B.C. to limit auto insurance claims, speed up process to settle disputes

VICTORIA _ The British Columbia government has introduced legislation that will attempt to restore the finances of the public auto insurance agency.

Attorney General David Eby has promised changes to the Insurance Corporation of British Columbia as it faced a forecasted deficit of $1.3 billion.

The proposed changes introduced Monday in the legislature include a limit of $5,500 for pain and suffering on minor injury claims and faster resolutions of disputes.

If approved, the changes will set up a resolution process for cases under $50,000 that allows them to be resolved in as little as 90 days instead of two to three years.

Eby says for years, drivers have had to pay more to cover the agency’s spiralling legal and administrative costs.

The government says the changes are necessary to help address the massive growth in the cost of injury claims, which jumped 80 per cent between 2009 and 2016.

My leased car was in an accident. Do I have to keep making payments?

My leased car was in an accident. Do I have to keep making payments?

REPEAT

Within a month of taking possession of my car on lease, it was in an accident. I informed the insurer and the car company within hours – but I am shocked to see that Canadian Dealer Lease Services is still deducting payments from my account. When contacted, it informed me that the lease is active and it will keep deducting payments. Is this correct practice? I don’t have a car now. – Samuel

After a crash, payments don’t stop just because your car can’t go.

If your car is in the repair shop, you have to keep paying your financing or lease payments until it’s fixed and you can drive it again.

In other words, it’s not your bank’s or finance company’s problem – you’re the one dealing with the insurance company. If your policy allows it, you might get a rental car.

“In the case of vehicle damage, the consumer who has taken out the policy would submit a claim to fix the vehicle,” said Pete Karageorgos, Ontario director of consumer and industry relations with the Insurance Bureau of Canada (IBC), in an e-mail. “There may be coverage for renting a vehicle while the owner’s vehicle is being repaired – the owner’s insurance policy would extend to cover the rental vehicle.”

Total responsibility?

And if the crash totals your car? You’ll keep making normal lease payments until the claim is settled.

“Lease payments will continue from the date of loss until Canadian Dealer Lease Services receives the agreed settlement cheque from the insurance company,” said Andre Safah, manager, client services with Canadian Dealers Lease Services, in an e-mail. “At that point, all lease payments that were paid after the date of loss will be refunded to the lessee less any deductible amount under the policy and no further payments will be deducted.”

After the settlement, the leasing company might consider it case closed.

“We will accept the proceeds of insurance, provided there is no denial of coverage in whole or in part and the lessee is not in default in paying any amount due to us,” Safah said.

But you could end up owing money after the settlement, depending on your lease or loan agreement.

“Usually, your insurance company will pay your lease financing company the market value of the vehicle directly,” Lynne Santerre, spokeswoman with the Financial Consumer Agency of Canada, said in an e-mail. “If the insurance payout is less than the amount you owe on your car lease, then you are responsible for paying that difference.”

For example, if your insurance company decides the replacement value of your car is $10,000 but you still owe $16,000 on your loan or lease, you’d have to cover the $6,000 shortfall, Santerre said.

“GAP (Guaranteed Auto Protection) insurance will usually cover this difference and pay the remaining balance you still owe on your lease,” Santerre said. “Many finance companies require GAP insurance as part of the lease, while others offer it as an option.”

Lease of your worries?

When leasing or financing a vehicle, read through the agreement so you can understand what you’re responsible for, Karageorgos said.

“If leased or financed, the name of the leasing or financing company would be included on the application for insurance and on the policy as having an interest in the vehicle,” he said.

“Your obligations could include everything from mileage to condition of the vehicle at the end of the lease period, and possibly specifications as to how repairs to the vehicle are completed following a crash.”

Ability to sue after traffic accident depends which insurance you choose

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New Case: ON Coverage Laws Limited If MVA In BC

Article by Laura Emmett

On April 10, 2018, the Divisional Court released an important decision regarding ATV incidents outside of Ontario. Specifically, in Benson v. Belair Insurance Co. Inc., the Divisional Court considered whether the Claimant was entitled to statutory accident benefits arising from an incident while in British Columbia.

Mr. Benson was a resident of Ontario who had been living in British Columbia. He was injured after he fell from an ATV that was being driven on a public trail owned and occupied by the Northern Rockies Regional Municipality. The ATV was owned by a resident of British Columbia. Since there was no requirement that the ATV be insured in British Columbia, it was not.

At the time of the accident, Mr. Benson had his own insurance policy with Belair in Ontario. The policy was a standard OAP-1 that did not include coverage for any ATVs.

The Claimant applied under his own insurance policy for accident benefits. The Insurer denied coverage because the ATV was not an “automobile” within the meaning of the Statutory Accident Benefits Schedule – Effective September 1, 2010. The Claimant filed a dispute with the Financial Services Commission of Ontario. The Arbitrator found that the ATV was not an automobile. While the Claimant appealed the finding, the Director’s Delegate dismissed the appeal.

On Judicial Review, the Divisional Court noted that the question to be determined was whether an ATV that was owned, registered and operated in British Columbia was an automobile covered by the Ontario SABS.

The Divisional Court held that the appropriate legislation to be applied was the legislation in British Columbia. The ATV was operated and the accident happened in British Columbia. The decision to have, or not to have, insurance for this vehicle was made in British Columbia. As a result, British Columbia legislation must determine whether there is entitlement to benefits resulting from the accident.

Reference was made to the Court of Appeal’s decision in Adams v. Pineland Amusement Ltd. (2007 ONCA 844) which found that in determining a case of liability insurance, “the proper question is whether the vehicle [involved in the accident] required motor vehicle insurance at the time and in the circumstances of the incident.” Applying this question in the present case, at the time and in the circumstances of this accident, the ATV was not insured.

The Divisional Court also held that there was no basis to claim that Mr. Benson had a legitimate expectation that Belair would cover an accident involving ATVs as there were no ATVs listed on the subject insurance policy.

The last issue considered by the Divisional Court was the Ontario Off-Road Vehicle Act which stated that “no person shall drive an off-road vehicle unless it is insured under a motor vehicle liability policy” under the Ontario Insurance Act. The Divisional Court concluded that it was reasonable to assume that the provision only required this of ATVs in Ontario, not ATVs in British Columbia.

This decision is of assistance to insurers who are presented with claims outside of Ontario. It is clear that in determining whether the vehicle is an “automobile” within the meaning of the SABS, the trier of fact will consider the applicable law in the jurisdiction where the incident occurred; not the law in Ontario. A word of caution, however, the Divisional Court has left the door open for another party to argue that there was an expectation that the vehicle they were operating was an “automobile” under the SABS. This limited exception is only where a similar vehicle was listed on their own Ontario insurance policy.

See Austin Benson v. Belair Insurance Co. Inc., 2018 ONSC 2297 (CanLII)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Source: Mondaq

Fraser Institute study lists bad decisions, failure to act, as ICBC debt mounted

A study from a Vancouver-based public policy think tank blames what it terms “misguided decisions” and runaway costs for the current financial crisis at the Insurance Corporation of British Columbia.

The Fraser Institute study, authored by John Chant, a professor emeritus of economics at Simon Fraser University, finds the corporation’s problems began years ago and grew steadily worse with government inaction.

The newly elected New Democrat government confirms the corporation faces a $1.3 billion loss this fiscal year and Chant says the public insurer had a $889 million loss last year.

He says the corporation’s basic insurance operation, which has a monopoly over mandatory coverage, suffered persistent losses for years but received infusions of $1.4 billion between 2010 and 2017 from the then-profitable optional insurance side of the business.

The former Liberal government also transferred $1.2 billion to provincial coffers from optional insurance but Chant says when that side of the corporation also began losing money, no action was taken to boost rates or stop the slide.

The corporation’s current financial position is unsustainable, he says, noting rate hikes totalling 44 per cent would have been required between 2015 and 2017 just to offset rising costs.

“Faced with exploding costs, the previous B.C. government had a choice: contain the costs, take the unpopular decision to increase rates substantially, or enact large-scale reform of the basic auto insurance system in the province. In the end, the government chose to do nothing,” Chant says in a news release.

No one from the Liberal Opposition was available to comment on the report.

Chant says the current government deserves credit for acknowledging the problems but the corporation’s role must be rethought and any fix will not be simple, or inexpensive.

“The kind of Band-Aid solutions they’ve used in the past simply won’t be enough to fix its problems moving forward,” he concludes.

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