMP coverage applying to the claim. Even if you get a judgment against the at-fault motorist, ICBC can make it difficult to recover money from them by forcing you to go after the at-fault motorist for his/her personal assets. Even after taking all the steps, you still do not have access to the ICBC money as ICBC can force the case to an arbitration hearing, which can include a rehearing of some of the issues in the lawsuit.

Like other ICBC claims, ICBC is involved in the defense of these matters. This is the case even when you are going after an at-fault motorist that does not have ICBC coverage.