ICBC and Basic Coverage (12:III)
| This information applies to British Columbia, Canada. Last reviewed for legal accuracy by the Law Students' Legal Advice Program on August 2, 2022. |
NOTE: The following portion of this chapter is meant to serve as a basic primer covering some of the key principles of the new ICBC system, which applies to claims for accidents occurring on or after May 1, 2021. Given that this no-fault system is new as of May 1, 2021, there are still certain portions of it that are being clarified, or that may adapt with implementation.
A. Basic Coverage
Basic coverage is mandatory for all BC vehicles. Driving while uninsured is an offence (MVA, s 24(3)(a)) which carries a maximum penalty of a fine of up to $250 and/or imprisonment of up to three months (MVA, s 24(5)(a)). Driving an uninsured vehicle is also an offence (MVA, s 24(3)(b)) which carries a fine of at least $300 and no more than $2,000 and/or imprisonment for at least seven days and no more than six months (MVA, s 24(5)(b)).
The following is included as part of Basic Coverage. Note that this is meant to be a high-level explanation, and insured individuals should refer to their policy for more detail and up-to-date information.
B. Enhanced Accident Benefits
Enhanced Accident Benefits are provided as part of basic coverage, and are outlined under Part 10 of the Insurance (Vehicle) Act [IVA]. These benefits apply to accidents on or after May 1, 2021, “in which there is bodily injury caused by a vehicle” (IVA ss 113 and 114(1)). These benefits are awarded on a no-fault basis, which means that they are paid directly by the insurer to the insured, irrespective of the fault of the insured (IVA, s 117). This also means that, under the new system, there is no longer a right of action (an ability to bring a lawsuit for damages against the other party) for injury arising from a vehicle accident (IVA, s 115). There are a few limited exceptions to this bar on actions for injury from a vehicle accident, which are outlined in Section VII: When You Can Still Sue.
1. Entitlement to Enhanced Benefits for BC Residents vs. Non-Residents
BC residents are covered by Enhanced Accident Benefits for accidents in BC, and for accidents in other jurisdictions in Canada and the United States.
For non-residents involved in an accident within BC, or one outside of BC but involving a BC-registered vehicle, particular considerations may apply to determine eligibility. See s 119 of the IVA for more detail on entitlement to benefits in these circumstances.
2. Claim Deadlines and Requirements to Report Promptly
As a general rule, the insured has two years from the date of the accident within which to make a claim for Enhanced Accident Benefits (Enhanced Accident Benefits Regulation, BC Reg 59/2021, s 55(1), [EABR]). However, there are certain circumstances in which the deadline for making a claim may be measured differently. S 55 (1) of the Enhanced Accident Benefits Regulation sets out claim deadlines in specified circumstances. Please do not rely on this manual chapter as an authority for claim deadlines, and be sure to consult the regulation closely or speak with ICBC directly to confirm your deadline by which to make a claim, as it may change or may be case-specific.
- NOTE: To access Enhanced Accident Benefits, the insured also has a duty to, “promptly notify the corporation of the accident” when an accident occurs (EABR, s 56(1)). If an insured fails to do so, “without reasonable excuse and to the prejudice of the corporation”, then benefits may be refused (EABR, s 56(2)). For this reason, it is important to not delay in reporting an accident to ICBC, as this may affect your ability to make a claim later.
- NOTE: There may be other deadlines related to your Enhanced Accident Benefit claim not noted here.
3. Other Sources of Compensation
When awarding Enhanced Accident Benefits, ICBC will not pay a benefit that is available from another source as, “compensation for the same accident” (IVA, s 122(2)), although they may pay the difference between the Enhanced Accident Benefit and the other source. Other sources listed include those such as workers compensation, the Canada or Quebec Pension Plans, an employment or union plan, or other insurance (IVR, s 18(2)). Note that the above still applies even if the insured makes the choice not to access these other sources that are available to them.
4. Summary of Enhanced Accident Benefit Types
The following is a basic explanation of some of the Enhanced Accident Benefits included. Insured individuals should refer to their policy for more details, and up-to-date information.
a) Healthcare and Rehabilitation
These benefits cover healthcare and rehabilitation for those injured in a vehicle accident. These are available on a no-fault basis, and are typically paid directly by ICBC to your medical provider (though this is not always the case).
An insured party is entitled to the following treatments if needed to treat the injury in the 12 weeks after their accident: acupuncture, chiropractic, kinesiology, massage therapy, physiotherapy, counselling, and psychology. Note that there are certain prescribed fee and appointment quantity caps for each of these treatments, which vary depending on the treatment type (see Enhanced Accident Benefits Regulation, s 19, Table 1). Once the 12-week post-accident period and/or the number of pre-authorized appointments have elapsed, the insured must show that additional treatment is needed either, “to facilitate the insured’s recovery from the insured’s bodily injury” (EABR, s 19(a)), or to, “address a decline in the insured’s physical or mental function because of the insured’s bodily injury” (EABR, s 19(b)).
Various prosthetics, other medical equipment and certain prescription and non-prescription medications are also covered by this benefit (EABR, ss 21(1) and (4), and s 23), as are, “ambulance services from the scene of the accident” in certain prescribed circumstances (EABR, s 20).
Rehabilitation benefits are also available, “to contribute to the rehabilitation of an insured and to facilitate the insured's recovery from the insured's bodily injury” (IVA, s 124), which may include modifications to the insured’s home or vehicle (EABR, ss 24 and 25). In certain specified circumstances, compensation is also available to assist with the insured’s, “activities of daily living” (IVA, s 125(1)) which they could otherwise carry out before the accident. The amount of this benefit varies depending on the type of activity and the degree of assistance that the insured needs (see EABR, ss 27-31 for detailed calculations).
Certain transportation, lodging and meal expenses are also covered if required for the insured to receive care. Note that there are relatively strict requirements for reimbursement or coverage of such expenses, which can be reviewed in detail under EABR ss 32-34.
Finally, in certain instances, reimbursement is also available to cover certain travel, lodging and meal expenses for an individual to travel to assist the insured. This applies in cases where an insured is under 16 years old, is in intensive care, requires “major healthcare” (defined in section 1 of the Health Care (Consent) and Care Facility (Admission) Act), has a “life threatening” bodily injury, or when their life is in, “imminent danger” (EABR, s 35(2). The travel must be either: (a) to authorize treatment for the insured, (b) to assist the insured to make a decision respecting major health care,
(c) to assist in the treatment of the insured’s bodily injury, or (d) to assist the insured on other medical or compassionate grounds. (EABR, s 35(3))
- Note: There is a cap on the amount that ICBC will cover, and that they will only cover these expenses for up to two individuals (IVA s 125(6) and EABR s 35(4)).
For all of the above benefits, make sure to consult your policy closely to see which benefits require pre-approval from ICBC, and which do not.
b) Caregiver Benefit
The IVA allows for benefits to be paid to an insured who is injured in an accident and, “whose main occupation at the time of the accident is taking care of, without remuneration, one or more persons who are under 16 years of age or who are regularly unable for any reason to hold any employment” and who is, “unable to continue providing that care because of the insured's bodily injury”. This benefit is not payable to an insured who is, “a full-time earner, temporary earner, student or minor”, as these classes of insured persons have access to other benefits (IVA, s 152 (1)).
Once 180 days have passed following the accident, the insured individual receiving the caregiver benefit may choose to transition to the income replacement benefit. They may also choose to continue receiving the caregiver benefit (IVA s 152(4)). ICBC has a legal duty to give the insured information to help them make this choice (IVA s 152(5)).
c) Income Replacement Benefit
Income replacement benefits are available to full-time, part-time and temporary earners in certain prescribed circumstances, as well as to certain non-earners (IVA, ss 131-134). The entitlement amount is, “90% of the insured’s net income” (Income Replacement and Retirement Benefits and Benefits for Students and Minors Regulation, BC Reg 60/2021, s 2(1) [IRR]), as calculated by certain formulas specified in the regulation. This amount of net income that can be used for calculation is up to a maximum of $100,000, effective until March 31, 2022. This cap will change on a yearly basis beginning on April 1, 2022 (IRR, ss 2(2) and (3)).
As set out in the Income Replacement and Retirement Benefits and Benefits for Students and Minors Regulation, s 1(1), full-time, part-time and temporary earners are defined as follows:
“full-time basis”, in respect of employment, means
(a) an insured is employed at one employment for not less than 28 hours, not including overtime hours, in each week of the year preceding the date of the accident, or
(b) an insured is employed at one employment
(i) for not less than 28 hours per week, not including overtime hours, and (ii) for not less than 2 years with periods of work not less than 8 months in duration and with gaps between periods of work not more than 4 months;
“part-time basis”, in respect of employment, means an insured is employed for less than 28 hours per week, not including overtime hours;
“temporary basis”, in respect of an insured who is a temporary earner, means the insured is employed but not on a part-time basis or full-time basis.
For part-time, temporary, and non-earners, after the first 180 days of benefits ICBC will initiate a process called determining employment (see IRR, s 13). This involves considering factors like, “education, training, work experience and physical and intellectual abilities of the insured immediately before the accident”, as well as factors like work experience and wages over the five years prior to the crash. If the insured part-time, temporary or non-earner is unable to do the determined employment as a result of the accident, then they continue to receive their benefit, and cannot receive a lower benefit amount than received prior to the determination of employment. For those able to hold their determined employment, the income replacement benefit ends (IRR, s 11(1)(b)).
Two years following the accident, if the insured is still unable to hold their pre-accident job but is able to work, ICBC will determine employment for the insured (IRR, s 14(1)). This process applies to full-time workers, as well as part-time, temporary and non-earners who have previously had their employment determined under the process above. Once employment is determined under this process, the insured has a year to search for such employment. Following the end of that year, if the insured is able to find work, and that work has a, “gross yearly employment income” lower than that used to calculate their prior income benefit, then ICBC will begin to pay the insured, “the lesser of the following”:
(a) the difference between the income replacement benefit the insured was receiving before the employment was determined…and the net income from the determined employment as calculated under this regulation;
(b) the difference between the income replacement benefit the insured was receiving before the employment was determined…and the net income the insured earns from employment.”
(IRR, s 10(1))
Some other circumstances in which income replacement benefits may end include when:
- “the insured is able to hold the employment that the insured held at the time of the accident” (IVA, s 146(1)(a))
- “the insured holds other employment from which the insured earns a gross income that is equal to or greater than the gross income that the insured earned from employment held at the time of the accident” (IVA, s 146(1)(b))
An insured who recovers from their injury and then suffers a relapse may also be entitled to re-instatement of their income replacement benefit. The calculation for this benefit varies depending on whether it has been less than two years or more than two years since the end of the prior benefit period (or since the accident if no prior income replacement benefits were received) (IRR, s 9).
Benefits for Students and Minors: Certain benefits are also available to students aged 19 and over who are unable to continue their studies for a specified period due to an accident. If a student is eligible for both an income replacement benefit and a student benefit they cannot receive both, but are able to claim the larger benefit (IRR, Part 9). Similar benefits are also available for minors under age 19. Similarly, if a minor is eligible for both loss of studies benefit and an income benefit they cannot receive both, but are able to claim the larger benefit (IRR, Part 10).
Retirement Benefit: Retirement income benefits are available to certain insured persons over the age of 65. An insured person receiving income replacement benefits is transitioned to the retirement benefit on whichever of the following two dates is later in time: either when they reach 65 years of age, or five years after becoming entitled to income replacement benefits (IVA, s 149). These benefits are calculated at, “70% of the insured’s net income as determined under subsection (2) of this section, less any pension income as determined under subsection (3).” (IRR, s 34(1)). The benefit is not available to those who are over 65 at the time of their accident and are not employed (IVA, s 148).
d) Death Benefit
Enhanced Care also provides for a death benefit, paid in a lump sum, for surviving spouses and dependants of the insured (IVA, ss 156-157). Death benefits for spouses are calculated by a formula which uses the deceased insured’s gross income. These spousal death benefits are capped at a maximum of $500,000 (EABR, s 47(2)). Death benefits for dependants are calculated in accordance with the age of the dependant at the time of death, and are capped at a maximum of $89,306 (EABR, s 48(2)).
e) Permanent Impairment
Enhanced Care provides for a lump sum payment to be made in cases of permanent impairment (IVA, s 129). This payment is calculated by:
(a) determining if the insured has sustained a catastrophic injury in accordance with section 2,
(b) determining the insured's permanent impairment rating in accordance with section 4, and (c) determining the compensation that corresponds to, as applicable,
(i) the catastrophic injury in accordance with section 8 [permanent impairment compensation calculation — catastrophic injury], or (ii) the permanent impairment rating in accordance with section 9 [permanent impairment compensation calculation — non-catastrophic injury].
(Permanent Impairment Regulation, BC Reg 61/2021, s 3 [PIR])
Catastrophic injury is defined in detail in s 2 of the Permanent Impairment Regulation. Detailed information on the above calculations can be found in the Permanent Impairment Regulation.
The Enhanced Care system also includes a recreation benefit for those who are permanently impaired as a result of their injuries. This benefit provides support for the insured to participate in certain recreational activities following their injury. Note that this benefit is only available to those with a “catastrophic injury” or those, “with a permanent impairment rating of 20% or more as determined in accordance with the Permanent Impairment Regulation” (EABR, s 36(2)). The dollar amount awarded for this benefit correlates to the percentage degree to which the insured is deemed to be permanently impaired (EABR, s 36(7)).
B. Basic Vehicle Damage Coverage
Basic vehicle damage coverage is also a part of ICBC’s mandatory basic coverage (IVA, s 173), and provides indemnification for certain vehicle repairs and other losses resulting from vehicle damage that occur as a result of an accident in British Columbia involving, “at least two vehicles” (IVA, s 174(2)), in specified circumstances.
When indemnification is provided for basic vehicle damage, “[t]he total value of indemnification…must be reduced by the extent to which, expressed as a percentage, (a) the owner and the operator of the insured's eligible vehicle and a person in a prescribed class of persons is responsible for the accident, and (b) another person whose name is not ascertainable is responsible for the accident” (IVA, ss 174(4) and 175(4)). This means that the insured is only indemnified in accordance with the percentage amount for which they are found to be not responsible for the accident (i.e. if an insured fully responsible for the crash, they are not indemnified under this coverage). If there is another unknown person who is not responsible for the accident, indemnification is also reduced accordingly.
The indemnification provided for damage to or loss of an eligible vehicle is capped at $200,000 (Basic Vehicle Damage Coverage Regulation, BC Reg 4/2021, s 15(2), [BVDCR]).
Indemnification is also provided for, “reasonable expenses incurred by the insured for loss of use in relation to the eligible vehicle in respect of the following: (a) hiring passenger directed vehicles; (b) using public transportation; (c) renting a substitute vehicle that is similar to the eligible vehicle, with the corporation's approval; [and] (d) using other alternative transportation with the corporation's approval” (BVDCR, s 18(2)), though this indemnification for passenger directed vehicles and public transportation does not apply if these expenses, “exceed expenses that would have been indemnified for renting a substitute vehicle that is similar to the eligible vehicle” (BVDCR, s 18(3)).
C. Basic Third Party Liability
The basic theoretical principle behind third party liability insurance is that it is meant to indemnify the insured for claims that may be brought against them by someone else. Under the no-fault system, care for injuries is provided directly by the insurer to the injured party, as outlined above. However, there are still certain instances where an insured party may find themselves facing a claim from another party in an accident, such as when the insured causes non-vehicle property damage, or is driving outside BC in a jurisdiction where the other party is entitled to sue.
This third party liability coverage, included as part of basic mandatory vehicle coverage, provides indemnity for this sort of property damage, as well as for injury or death that occurs in other jurisdictions in Canada or the United States, with certain specified exceptions (IVR, s 64). This indemnity for basic third party liability is capped at $200,000 for most vehicles, with higher limits for buses, taxis and limousines (IVR, Schedule 3, s 1(1.1)).
D. Uninsured Motorists
This portion of basic coverage covers non-vehicle property damage caused to the insured’s property by an uninsured (identified) motorist, in British Columbia (IVA, s 20). This insurance is capped at $200,000 (IVR, Schedule 3, s 9(1)).
ICBC will not indemnify the claimant for amounts that the claimant can claim through, “any benefit, compensation similar to benefits, right to indemnity or claim to indemnity” that the claimant is entitled to (IVR, s 106(1)). This includes benefits such as those available under the Workers Compensation Act and the Employment Insurance Act.
The process for claiming under this section remains the same as under the old ICBC system, and involves the insured claimant applying to ICBC. Once this claim is sent, ICBC has the ability to settle in favour of the claimant or to require the claimant to take legal action (IVA, s 20(5)). See Part II, Section IX.D.i: of this manual (Uninsured Motorists or Unidentified Motorist Cases) for technical information on ICBC’s rights and obligations in this process.
E. Unidentified Motorists (Hit and Run)
This portion of basic coverage covers non-vehicle property damage caused to the insured’s property by an unidentified motorist (i.e. a hit and run case) in British Columbia. This coverage allows the insured party to bring a legal action against ICBC as a nominal defendant in order to obtain damages (IVA, s 24).
This insurance is capped at $200,000 (IVR, Schedule 3, s 9(1)), although a $750 deductible is subtracted from the total coverage amount paid to the insured (IVR, Schedule 3, s 9(1)).
ICBC will not indemnify the claimant for amounts that the claimant can claim through, “any benefit, compensation similar to benefits, right to indemnity or claim to indemnity” that the claimant is entitled to (IVR, s 106(1)). This includes benefits such as those available under the Workers Compensation Act and the Employment Insurance Act.
Obligations of the insured in unidentified motorist cases:
It is critical that, to claim coverage, the insured must have:
(a) within 48 hours after the discovery of the damage, made a report to the police of the circumstances in which the damage occurred,
(b) obtained the police case file number for the report, and
(c) on request of the corporation, advised the corporation of the police case file number.
(IVR, s 107(1))
In addition, in order for a claimant to make a claim or get a judgment against ICBC in unidentified motorist cases, the court must first be satisfied that all reasonable efforts have been made to ascertain the identity of the owner and/or driver (IVA, s 24(5)). See Part II, Section IX.D.ii of this manual for more details on the case law in relation to this requirement.
Finally, to proceed with the claim against ICBC as a nominal defendant, the claimant must give written notice to ICBC “as soon as reasonably practicable” and within six months of the accident (IVA, s 24(2)).
F. First Party Coverage Under Part 10 of the IVR
1. Inverse Liability
Inverse liability protection provides for compensation for vehicle loss or damage in situations where an insured is travelling in another jurisdiction in Canada or the United States whose laws do not otherwise allow the insured to sue for such compensation. The amount of compensation is, “an amount equal to the amount of damages the insured would have recovered if the insured had had a right of action” (IVR, s 147(2)). In practice, this would mean that the amount that can be recovered under inverse liability would be limited if the insured is found to be partially or fully at fault.
Compensation under this section is limited to, “the least of the following: (a) the cost of repairing the vehicle; (b) the declared value of the vehicle; (c) the actual cash value of the vehicle” (IVR, s 147(3)).
Section 148 of the IVA specifies coverage in situations where, “death or injury of an insured arises out of the operation on a highway in Nunavut, the Yukon Territory, the Northwest Territories or the United States of America of an unidentified or uninsured vehicle, other than an uninsured vehicle owned by or registered in the name of the insured or a member of the same household as the insured.”
The coverage amount in these cases is capped at $200,000 (IVR, Schedule 3, s 11).
Note that the insured has certain duties in order to access this coverage. The IVA specifies that ICBC, “is not liable…unless the insured or a representative of the insured”:
(a) with respect to an accident with an unidentified vehicle, reports the accident within 24 hours after its occurrence to a policeman, peace officer, judicial officer or the administrator of any law respecting motor vehicles,
(b) within 28 days after the occurrence, files with the corporation a statement under oath that the insured has a cause of action arising out of the accident against the owner or driver of an unidentified or uninsured vehicle and setting out the facts in support of that statement, and
(c) on the request of the corporation, allows the corporation to inspect the motor vehicle the insured occupied at the time of the occurrence.
(IVR, s 148(5)
In addition to the above, ICBC will not be liable (i.e. ICBC will not compensate the claimant) in the following situations:
- if the insured has a right of recovery under an unsatisfied judgment;
- if the insured was operating a vehicle without the consent of the vehicle’s owner;
- if the insured fails to comply with s 148(4)(b) to the prejudice of ICBC. Under section 148(4)(b) of the IVR, the insured:
- must file a copy of the originating process with ICBC within 60 days of the action commencing; and
- must not settle a claim without the written consent of ICBC
(IVR, s 148(4)
3. Underinsured Motorists
Underinsured motorist protection provides damages for injury or death in circumstances in which the other party to the accident, “is legally liable for the injury or death of an insured but is unable, when the injury or death occurs, to pay the full amount of damages recoverable by the insured or his personal representative in respect of the injury or death” (IVR, s 148.1(1)). In such cases, ICBC will, “compensate the insured, or a person who has a claim in respect of the death of the insured, for any amount he is entitled to recover from the underinsured motorist as damages for the injury or death” (IVR, s 148.1(2)).
Circumstances in which underinsured motorist protection would apply are uncommon under the new no-fault system, but could arise in situations where the insured doesn’t have access to compensation for injury under Enhanced Care and the other driver is liable for the accident but is underinsured.
The amount of coverage for underinsured motorist protection is capped at $1 million (IVR, Schedule 3, s 13).
Underinsured motorist coverage applies to accidents in both Canada and the United States (IVR, s 148.1(2)(b)). However, underinsured motorist coverage only applies in jurisdictions or situations where there is a right of action (an ability to sue) for damages from an accident injury (IVR, s 148.2(4)(a)). See Section VII: When You Can Still Sue for a list of situations in which an insured individual may still be able to sue for injury arising from an accident in BC.
In cases of hit and run accidents involving an underinsured motorist, underinsured motorist protection only applies where:
(a) the hit and run accident occurs on a highway, and
(b) where the hit and run accident occurs in the Yukon, Northwest Territories or United States of America, there is actual physical contact between the insured or the vehicle occupied by the insured and the unidentified vehicle.
(IVR, s 148.1(4))
It is important to note that, in relation to underinsured motorist protection, an insured is not permitted to settle an action without ICBC’s written consent (IVR, s 148.2(4)(b)).
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