If you are renewing your vehicle insurance this year, you will find the way ICBC calculates your basic rate has changed. The changes affect ICBC’s rules about lending your car so it is important to understand them.
What are ICBC’s rules about lending your car to family?
As of September 1, ICBC will ask for the names of any friends or family members who may drive the vehicle. You have to list every member of your household, regardless of how often they will be using your vehicle. If one of the listed drivers causes a crash in your car, they will be held accountable.
What is new about ICBC’s rules about lending your car?
Under the old system, if someone borrowed a vehicle and crashed it, the crash would go on the vehicle owner’s claim history and could trigger higher insurance premiums. As of next month, accidents will follow the driver, not the vehicle. So if your friend is at fault for a crash while driving your vehicle, the claim is counted on their driving record instead of yours.
What about lending your car to a non-household member?
We have seen how ICBC keeps track of family members who might be driving your car, but what about when you lend your car to someone who isn’t a member of your household? If someone is going to drive your vehicle 12 or more times per year, they must also be listed.
You can add or remove listed drivers any time at no extra cost by visiting an ICBC broker, however, your basic insurance premium might increase depending on the new listed driver’s driving history and experience.
Unlisted Driver Protection
If you want to occasionally lend your vehicle but you still want to avoid the possibility of a financial penalty in the event of an accident, ICBC has introduced Unlisted Driver Protection. The policy protects you from paying out if an unlisted driver crashes your vehicle.
Previously, it was announced that you would be able to purchase the policy would start at $50 per year, however, ICBC now says you will initially pay nothing. If an unlisted driver crashes your car, the Unlisted Driver Protection will kick in at $50 per year. The fee will increase if there are more crashes caused by unlisted drivers.
When listing drivers on your insurance policy, you will also be asked to identify the principal operator. This is the person who will be driving the vehicle the majority of the time. When ICBC calculates your insurance premium, 75% of it will be based on the principal driver and the remaining 25% will depend on the other listed drivers.
It is important that you do not misrepresent who is the principal driver because it can invalidate your whole insurance. A parent might buy a car for their child and then put their own name down as the principal driver to save money on premiums. If the child is actually the most frequent user of the vehicle, this can be a breach of the insurance and the parent and child could be liable to pay costs. That means they could have to pay huge bills for injuries to third parties or property damage.
How does ICBC know if the principal operator has been misrepresented?
If ICBC denies a person coverage due to an alleged misrepresentation of the principal operator, they can file a dispute. ICBC does not have to prove someone knowingly lied or failed to declare who is the actual principal driver, beyond a reasonable doubt, only that they did so on the balance of probabilities.
In this case, Yu Lau took ICBC to court after it denied him coverage. Mr. Lau’s son, Victa Lau, was at-fault for a crash while driving a Subaru Impreza worth $40,000 which was a total loss. Yu Lau owned the vehicle and was listed as the principal operator under the insurance policy, however, ICBC asserted that Victa Lau was intended to be the person who would drive the vehicle the majority of the time.
ICBC denied Mr. Lau’s claim on the basis that both his insurance application and statement after the crash contained misrepresentations as to the principal operator. The Court ruled in favour of ICBC after finding evidence supporting the purchase of the Subaru for Yu Lau’s personal use did not make sense.
Yu Lau was also the principal operator of a Lexus and he owned two other vehicles he could not afford to insure. The judge said: “Yu Jung Lau was not so wealthy that he could afford to own and operate multiple vehicles just for his own use and enjoyment. He or his wife already owned four vehicles, two of which they could not afford to insure.”
The judge noted the Subaru was the “kind of car that would certainly appeal to a young man”. The Court also found Mr. Lau’s recollection of the car’s specifications suspect as he could not remember things such as the full model name, the number of speeds on the manual transmission and the number of cylinders in the engine. “Although some of this could be attributed to poor memory,” the judge said. “It is more consistent with a lack of real interest in the car.”
ICBC may use other methods to argue someone other than the named principal driver uses the vehicle most of the time, such as scrutinizing your initial statement to ICBC or by speaking to neighbours or other witnesses.
It is a good idea to follow ICBC’s rules about lending your car but if ICBC is denying your claim, you should speak to a lawyer. At Acumen Law, we have experience of fighting for our clients to get their full entitlement.
Call us on 604-370-3050 for a free consultation.