Small Trucking Companies in British Columbia and ICBC Insurance Issues
Who This may Interest:
This may be of interest to anyone who has a vehicle insured with the Insurance Corporation of British Columbia (ICBC). It could be useful to anyone in the trucking business with multiple vehicles and who must purchase their insurance from ICBC. If you do not qualify for the ICBC Fleet Plan and must use their Principal Operator Plan this blog will point out the potential for ICBC to deny claim coverage. Be very worried if you are on this plan with multiple vehicles and driver turnover. If ICBC decides the wrong principal operator was registered to a vehicle they may deny insurance coverage. This is based on problems small trucking companies on this plan have had with ICBC in recent years. The information on their 2011 website simply states a claim could be denied if the wrong Principal Operator is registered to a vehicle. The 2006 version stated deliberate misrepresentation of the Principal Operator could lead to a denial of a claim. The court cases seen to date still require ICBC to prove the incorrect registration was deliberate.
Note: The article below is based on my research and opinions which may have errors or may now be out of date on some items.
Some suggestions to protect yourself from a denial of insurance follow. Do not run your trucking business as a Sole Proprietorship. Form a corporation to separate the business from your personal assets. This will require paying fees to incorporate but the protection of your personal assets makes it worth it. Have heard some trucking firms have each truck setup as a separate corporation. This would certainly provide maximum protection if ICBC denied a claim. The downside is the added complexity if the owner later qualified for the Fleet Plan and wanted to move to that plan.
If you are on the Principal Operator Plan verify with any new drivers hired what their discount is. A clean abstract and the driver stating he/she has the full discount will be correct in most cases. However to protect yourself from any surprises have the driver bring an up to date statement from an insurance agency that you can take a copy of. You cannot ask an ICBC agent what a driver’s discount is. This is considered private information. If all your drivers have the full discount theoretically there shouldn’t any issues with ICBC in the event of a claim. If one or more drivers have less than a full discount be very careful with drivers switching between trucks. The reason why will become obvious later.
My Motive for Writing This:
My motive for this blog is to document the unfair treatment by ICBC of a family owned small trucking business and hopefully provide useful information on how to avoid a similar situation with ICBC. These are very honest down to earth people who just want to run their business. They are not insurance experts and have always depended on the local ICBC agency to look after their ICBC insurance.
ICBC could be putting out of business and into bankruptcy a small business owner who built his business up from one truck to six trucks and trailers providing employment for at least five employees. The owner runs the business out of his house which enables him to provide assistance to his wife who has MS.
Before getting to the insurance issue will provide some background. My involvement was looking at the insurance options for trucking companies and checking court cases that could provide a precedence.
This was a learning experience from which my observations and opinions were formed right or wrong.
One thing became apparent. The legal costs of accessing the justice system in British Columbia for cases that cannot be handled in Small Claims Court is financially out of reach for much of the middle class. There is legal assistance available but it is only for very low income individuals or people facing criminal charges. As a result more average middle class people are being forced into do it yourself representation which puts them at a severe disadvantage. As an example The Province published a story September 18, 2011 about a retired couple forced to represent themselves in court. The couple are launching a civil suit to recover their retirement savings that were mishandled in a trust account. The article noted in BC it would easily cost $60,000 to have a one month case heard in court. The fees for a lawyer would be in addition to this. In comparison the cost in Alberta would be approximately $1,000. In Ontario the cost would be approximately $650. Fortunately most cases don’t last one month.
With regard to the Small Claims Court a lawyer’s blog stated that ICBC will try very hard to have any Denial of Insurance Claims filed in Small Claims Court moved to the expensive higher courts. This blog stated ICBC is trying to get the province to approve changes that will prohibit filing of Denial of Insurance cases in Small Claims Court. If this is correct the checks and balances that are supposed to ensure fair treatment for ICBC clients are being whittled away.
A sizable legal industry has been built up on injury claims. ICBC has a pool of lawyers to dispute claims and on the other side there is a large number of lawyers who specialize in maximizing injury claims. As the lawyer representing the claimant gets a percentage of the settlement which can be quite large this can be lucrative work. Explains why the lawyer who handled my Real Estate transaction some years back switched from handling Real Estate transactions to ICBC injury claims.
Unfortunately looking through the cases one gets the sense some individuals are taking advantage of soft injury claims for pain and suffering which are hard to disprove. One can see why ICBC is forced into ongoing legal disputes with regard to injury claims. In comparison Manitoba’s public insurance does not allow one to sue for pain or suffering. Manitoba’s vehicle insurance rates are among the lowest in Canada although there could be other contributing factors.
Some Interesting Court Cases:
Looking at the published cases involving non-injury claims it is questionable why ICBC went to court for some of them. Many involved denial of insurance coverage and sometimes the ICBC case appeared weak. When ICBC lost these cases and had to pay the legal costs plus the claim the final total must have been much higher than the original claim. The thought comes to mind is ICBC taking advantage that the average person cannot afford to take them to court? How many customers have had to accept being unfairly denied coverage or an unfair out of court settlement for this reason? Basically if you don’t agree with the decision take us (ICBC) to court…if you can afford it. Links to some of the interesting cases found in the Supreme Court of BC follows:
Search the Supreme Court of British Columbia for Neutral Citation: 2010 BCSC 857 or
2007 BCSC 1307 or
2000 BCCA 172 or
2003 BCPC 0151 in the Provincial Court of British Columbia or
Comparing ICBC to Vehicle Insurance in other Provinces:
Comparing ICBC against other provinces that have non-competitive public vehicle insurance such as Saskatchewan and Manitoba a significant difference stands out in how surpluses are handled. In Manitoba if a significant surplus builds up a refund is issued to their clients. This usually happens every few years. In 2011 an average refund of $450 was issued. In Saskatchewan public insurance is operated on a break even basis with any surpluses going into a stabilization fund. The fund is used to keep rates low and smooth out rates as claims fluctuate from year to year. In British Columbia a portion of any ICBC surplus is transferred to the provincial government’s general revenue account. In effect in British Columbia ICBC has become a form of indirect taxation.
The following comments are taken from an insurance seminar comparing the compensation of the various province’s vehicle insurance plans for injury claims.
“Everywhere but BC there have been restrictions on compensation for minor injuries i.e. sore back and sore neck soft tissue claims. 60% of all claims are minor claims. Cost of processing these claims is what drives up the cost of insurance. This is what led to the caps in other provinces. “
A coalition of special interest groups in British Columbia is said to be responsible for lobbying against a no fault system and against a dollar cap on minor injuries. This coalition continues to put pressure on the provincial government not make any changes.
When ICBC was setup its mandate was to provide insurance to BC drivers at a reasonable rate. Even though ICBC generally has a significant surplus at the end of a year they appear to be looking at ways to increase the surplus. Recently ICBC announced they would be evaluating Risk Based Insurance. The reason put forward was it may be a fairer way to assign rates. If this is similar to the Risk Based Rating system used by Private Insurers then the question is why do we need ICBC? If the new objective for ICBC is to maximize the surplus (Profits) then to be fair the province should dissolve their monopoly and allow private insurance to compete with ICBC. Am not a fan of private insurance for vehicles but healthy competition does help keep rates reasonable and companies honest.
The case that triggered this blog involves a small family owned business doing long distance hauling of freight. The business is located in the interior of BC which means ICBC has to be used as the vehicle insurer.
ICBC Insurance Plans for Trucking Companies:
For the trucking industry ICBC has two plans.
Owners who have less than a combination of 5 trucks and trailers must use the Principal Operator (PO) plan rather than the Fleet Plan. ICBC may have another name for this plan but PO seems to be the common term used outside of ICBC. The fleet criteria above was prior to 2011 and in effect at the time of the accident.
The Principal Operator Plan:
The PO plan requires a principal operator be assigned to each vehicle. This plan is appropriate for family vehicles but is really unsuited for a trucking company. Most trucking companies have high driver turnover. Drivers can switch between trucks. Under this plan there is a chance once a year to update the PO for each vehicle. This is when the insurance is renewed. The POs may be accurate for less than a day after insurance renewal. When the owner asked the insurance agent about these issues the advice was do the best you can. We know it won’t be accurate. However as it was eventually found ICBC can use any PO discrepancies as an opportunity to deny coverage. How the decision on denying coverage or not appears to be made is interesting and will be outlined later.
Another disadvantage with the PO plan is canceling insurance on trucks that will be idle for a period of time. A truck may be idle for several weeks or longer while waiting for repairs or a suitable new driver is being hired. Canceling the insurance and renewing it later requires the owner pay the entire yearly cost of insurance up front. Financing is not available when this is done. Due to this owners will generally leave insurance on trucks that are idle which has them overpaying. In contrast the Fleet Plan allows insurance to be canceled and reactivated as needed. This can provide a considerable savings compared to the PO plan. The minimum monthly insurance cost for a heavy commercial truck will be about $1,000 per month. For newer heavy commercial trucks it will be much more.
As mentioned ICBC does not have a provision with the PO plan where an owner can update or correct the PO as needed during the year. The PO plan does have an option to declare “No Principal Operator” at the time of renewal. Found a claims bulletin that was issued in December, 2007 to ICBC adjusters to clarify when this option should be used. It also describes how to look for an incorrect PO declaration using the logbooks a commercial truck must keep. Whether or when this was communicated to Insurance Agents advising their clients in 2006 is not known. The bulletin is inserted below.
DATE December 14, 2007
PAGE 3 OF 3
AUTHORIZED BY, ISSUED BY
VICE-PRESIDENT – CLAIMS POLICY
CLAIMS PROCEDURES CL202
Principal Operators on Commercial Vehicles
Commercial Vehicles not insured under a fleet policy are required to
declare a principle operator. If the owner is unable to determine who will
be operating the vehicle the majority of the time during the term of the
policy, they are required to declare that there is no principle operator.
When investigating PO breaches on commercial vehicles, remember that
heavy commercial vehicle operators are required to complete pre-trip
inspection reports and retain them for three months. In addition, operators
of units traveling beyond a 160 km radius from the driver’s home terminal
are required to complete daily logs and retain them for six months. Both
documents record the drivers’ identities. Requesting copies of these
documents may assist an investigation into a questionable PO declaration.
At first glance declaring “No Principal Operator” would appear to be the safest way of handling PO registrations. It does mean paying a higher rate for insurance and not getting the safe driving discount good professional drivers have. However in a recent court case ICBC successfully denied coverage as they were able to prove a PO should have been declared for a vehicle instead of “No Principal Operator”. ICBC found if the person operating the vehicle the majority of time had been declared as the PO it would have resulted in paying a higher insurance premium than with “No Principal Operator”. A similar situation could unintentionally happen by assigning a driver to a truck such that he/she drives it more than 51% of the time. In the event of an accident ICBC would have the opportunity to deny coverage claiming “No Principal Operator” was incorrect.
In the case of the small trucking company the owner only hired drivers who had the maximum safe discount which was an indicator to the quality of the driver. With all drivers at the same discount level it would also reduce the chance of ICBC denying coverage due to an incorrect PO. Note: An owner cannot check with ICBC or their Insurance Agents at the time of hiring to confirm a driver’s actual discount. A driver can present a clean abstract, have been driving accident free for a number of years and believe they have the maximum discount. However this may not always be the case. Some drivers with a clean abstract can have different discounts than other drivers with a similar clean abstract and years of driving experience. Have the driver provide a recent statement from an ICBC agency what their discount is and retain a copy.
The Fleet Plan:
The Fleet Plan doesn’t require assigning Principal Operators to vehicles and has better rates than the PO plan. Under this plan drivers can switch between trucks and driver turnover is not an issue. Insurance can be canceled and reactivated as needed without a large payout up front. If one maintains a good accident record the discounts are better and the insurance cost per truck will be less than the PO plan. Overall the fleet plan makes sense for the trucking industry except for the qualifying criteria which forces smaller fleets into the almost unworkable PO plan.
Before the 2011 changes an owner with 5 units (trucks and trailers) or more could get on the Fleet Insurance Plan. In 2010 ICBC made a request to the provincial government to raise the criteria to qualify for the Fleet Plan. The new criteria requires a minimum of 5 powered vehicles that fall into acceptable rate classes. Trailers can no longer be included to make the qualifying number to get on the Fleet Plan.
After the accident the Insurance Agency the owner was dealing with switched his trucks at the next yearly renewal to the Fleet Plan as it met the criteria for this plan. The owner’s question to the Insurance Agent was “Do I now have ICBC insurance that will work?”. Actually the owner’s fleet had met the criteria for the Fleet Plan back in 2005 a year before the accident as he later found out. On the Fleet Plan he would not have had to assign principal operators to trucks. There would not have been any principal operator issue and denial of insurance coverage with the accident. There also would have been significant savings. ICBC does not send out a notice that one may qualify for the Fleet Plan even though all the vehicles insured are in their data base. An Insurance Agent may pick up on this if they have the complete picture of all the owner’s vehicles but it is best not to count on this.
The ICBC Accident Process for the Principal Operator Plan:
The accident process for the PO plan at least in 2006 seemed to work as follows. This is based on information collected from various sources and may not be completely accurate.
When a vehicle has an accident ICBC will check who was registered as the PO of the vehicle.
If the PO appears to be incorrect the adjuster will then check if this resulted in a lower premium being paid. If it didn’t or the owner is paying a higher premium than would result with the correct PO then it seems there won’t be any issue with insurance coverage. At this point for a trucking firm with multiple trucks and drivers the process seems like a lottery draw.
If the wrong PO resulted in a lower premium being paid then the adjuster will try to determine if this was done deliberately. If the incorrect PO declaration is suspected to be deliberate ICBC will deny coverage. If it wasn’t deliberate the ICBC adjuster would prepare a report, state the wrong PO did not appear to be deliberate misrepresentation and send the report to Vancouver Head Office. In Head Office a committee reviews the report and decides whether to deny coverage or not. The size of the potential claim appears to be a major factor in a decision to deny coverage when the incorrect PO registration was not deliberate. If ICBC decides to honor the insurance contract the PO registered to the vehicle is then corrected.
Note: The owner of a vehicle involved in a claim has the right to request a copy of the ICBC adjuster’s report and the report that came back from the committee.
ICBC publicly stated around 2005-2006 they were cracking down on clients who intentionally registered the wrong principal operator to a vehicle. From reviewing some court cases it is obvious some families were registering as the PO the family member with the best discount. Most people would agree with pursuing individuals who did this. It is obviously much easier for a family to forecast who the PO of a vehicle will be. ICBC seemed to take a common sense approach to trucking companies on the PO plan before this crackdown. It was not unusual in the trucking industry to have an out of date PO and ICBC still provide coverage for an accident regardless of the size of the claim. This crackdown provides opportunities to deny coverage in the trucking industry if ICBC is looking to improve their net surplus.
The Accident and the Issue with ICBC:
In the case of this small trucking company the owner had hired a driver who shortly afterwards had a serious accident. This driver was hired some months after the insurance for the accident vehicle had been renewed and was assigned to this truck. The PO registered to this truck was no longer an employee but the discount for the new driver involved in the accident matched the registered PO. Unfortunately the update for this ex-employee was missed at renewal time by both the owner and the insurance agency. Renewal had been done over the phone in preparation for signing and distribution to the trucks later in the day while the owner was interviewing a potential new driver at a coffee stop.
The accident was a unfortunate chain of events. It was the first time the new driver was bringing the truck in for its periodic maintenance. The highway was unfamiliar to the driver and he was unaware of a section where drivers making a left turn can create an dangerous situation. The left turn is made shortly after a curve and vehicles stopped cannot be seen until part way around the curve. Every year there are multiple accidents here, of which many have been serious. The local residents have petitioned for a change to this part of the highway. It was staked out for a left turn lane twenty years ago but this improvement always gets postponed. The speed limit coming into the curve is not reduced but left at the highway speed of 90 km/hr. Many locals, if they can’t make the left turn without stopping, will make the turn further down the highway and come back. The right shoulder is paved and it is constantly used, even by large B-trains, to get around or avoid hitting vehicles stopped for the turn. The truck driver coming up to the curve was doing the speed limit and had been passed by several vehicles before the curve. Coming around the curve he came upon vehicles backed up. It was a very hot day which reduced braking effectiveness of a heavy truck. The driver realized he would not be able to stop in time and started to turn for the right shoulder which had enough room to go by the lineup of vehicles. At this point the driver of the last car in the lineup which had just passed him decided it would be safer to use the right shoulder. This driver had just passed the truck and was nervous knowing it would be coming around the curve. The car driver swung onto the right shoulder and then immediately stopped concerned it may be illegal to pass stopped vehicles on the right.
The truck driver’s only option now was to swing the truck across the highway and put it in the ditch on the other side. He nearly made it before a motorcycle followed by a car came around the curve from the opposite direction. The motorcycle seemed to squeeze by the truck. The bike wobbled down the road a distance and eventually the driver lost control and the bike fell into the ditch. The motorcycle driver was injured. Witnesses noted he was not wearing any protective clothing outside of a helmet. The car clipped the back of the truck causing major damage to the car. Fortunately the car driver did not appear to be hurt. This driver later accepted a ride and left to pick up a child. The motorcycle driver would claim the truck had clipped him causing loss of control. A witness at the scene didn’t think the bike had touched the truck. He based this on the distance the bike went past the accident scene before the driver hit the shoulder. This witness identified himself to the attending officers. He told them the truck driver did everything he could and avoided what could have been a worse accident. He felt the car driver swinging onto the right shoulder and stopping left the truck driver with only one option. ICBC assigned all blame for the accident to the truck driver stating he had made an unsafe crossing of the highway.
It is interesting the truck driver has never been issued any citation. ICBC never interviewed the witness above or called him to discovery. Two years later just before the time limit for injury claims was to expire the car and motorcycle drivers submitted large injury claims to ICBC for hard to disprove health issues.
The ICBC adjuster reviewed with the owner all the truck PO’s registered and their movements between trucks. This adjuster seemed very determined to to find an incorrect PO registration. As the owner described it the adjuster acted like a “dog looking for a lost bone”. When his insurance agency found out who the owner was dealing with they expressed concern about this particular adjuster. During the accident review the adjuster found one driver did not have the maximum discount. When this driver was hired he presented a clean abstract and stated he was at the maximum discount. The clean abstract and years of driving seemed to confirm this was the case.
The puzzled owner was informed by the adjuster there could be different levels of discounts even for drivers with a clean abstract and similar years of driving experience. When the owner informed the driver he didn’t have the full discount he seemed surprised. He claimed he had the full discount last time he insured a vehicle. The only thing he could think of was that ICBC must have reduced his discount as he had not insured a vehicle with them for well over a year. He hadn’t received anything from ICBC informing him they had done this. The owner checked with the ICBC agency and they weren’t aware of discounts being reduced for this reason. Months later the owner heard of another similar case. An individual who hadn’t insured a vehicle with ICBC for a couple of years found their discount was almost back at square one when they insured a vehicle. With this conflicting information am not sure what is correct.
The truck involved in the accident had been idle for four months in the owner’s care while a driver was being hired. It had been occasionally used as a fill in truck when a production truck was out of service. It had been driven by various drivers including the owner for short periods of time. The driver not having the full discount had also driven this truck briefly. The local adjuster concluded “No Principal Operator” should have been declared at time of renewal and this was was stated in the report he sent to Vancouver Head Office. The owner was under the understanding every truck had to have a PO assigned to it. He was not aware there was the option of declaring “No Principal Operator”. When looking at the documentation for declaring a Principal Operator on the ICBC website back in 2006 did not see this option mentioned. The current 2011 ICBC web site does describe when this option should be used. However once the owner hired a driver and assigned the driver to that truck he/she would have eventually driven the truck more than 51% of the time and ICBC could have the opportunity to argue the “No Principal Operator” was incorrect.
The committee at Head Office Vancouver came to a different conclusion about the PO. They decided the driver with the reduced discount should have been declared the PO at time of renewal. This does not seem correct either as it is based on hindsight. This driver was being interviewed and the owner had met him at the coffee stop to do the interview. While the interview was in progress the insurance agency was completing the insurance renewals and called to let him know they were nearly ready for pickup. There is a lot of pressure on the owner at renewal time. The renewed insurance has to be distributed to the trucks while they are working. Having a truck stopped until renewed insurance papers are delivered would mean a scheduled delivery is delayed and an unhappy customer.
At this point the owner did not know if he was going to offer this driver a job. If he was offered a job he would be starting on a trial basis. This driver was subsequently hired and started on a different truck from the one that was in the accident. A few months later when this truck broke down he was switched to another truck. The plates and insurance that was on the truck that broke down were later transferred to a truck that had been added to the fleet. This was the truck that was eventually involved in the accident.
As discussed earlier it had sat idle under the owners care for 4 months working occasionally as a fill in truck until a driver was finally hired. Unfortunately when the plates and insurance had been transferred from the truck that broke down to this truck the obsolete PO also came across. The transfer request was done over the phone. Neither the owner or the Insurance Agent thought to check the PO that ended up registered to this truck as part of the plate/insurance transfer. Even if they had it may not have been possible to update it until the next renewal.
If the advice of the insurance agency is followed that the PO on the day of renewal is the one to be used the result again is different. At the time of renewal the PO would have been the owner as he was the only one certain to drive this truck until a new driver was hired. This could be for trips to cover breakdowns or to the garage for maintenance. The owner has the full insurance discount. Using the accident procedure above for the PO plan ICBC would not have been able to deny the claim.
The report sent by the ICBC adjuster to Vancouver stated that there wasn’t any evidence of deliberate fraud. As per the information that came back about the decision the Head Office committee looked at the potential size of the claim and decided to deny coverage. This was based on possible payout cost for injury claims. When asked how one could appeal the owner was told a decision made by this committee is final. He was advised to hire a lawyer and take ICBC to court to get the insurance coverage honored.
The result was a shock to the local insurance agency. They thought at worst the owner would have to pay any difference in premium. Considering the owner was paying $60,000+ per year to ICBC including overpaying for idle trucks and plates the premium discrepancy was a very minor amount. No one in their right mind would risk being denied insurance coverage for very expensive equipment and potential large liability claims to save this small amount with an incorrect PO registration.
ICBC seems eager to write off vehicles:
ICBC’s eagerness to write off this truck and take ownership of it when it could be repaired for a cost effective amount also didn’t make sense.
The owner explained to the ICBC adjuster why the truck was not a write off and how it could be repaired for a cost effective amount. The adjuster still insisted on writing it off and having ICBC take possession of it. Fortunately with some bargaining the owner was able to retain ownership of the truck. The truck was repaired, inspected and back on the road a few weeks later. All repairs were paid by the owner and were not a major expense.
Note: Be careful of the write off value ICBC assigns to a vehicle. It may be only the book value and will not account for any improvements an owner has made such as a new engine, etc. As per the court case in the link below an adjuster should fill out a form (CL30) listing improvements made to the vehicle. The judge in this case states vehicle value disputes have to go to arbitration as per statue and have to be filed for arbitration within two years. The judge was sympathetic to the owner and appears ICBC would have lost this case but the judge’s hands were tied.
Search the Supreme Court of British Columbia for Neutral Citation: 2008 BCSC 777 or
A few months after this accident the owner had to make another ICBC claim. This was for truck damage after a collision with an large animal. Again the PO was out of date. The owner informed the ICBC adjuster of this up front and explained why it was out of date. The driver had switched to that truck some time back. This PO update had also been missed when renewal had been done from a coffee stop over the phone. The adjuster assigned for this claim was very familiar with the trucking industry. This individual said don’t worry they were aware the PO crackdown was causing problems for the smaller trucking companies. The claim will be approved. The claim was approved.
An Extra Insurance Rider is needed for Coverage when Loading/Unloading.
After this accident the owner came across another situation where ICBC could deny coverage. The standard ICBC insurance policy only covers a truck if it is moving when in a loading area. If the truck is fully stopped for loading/unloading and an accident happens ICBC can deny coverage. To get coverage requires an additional insurance rider and a small premium. When the insurance agency was asked about this they said this is not usually put on and it is rarely asked for by truckers. This is probably because they are unaware of this potential insurance ambush. As the owner’s clients expect his drivers come to a full stop for loading or unloading this insurance was put on immediately. There recently was a case where a truck had a claim while unloading excess weight at a weigh scale. ICBC denied coverage as the truck was stopped and in the unloading process. ICBC was taken to court and lost as the judge did not consider the weigh scale as a loading/unloading area as described in the Insurance Tariff.
See Neutral Citation 2010 BCSC 1028 in the Supreme Court of BC Judgment database or
ICBC Appeal Process for Denial of Insurance:
Denial of coverage gives ICBC the option of recovering costs from their client after all the accident claims are in. With the amounts given out for personal injury claims this can easily bankrupt a business or an individual. There is an appeal process outlined on the ICBC web site. A brief 3 step process is described to appeal a denied claim:
(1): Talk to your Adjuster.
(2): Talk to your Adjustor’s Manager.
(3): Dispute through the courts.
To be up front the ICBC web site should qualify the third option with “if you have deep enough pockets”.
The owner did try the 2nd level of appeal but was discouraged when the local ICBC manager obviously was not interested in looking into the case. Steps 1 and 2 have the client dealing with ICBC employees who even if they agree with the client may have limited or no authority to overturn a decision. It may also be a career limiting move to try and overturn a decision by Head Office. In my opinion a third party tribunal that is independent of ICBC is needed in between steps 2 and 3. If this tribunal is truly independent, affordable and has the expertise to provide a fair hearing a lot of court cases could be avoided.
Be Careful when meeting with the ICBC Adjuster:
Be very careful when meeting with an ICBC adjuster. The adjuster will be checking if there is any potential opportunity to deny the claim. Do not sign anything that you do not agree with or understand the significance of. Some adjusters may lead one to think this is the next step in getting your claim processed when instead it could lead to a denial of insurance coverage. The next step will then be taking ICBC to court to get them to honor the insurance contract you purchased from them. If if in doubt ask for a copy so you can thoroughly read it over at your convenience before signing it. If there are concerns about how it is written take it to your insurance agent or a lawyer. The adjuster’s report and anything you signed will be what ICBC will use to make a decision. There won’t be any opportunity except in court to clarify later what was expressed in the report.
ICBC Time Limits:
Note: Time limits can be critical if one wishes to contest or file a claim. These limits are based on my understanding on them at this time. To be certain one should check with a lawyer or an ICBC agent. Time Limits sometimes are changed with new legislation.
If the decision is made to take ICBC to court for denial of coverage one must be aware this has be done within 1 year. The form letter sent to the owner stated insurance coverage had been denied and the owner was liable for all costs. It said claims can be filed up to two years after the accident. It did not say the denial of coverage must be contested within one year. It was originally two years but ICBC had this reduced to one year some years ago.
In this case the two year time limit for claims was nearly up when personal injury claims were filed. The majority of these claims were for hard to prove/disprove items such as mental stress, inability to sleep, impacted ability to work, focus, etc.
ICBC have given themselves two advantages with the one year limit on contesting denial of coverage. First a client may not be aware the limit is not two years and may lose the option of contesting. Secondly one cannot wait until all the claims come in to decide if the legal costs vs. the final costs make it worthwhile to contest the ICBC decision in court.
Some more Background and Observations:
British Columbia is advertised as business friendly and with the recent change of leadership is now apparently family friendly. It appears ICBC has not got this message at least for the smaller trucking companies.
It seems ICBC is becoming a revenue generator for the provincial government. Information on a lawyer’s website stated that an ICBC employee’s yearly bonus is partially determined by the net surplus ICBC has at the end of the year. This could create a potential conflict when dealing with customer claims.
In my opinion the ICBC decision in this case doesn’t make any business or ethical sense.
Ironically a few years ago the owner was in an accident where he had the opportunity to claim soft injuries. He had just purchased a heavy commercial truck and was driving it home when a pickup truck crossed the center line. Fortunately there was enough of a shoulder that he was able with evasive action turn a head on collision into a serious side swipe. Witnesses said he probably saved the life of the other driver. The owner was taken by ambulance to the hospital and released later in the evening. As he felt he didn’t incur any lasting injuries an injury claim to ICBC was not submitted. When meeting with the ICBC adjuster about the accident he signed off that he hadn’t incurred any lasting injuries. ICBC again insisted on writing off the truck even though it was repairable at a reasonable cost. After some bargaining the owner retained ownership of the truck, had it repaired and back on the road.
So far the case has progressed to discovery of the accident itself and the injury claims. The statement of claim received by the owner was interesting. It accused him of many things that seemed to have nothing to do with the accident including “Operating a dirty truck”. This wasn’t the case. Seems this is a standard boiler plating list lawyers throw out in the hope something will stick. A Statement of Claim was also served on the driver making the left turn and the driver who had stopped on the right shoulder.
The owner was called into discovery after his driver. Even though he had not been at the accident he was grilled by the lawyer representing the client claiming injuries like he had been present. This lawyer got quite upset when the owner mentioned the witness. It seems he was unaware of this witness. This lawyer a few days later phoned the witness and asked him to come to his office. The witness refused and said he would only come to discovery. He did not hear anything further.
Months later the owner was informed ICBC had settled the injury and property damage claims. The owner was sent a letter stating he now owed ICBC the very sizable amounts paid out. Fortunately the truck driver involved in the accident was covered by his personal ICBC insurance as he was an employee. ICBC has assigned all the accident costs to the owner even though there has been nothing to date that states any blame for the accident was assigned to his driver.
Note: You or your lawyer can attend the ICBC negotiations settling a claim that will be charged back to you. However my understanding is one can only observe.
The owner has been forced to sue ICBC for not honoring their insurance contract with him. Finding a lawyer that is comfortable with a complex case like this has been a challenge. There are many lawyers out there with experience in dealing with ICBC but mostly for injury claims.
Renewing one’s license and Insurance while Contesting an ICBC Charge:
The owner was concerned about being able to renew his personal insurance and driver’s license when it came due. As his wife who has MS lost the capability to drive some years ago and they live some distance out in the country it was essential to renew his license. He had been told ICBC would not allow a renewal until the amount they had charged him with had been fully paid. Fortunately this is not always correct although ICBC would like one to believe otherwise.
The 2011 version of the Insurance(Vehicle) Act sections 77.2 and 93.1 describe the “Rights of the Insurer” and the “Corporations Collections Remedies”. If none of the items in section 93.1 apply my interpretation is section 77.2 states any third party liability claims paid out by ICBC on behalf of the insured that ICBC wants to recover must be enforced in court before ICBC can take actions such as denying renewal of insurance. See sections 93.1 and 77.2 in the Insurance (Vehicle) Act. The URL to the 2011 Insurance (Vehicle) Act follows.
There is a court case where ICBC withheld insurance from an individual who was in a dispute with ICBC. ICBC lost the case and the judge noted ICBC does not have the right to withhold insurance as a method of collecting settlement amounts owing. See the Provincial Court of British Columbia
for file number: 08-22527. The Insurance (Vehicle) Act for 2007 was in effect at the time of this decision and the sections matching 93.1 and 77.2 were 30.1 and 21.6.
In the owner’s case there was some back and forth between the Insurance Agency and ICBC before ICBC finally allowed renewal. ICBC did demand full payment for the insurance and license, stating their payment plan would not be available to the owner due to the outstanding amount owing. Suspect ICBC does not have the legal right to deny access to the payment plan either. In effect this would be a denial of insurance if one could not pay the full amount up front. However to resolve this would probably require taking ICBC to court.
Owner has discussed his case with a lawyer. The lawyer strongly recommends going after the Insurance Agency as well as ICBC. The reasoning is ICBC may try to move the blame to the Insurance Agency. If the Agency is not named and the Time Limit has expired the owner will be left without any recourse if ICBC succeeds in moving the blame.
The lawyer had more papers in the file received from ICBC than the Owner was given. “All” must have a different meaning depending on who is asking.
The major difference was the lawyer had the correspondence between the ICBC adjuster and ICBC HQ in North Vancouver. What the Owner was given had a sentence the adjuster had not found any evidence of deliberate PO misrepresentation. The remainder went through the various drivers who had driven the truck, how long and a conclusion who should have been declared as PO.
The ICBC adjuster’s report stated the wrong PO was not deliberate misrepresentation. The reasons for this conclusion was documented with a recommendation that the claim be put through and this was submitted to ICBC HQ. The reply back from HQ laid a total beat down on the adjuster. Reading between the lines it may be the committee at ICBC HQ was furious the adjuster had not talked to them before before writing up and submitting the recommendation? Yet the document in the ICBC Claims Procedure Manual on handling a wrong PO does not state an adjuster must contact the Committee.
This adjuster had a reputation for digging hard into claims for reasons to deny coverage. A lot of time was spent going through the Owner’s log books and asking questions. In the end the Owner was told the recommendation was to put the claim through. After being notified the claim had been denied the Owner phoned the adjuster. He was informed the file was no longer being handled by this adjuster. The Owner was curtly told there wasn’t any point in discussing the claim and he may want to get a lawyer. The Owner couldn’t confirm what recommendation the adjuster had really put in. Until now he had no idea the adjuster had fought to get his claim put through and lost a chunk of skin over it.
Continue to receive registered letters from ICBC Debt Collection demanding immediate payment even though the case is in legal proceedings. This harassment from ICBC is normal while cases are being disputed. Advice from the lawyer is to ignore them.
Searched the Internet for the person who had received a sizable settlement from ICBC for injuries. This individual showed up as a participant in a 2011 Pickleball tournament. Seems to be the same individual from the name, address and occupation match. A short article stated he and his wife were avid participants in Pickleball tournaments. If it is the same individual he appears to have recovered from the soft injury which seriously limited his ability to indulge in physical activities.
Owner noticed going through the file documentation provided to his lawyer that ICBC was aware of the witness that was not called to Discovery of the accident. ICBC decided not to bring this witness in. The reason for this decision was not stated.
A short summary of Owner’s discussions with lawyers about fighting ICBC.
It must be realized the playing field is not level when one takes on ICBC. The cost of accessing the courts gives ICBC the high ground.
To fight ICBC on a fairly involved case using a top of the line law firm will probably cost about $50,000 up front and about $150,000 overall. Even after winning the legal costs will often exceed the ICBC charge. One may not get their legal costs covered after winning.
However ICBC may get their legal costs added to the charge if they win.
Often it comes down to simple economics. One can have a slam dunk case but finds it will cost less to just pay the ICBC charge or negotiate paying part of the charge rather than pay a greater cost to win in court. Helps keeps rates down.
Sometimes the best option is go to the news media which may embarrass ICBC into doing the right thing.
For lower cost cases ICBC is more forgiving and often will play the good guys role. Helps their public image having people say they had a good experience with ICBC. Have a large claim and a possible problem with your policy and you will see their ugly side. It doesn’t matter if the mistake was made by the agent or even if ICBC provided incorrect advice. They will go hard for the opportunity to deny coverage and you will have to fight back just as hard.
Owner was scheduled to go into Discovery with ICBC. He is anxious to get this done as he has been waiting a long time. Shortly before the date of Discovery ICBC put in a request for postponement.
Owner’s lawyer is trying to get a new date scheduled, so far without any success.
Frustrating as the process has to be gone through again and it just adds to the legal costs.
Owner’s lawyer still has not been able to get a date from ICBC for Discovery. According to the news ICBC is going through a reorganization. Wonder if this is affecting the scheduling of legal cases?
Owner’s lawyer still has not been able to get a date from ICBC for Discovery. ICBC has changed lawyers which puts the process back at square 1.
Will continue to enter updates as things progress.
A lawyer for ICBC called the owner’s lawyer several weeks ago about setting a date for discovery. Several possible dates were provided to the ICBC lawyer. The dates have passed without a return call.
During this long wait for Discovery it was pointed out to the owner the ICBC case has a serious flaw. The ICBC investigation and case write up is not complete. A judge will ask for completion to determine a fact needed as part of the process set by precedent cases in making a ruling. The information required to do this is readily available and easy to work out. The result (fact) is in favourable of the owner and by itself will probably sink ICBC’s case.
The case that started this thread has finally been settled. ICBC offered a settlement if the owner drops his charge against ICBC. The settlement is not great considering what the owner has been put through but is acceptable.
The information in this case may be useful to others if they get into a similar situation with ICBC so will attempt to do a summary.
A small Trucking Company with several trucks was denied insurance coverage by ICBC due to an incorrect Principal Operator (PO) named for a truck involved in an expensive accident. The PO listed was no longer with the company. The update of this PO was missed when doing a rushed renewal of the insurance for several trucks at the Insurance Agency. The truck at the time did not have a driver assigned and was mainly being used by the owner when a fill in truck was needed.
The ICBC Adjuster conducted an investigation gathering information from the owner and the Insurance Agency on how this incorrect PO wasn’t updated. Eventually the ICBC Adjuster informed the owner there wasn’t any evidence of Deliberate Misrepresentation and he was recommending coverage for the accident.
A few weeks later the owner received a letter from ICBC stating coverage had been denied due to fraud in the declaration of the PO. The shocked owner called the local ICBC branch and was routed to a different Adjuster. This Adjuster informed the owner the previous Adjuster was no longer on the case, the case was closed, he recommended the owner get a lawyer and ended the conversation.
Being very busy the owner did get a lawyer but months later. This is when the mystery was solved of what changed after the Adjuster told the owner he had recommended coverage. The lawyer received additional papers from ICBC which the owner did not receive when he earlier asked for the case file.
In these additional papers was the written conclusion there wasn’t Deliberate Misrepresentation and a recommendation coverage be granted sent by the Adjuster to Vancouver H.Q.. The recommendation seems to have gone to a committee. The response from H.Q. was a thorough chastising of the Adjuster for putting his conclusion in writing and submitting it before first talking to H.Q. A decision by the Committee to deny coverage followed.
Another strange item in these additional papers was a disagreement on who the owner should have declared as PO when renewing the insurance for this truck. H.Q. disagreed with the Adjuster and said a driver the owner was in the process of hiring should have been named. Stating this would have been the correct declaration was puzzling as the owner did not know at the time of renewal if this driver was going to be hired. This driver was eventually hired but assigned to a different truck. If he had been assigned to the accident truck his discount would have been less than that of the incorrect PO.
If the PO update for this truck hadn’t been missed the owner would have named himself as PO as he had the truck. The Insurance Agency knew the PO assignments in a fleet of trucks will usually be incorrect in a few months with turnover, new hires, etc. Their recommendation was assign the POs as things are on the day of renewal.
Initially in getting this denial overturned the owner’s lawyer focused on how a PO is determined and what determines Deliberate Misrepresentation. Note: Do not assume a lawyer knows everything. He or she may have learning to do if they haven’t seen this situation before.
One can help them by doing research in the Judgement Data Base looking for similar cases.
Fortunately some months later an internal ICBC document was obtained describing the process for an Adjuster to handle a case when the PO is incorrect. This document broadened the scope to another factor that has to be taken into consideration.
Basically this document showed a two step process. First determine if there was Deliberate Misrepresentation. If not then go to the section to cancel the plate, update the PO, pay any difference in premium.
If the Misrepresentation was deliberate and it resulted in the claimant paying a lower premium then the owner has forfeited entitlement to their current claim. There was a reference to a section in the Act but shortened it to what it essentially said. To determine the correct premium the wording in this document implies the adjustor is to determine who was using the vehicle the majority of the time.
If the determination of who became the PO had been done by ICBC the log book would have shown it was the owner. This wasn’t the plan at renewal but it was several months later before a suitable driver was found for this truck. Unfortunately the new driver was in an accident on his first trip. In the preceding months the owner had possession of the truck and used it as needed to fill in. The owner’s discount was better than the discount of the driver incorrectly shown as the PO. This resulted in paying ICBC a higher premium than what it would have been if the PO update hadn’t been missed at renewal. Part 2 of the process for denying coverage was not met.
The Judgement Data Base cases showed determining who became the real PO, why did the PO differ from the declared PO and what was the effect on the premium paid are key factors in a court judgement. This expanded the scope for the owner’s lawyer beyond why it wasn’t Deliberate Misrepresentation. The lawyer thought there was an good chance the ICBC case would fail on being unable to prove Deliberate Misrepresentation. This is claiming fraud and it requires a high level of proof. With the owner ending up being the PO this would raise the question why would he misrepresent the PO so he could pay a higher premium?
There wasn’t any documentation provided to the Owner’s lawyer that ICBC had determined who ended up being the PO. It may be the Adjuster after determining there wasn’t Deliberate Misrepresentation did not go on to Part 2 and proceeded to send his recommendation coverage be granted to Vancouver H.Q. The mysterious committee at H.Q. overrode the Adjuster’s recommendation and denied coverage.
By now the owner wanted to get into Discovery and bring these factors forward. Getting ICBC into Discovery was proving to be difficult. There were multiple cancellations by ICBC usually because they were changing lawyers and one where the owner asked for an different date/time as he couldn’t attend the one suggested. ICBC was to call back with a another date but never did. After the first couple of cancellations by ICBC and the long periods of time passing between contact it seemed ICBC was not eager to move this case along. Then the settlement offer eventually showed up.
The lawyer speculated the claim probably would have went through if the accident had been less expensive and if it didn’t happen at a time when ICBC was advertising and focusing on incorrect PO declarations. This campaign was mainly directed at declaring family members with the best discounts as the PO for family vehicles irrespective who really used the vehicle. Being an expensive claim ICBC may have seen a possible opportunity to deny coverage. If the owner couldn’t raise the money to take legal action the Denial of Coverage would work.
Even though it was finally resolved it points out issues with ICBC for customers to be concerned about.
The main one is the up front cost to contest an ICBC ruling that is not an Injury Claim. If it has to be done in the Higher Courts plan on paying $30,000 to $50,000 depending on how complex the case is. If it goes to court the cost will be even more.
For individuals or small businesses who can’t raise the funds to access the Justice System it makes ICBC a law unto themselves. One then has to accept ICBC’s decision even if blatantly wrong and suck it up.
In this regard ICBC isn’t any different from a private insurance company. For example there isn’t any independent affordable Tribunal where one can appeal an ICBC ruling.
In a dispute there may be more important factors than the ones ICBC wants you to focus on and defend. You will have to find them yourself. A lawyer may not be aware of them unless he has experience with cases similar to yours. The Judgement Data Base is a good place to start checking.
Be aware of the Time Limits. Unless it has been changed the ICBC form letter denying coverage will state claims can be filed up to two years after the accident. My understanding this is claims such as Injury Claims. The letter will not say the vehicle owner has only one year to contest the Denial of Coverage.
In hindsight if the owner at the time of the investigation had known the importance of who ended up being the PO and pointed this out to the Adjuster it may have prevented this fiasco.
A Breach of Faith charge was considered but dropped. The owner made the first mistake which could work against the charge. Even if successful the potential award was unknown. The award might not even cover costs and it would take years to get a decision.
ICBC’s Settlement Offer was accepted and the Owner dropped his charge.