Chances are good that when you think about car insurance your first thought is about how much it is going to cost you rather than how well it is going to protect you if something goes wrong. You might even be tempted to shade the truth about who will be driving your vehicle or how they will be using it to reduce those costs. Be very careful how you make decisions about insurance as making poor choices can put you at huge financial risk post crash.
Insurance is a contract between you and an insurance company. Pay the premiums and the company will protect you from financial losses specified in the contract.
The risk is spread among all the policy holders in an effort to make the premiums more affordable, but you may have to pay a higher premium if you are at higher risk for making a claim. Penalty point and driver risk premiums are used by ICBC in addition to your collision history to set rates.
The surest way to keep premiums low is to keep the number of claims low. This concept appears to be lost on many drivers today. Some make no connection between the way they drive and the risk that they present.
We consider insurance so important that a policy must be in effect in order to drive. You must carry a liability card while driving and produce it to police on demand. Should you be involved in a collision, you must produce particulars of the liability card in writing to anyone suffering loss or injury or who witnessed the collision if they request it.
In British Columbia, we all have to buy our basic third party liability insurance from ICBC. This protects us from the damage that we do to others if we are at fault in a collision. Basic Autoplan covers up to $200,000.00 but a quick look at some of the case law on this site will suggest that this is nowhere near enough. An honest, careful discussion with your Autoplan Agent can help you decide what is appropriate for your circumstances.
We can buy additional third party insurance and coverage for our own damage; collision, fire, theft, vandalism and other losses from ICBC or other private insurance companies. In this case, it could pay you to compare insurance companies to see if their rates for similar or better coverage costs less than an ICBC policy.
According to Hergott Law, the best $25.00 that you will ever spend on insurance is for Underinsured Motorist Protection.
Now that you are insured, be careful not to do anything that would breach your contract. Driving while impaired, without a driver’s licence or with a suspended licence, evading police action, racing or making a misrepresentation on the application for insurance can all void your coverage.
In some contract breaches, ICBC will pay for damages done to others and then expect you to reimburse the cost. The corporation may also cancel or refuse to issue a driver’s licence or vehicle licence and number plates for outstanding motor vehicle-related debts.
Cst. Tim Schewe (Ret.) runs DriveSmartBC, a community web site about traffic safety in British Columbia. For 25 years he was an officer with the Royal Canadian Mounted Police, including five years on general duty, 20 in traffic and 10 as a collision analyst responsible of conducting technical investigations of collisions. He retired from policing in 2006 but continues to be active in traffic safety through the DriveSmartBC web site, teaching seminars and contributing content to newspapers and web sites.