What happens if my son borrows a friend’s car and crashes it?

When you drive someone else’s car, you borrow their insurance in most parts of Canada. And if you crash it, their insurance rates will take a hit. There are some provinces, and some situations, however, where the driver could be at least partly liable.

“As long as they give you permission and you’re qualified to drive, the car is insured in most cases,” says Pete Karageorgos, director of consumer and industry relations for the Insurance Bureau of Canada (IBC). “If you’re involved in an at-fault crash, that goes on their insurance record as an at-fault loss.”

If you crash someone else’s car and you’re at fault, the owner’s rates would go up for the next six years, just as if they had caused the crash. The crash would stay off your insurance record.

If the owner could prove that you’d driven the car without permission, their insurance company wouldn’t cover the crash and would remove it from the owner’s insurance record. But to do that, the owner would have to report the car as stolen to the police.

It works differently in Saskatchewan and Manitoba, which have government-run insurance. In those provinces, the at-fault crash would go on the borrower’s record and not the owner’s record.

In British Columbia, which also has government-run insurance, it’s a little more complicated. There, the crash would go on the borrower’s record. But if the owner hadn’t opted for extra coverage for occasional drivers, then the owner would pay a one-time penalty, says a spokesman for the Insurance Corporation of British Columbia.

NOT ENOUGH COVERAGE?

What if you crash someone else’s car and they don’t have enough insurance?

First, a quick review of the three types of car insurance coverage: liability, collision and comprehensive.

To oversimplify, liability insurance covers damage and injuries that a driver causes to other people, vehicles or property. Collision insurance covers damage to the owner’s vehicle in a crash. Comprehensive insurance covers almost anything else that isn’t a collision, including theft and vandalism.

Liability coverage is mandatory, while the other two are optional. Each province requires you to have a minimum amount of liability coverage. It’s $200,000 in most provinces, but there are exceptions. In Nova Scotia, for instance, it’s $500,000 while in Quebec it’s only $50,000.

So let’s say you’re driving someone else’s car, drive through the side of a building and you cause $2-million in damages. If the owner only has $200,000 in liability coverage, “both the driver and vehicle owner could be personally liable if the claim exceeds the coverage,” Joe Daly, spokesman for Desjardins General Insurance Group, writes in an e-mail.

Before you borrow a car, it’s a good idea to find out what coverage the owner actually has.

EXTRA COVERAGE FOR BORROWERS?

You probably won’t be able to buy standalone liability insurance that would cover you when you’re borrowing a vehicle.

“Since liability coverage on a vehicle extends from the vehicle owner’s auto insurance policy, if you don’t own a vehicle, obtaining a non-owner car insurance policy is unlikely,” Anne-Marie Thomas, senior manager of partner relationships for rate-comparison site Insurance Hotline, writes in an e-mail. “I don’t know of any insurer who offers one.”

If you have home insurance, you may also be able to get an umbrella policy that would give you added liability coverage to protect yourself from lawsuits.

An umbrella policy could cost “a few hundred dollars a year,” IBC’s Karageorgos says. But typically, insurance companies will sell you one only if you have both home and car insurance with them.

A 21-year-old without insurance probably wouldn’t be able to buy it.

“Insurance companies typically don’t sell umbrella policies to just anyone,” Karageorgos says.

6 ways to cut your auto insurance rate

The article was written by 

The Insurance Bureau of Canada has some suggestions for fighting rising rates:

1. Shop around 

“There are 45 insurers operating in Alberta, and they will all look at each individual consumer differently,” says Celyeste Power, IBC vice-president Western.

“The best thing to do is shop around and ask some questions of your insurance representative.”

2. Bundle Up 

You can also see whether your current provider, or potential new provider, will award a discount if you buy multiple policies — like home and auto — through one company.

3. Add a ‘Fit Bit’

Power also suggests looking into UBI, or usage-based insurance.

“I call it fit bit for your car,” she says.

The IBC says several Alberta insurance companies offer UBI programs, which involve a device or app to monitor your driving, with rates tied to the results.

4. Drop collision 

Power says going without collision coverage could especially be an option for drivers of less valuable older vehicles.

5. Fight Theft

Some insurance companies may give you a discount if you install a theft-deterrent system. Check with your provider to see if you could qualify.

6. Up your deductible

This is something that could cost you more should you make a claim, but also lower your annual rate.

What is the industry doing?  

As an industry advocate, the IBC is pushing for regulatory change in Alberta like allowing “pay as you go” plans where rates would vary with mileage, as well as other flexibility.

“In every other industry that you deal with, you can customize everything to your exact specification,” Power says. “In insurance, you can’t. You have two or three choices.

She adds that there are injuries that are considered minor in other jurisdictions, but not in Alberta. The IBC would like that to bring costs to insurers down by changing that too.

“We believe money that hardworking Albertans are putting into the system should go toward care and taking care of people after an accident. It shouldn’t be on cash settlements.”

Source: Global News

 

Insurance rate cap scrap could see 12 per cent hikes for Alberta drivers

The excerpted article was written by ANNA JUNKER

Edmonton Journal

Alberta drivers could possibly see hikes of 12 per cent or higher to their auto insurance rates in the new year, after a cap that kept them artificially dampened was terminated by the province this year.

The insurance industry, and Premier Jason Kenney, said Friday there has been trouble in the industry over the recent years as payouts exceeded money brought in through premiums.

The possible increases come after the province decided not to renew the five per cent cap on rates the previous NDP government put in place in 2017. The Automobile Insurance Rate Board (AIRB), an independent regulatory body, will now be responsible for approving insurance rate hikes.

Kenney said Friday insurance companies were losing money in Alberta due to the cap.

Part of this is because we were facing the prospect of bankruptcies in the industry, leading to less competition which would ultimately be really bad for consumers,” Kenney said

“I understand one of the reasons why the industry has been losing money, paying out more in benefits than receiving in premiums.”

That sentiment is echoed by the Insurance Bureau of Canada’s Western vice-president Celyeste Power.

“Unfortunately, premiums have been increasing for the past four years. The rate cap, while I think it tended to try to push rates down the road and not increase rates, (it) did not lead to actually any decreased rates, some people still saw rate increases under the rate cap of 30, 40 per cent.”

A silver lining to the situation, Power said, is Alberta’s competitive market.

“Not all insurers are in the exact same position. Not all insurers are going in for the same amount of rate change. So it’s a competitive market,” said Power.

“That’s key for consumers to shop around to find the right product that meets their budget needs.”

But it’s unclear right now just how much the rates will increase until the AIRB releases those numbers.

“A lot of companies are in different positions and so they’re not only just looking at the markets differently, and all in their own unique competitive way, but they also look at each consumer differently,” said Power.

“There’s a variety of factors that go into coming up with a premium for each individual.

“Ultimately, when claims increase and no fixes are made, premiums then will follow.”

12 per cent is the ‘average’

However, George Hodgson, CEO of the Insurance Brokers Association of Alberta said on average, companies were losing about 12 cents on every dollar they were bringing in.

“You can expect that the average rate increase would be somewhere north of that 12 per cent in order to bring the industry back to profitability,” said Hodgson.

“That’s an average. In some cases, it might be less, it might be zero. In other cases, it might actually be a fair bit more than 12 per cent.”

Kenney added personal injury claims have been “growing massively,” contributing to higher premium costs.

“Lawyers have found loopholes through the restrictions on personal injury awards that were established by the Klein government,” Kenney said. 

“Those restrictions brought control to the cost of insurance in Alberta but now, as I understand it, personal injury awards have been growing massively, year after year after year and that’s ultimately what’s forcing up premium costs.”

Kenney said his government will be looking into closing those loopholes.

How can we frankly close legal loopholes that have created this huge and unacceptable cost inflation for insurance.”

Rate increases ‘unfair’: NDP

NDP MLA Sarah Hoffman said in response to Kenney’s comments that the rate increases wouldn’t be fair to consumers.

I think it’s really disrespectful to people paying insurance to say well, we just need to do this otherwise companies are going to leave,” Hoffman said. 

She added the same concerns from the insurance industry were brought up when the NDP were in government.

I get it, their job is to fight for their profit margins, our job as elected officials is to fight for ordinary folks and make sure we have a fair system and a five per cent cap seemed fair, and they stayed.”

Power said the key for consumers will be to shop around and ask questions.

“Ask about bundling, ask about increasing your deductible. Look at dropping collision coverage if you have an older vehicle,” Power said.

“Ask about usage-based insurance, I call it Fitbit for your car, which essentially gives you a discount for good driving behaviour. All of these questions are good to ask and finding that right product and finding that right price to meet your needs.”

Trouble After a Vehicle Purchase

raised pickup truckThis inquiry arrived in the DriveSmartBC inbox last Thursday: “I bought a used newer truck from a dealership and was told prior to signing the final documents that the truck had gone through a full safety inspection. Less than two weeks later I was pulled over and issued a ticket for improperly equipped motor vehicle and issued a box 2 inspection order for my 2017 Dodge Ram 3500.”

The person goes on to say that the notice order is vague. He was not sure what to do next, but made an appointment for an inspection at the dealership where he purchased the truck.

Actually, the notice is not vague, it simply says that you must take the vehicle to a designated inspection facility, undergo inspection and make the identified repairs with a pass required within 30 days. The officer will not list what needs to be repaired, the facility will determine that.

There could be a significant difference between what the dealership calls a “safety inspection” and what the inspection facility does. Simply checking that all the lights work, that the tires have sufficient tread and that the brakes are not worn out could be considered a safety inspection. The designated inspection facility is required to check all items in a comprehensive set of standards (that you may find in your local libaray) and make sure that those standards are met.

The only way to know is to ask the dealership what was checked when you are shopping for the vehicle.

That said, the dealership is not supposed to sell you a vehicle that is not roadworthy:

Sale of motor vehicle contrary to regulations

222   A person must not sell, offer for sale, expose or display for sale or deliver over to a purchaser for use a motor vehicle, trailer or equipment for them that is not in accordance with this Act and the regulations.

Probably the only way to escape this requirement is to specify that what is being sold is not meant for use on a highway on the bill of sale.

You may find this FAQ from the Vehicle Sales Authority of BC useful. It outlines your rights when you purchase a vehicle from a dealer and what to do if you have problems.

Of course, if you made the modifications that triggered the officer’s interest after you purchased the vehicle, you are on the hook for that yourself.

If you did not, then you may have some recourse against the dealership for the cost of the inspection and the changes necessary to make the vehicle roadworthy. The VSABC may assist you with that or you may have to conduct a small claims court action if the dealership refuses.

If you knew at the time of purchase that the vehicle was not roadworthy in all respects you may find that willful blindness can limit your options as well.

Finally, you can take advantage of lawyer referral for properly informed advice.

Auto insurance premiums going up in 2020 for many Alberta drivers

BY

Many Alberta drivers will soon pay more to insure their vehicles — in some cases, much more.

In a bulletin sent to brokers, and obtained by Global News, large home and auto insurer Aviva Canada said there would be across-the-board hikes of 15 percent starting January 2020. It also confirmed to Global News that number could go up depending on driving and claims history.

The Insurance Bureau of Canada (IBC) said it doesn’t know exactly how many other insurers operating in Alberta have also applied for rate changes, but added there are a number of them.

IBC’s Western vice president Celyeste Power said they have no choice, considering how claims have been increasing in the province.

“Insurers have actually been losing about 12 cents, on average, on every dollar that they’ve been taking in right now,” Power said. “So they’ve been paying $1.12 for every $1 they’re taking in.”

For drivers like Scott Johnsen of Calgary, an insurance hike couldn’t come at a worst time.

“I’m already paying about 270 bucks a month for two vehicles,” Johnsen said.

He moved to Calgary from Saskatchewan about three years ago and said he was paying about half as much there.

He added his only option may be to park one of his vehicles.

“It sucks,” he added. “Me and my wife both work, we have a small child, so we have to figure it out. Probably buy a bicycle.”

Aviva told Global News it filed for and received permission from Alberta’s rate regulator to increase rates for auto insurance following the UCP’s decision in late August not to renew the rate cap on auto insurance premiums.

In a statement the company said: “The five per cent rate cap imposed by the previous government may have seemed like a simple solution, but it simply delayed necessary increases to keep up with increasing costs.”

Aviva went on to say the cap did not address underlying issues that drive up premiums — things like higher car repair costs, more expensive injury claims and less choice in the marketplace.

IBC went even further.

“None of the issues within the system were addressed in that four years. And now consumers like us, we’re paying for it.”

The Insurance Brokers Association of Alberta also said changes were necessary. Still, officials are bracing for some backlash from customers.

“We knew that the companies were in trouble in terms of profitability, so I guess it isn’t a huge surprise.”

Hodgson didn’t know if everyone would be facing a 15 to 20 per cent hike, but added this would be a perfect opportunity to shop around.

He suggested drivers ask their broker questions and review their coverage.

Both Hodgson and Power also said there could be new opportunities with the rate hikes.

In the past, some insurers cancelled plans or required premiums to be paid upfront, not in installments. Both hope that will now change.

Information on what other insurers will be hiking rates should be available in the coming months.

DriveSmartBC – We’ll See You When You Turn 80!

BC Driver's LicenceSometimes I think that our system is designed to keep us in the driver’s seat. Even in an urban area, you need a vehicle to get around with convenience. Bend a few vehicles? Pay ICBC a (relatively) few dollars more and they take care of the big bills. Can’t or won’t follow the driving rules? Pay for a few penalty points and don’t worry, you have to get a lot of tickets before they take your licence away. Had your licence taken away? Probably not for very long, even if you killed someone.

Last week’s episode of Nova, Look Who’s Driving Now, was about autonomous vehicles. One of the experts interviewed expressed the opinion that driving a vehicle is probably the most demanding cognitive task that most people do on a daily basis. I’m sure that you won’t be surprised to find that there are many examples in the program where drivers disengaged their brain to do things other than drive while they were behind the wheel.

Our system of driver licensing pays fairly close attention to the first three years of a driver’s career. You spend a year as a Learner, pass a test, spend two years as a Novice, pass a test and you are now a fully privileged driver. The restrictions on speed, number of passengers, alcohol use, new driver signs and supervision are at an end.

After that, unless you prove to be incapable, you may pay a renewal fee every five years and not get looked at again until you turn 80.

I once checked a driver who had missed two renewals of his licence. He’d driven for more than 10 years with no licence at all! The only reason I found him was because I was conducting a road check and asking all drivers to show me their driver’s licence.

I’ve been driving for more than 40 years now and can say from experience that there have been many changes to driving in BC since I was 16. In all that time, no one has checked to see if I have been keeping my knowledge current.

There was one test that I had to take at my last renewal, could I still see well enough to drive without corrective lenses? I could, but I still prefer to drive with my glasses on. I like to see where I’m going in as sharp a focus as I can.

Aside from new laws and road improvements that complicate my interactions with others, if I buy a new vehicle I will find myself sitting in the driver’s seat with a host of driving assists. Some are mandated by Transport Canada and others I might choose on my own as options.

After finishing up with my purchase, I could decide to hop in and drive my shiny new computerized vehicle away without any instruction at all about how to maintain, use or misuse all these systems.

So, if I keep my head down, don’t bump into too many things or run afoul of traffic enforcement, I can keep driving until I turn 80 and no one will ever check to see if I should still be behind the wheel and have the requisite knowledge of the system to follow it effectively.

Even after I turn 80, the regular testing is aimed at making sure that I have the necessary cognitive ability to drive, not that I actually know how to.

Can you think of any other complex, changing system today that allows it’s users to carry on without training updates and testing? We’ll see you when I turn 80!

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