Ain’t no party like third party coverage
By Paul Hurst
Automobile insurance in North America has developed over the last 100 years, and is based on civil law. In B.C., insurance interacts with the Criminal Code of Canada a bit, but mainly it has to do with contract and tort law. Tort means: having done a civil wrong to someone else. Here, the Provincial Government writes the laws that control ICBC. The Insurance (Vehicle) Act, effective June 1, 2007, is the primary “statute” legislation used by ICBC in its various functions. Attached to most Provincial legislation are “secondary” regulations. The Insurance (Vehicle) Regulation is law that can be changed in committee, making it easier to modify. The Act is more permanent statute law, and requires a vote in the Provincial Legislature in Victoria to make any changes.
Car insurance has two major components. This week I’ll explain third party liability, which is the more important of the two. In a later issue, I’ll get into first party coverage.
In contract law, if you sign a contract written by someone else, you are called the first party. ICBC wrote the contract and is called the second party. Once you cough up the cashish, (aka the “consideration”), the contract is complete and binding on both parties. You are now covered by ICBC for any harm or damage you cause to third parties. Third parties are basically anyone else in North America, besides you and ICBC.
An important principle of Canadian contract law is called “contra proferentem.”
This means ICBC is supposed to interpret the contract in your favour when adjusting your claim. Both parties must act in utmost good faith, in that no one should be telling lies or engaging in deception.
You are only obligated to buy $200,000 in third party coverage from ICBC. Everything else is optional. The rates for third party are based on your driving history, and how long you have been driving. The Claim Rated Scale is used for this.
As part of your basic mandatory coverage, you also receive “no fault accident benefits” automatically. You also get this coverage if you have a B.C. driver’s license. So even if you don’t have a car now, it’s a good idea to get a license. The new ones can be used to cross into the U.S. Another bonus is that you get safe driving credit, even if you don’t drive. After four years of never driving, you will still be given a four-year safe driving discount, because you never made a claim and could not have been at fault. This is a good investment for the future, when you may own a car.
“No fault accident benefits” pay for your basic medical therapy and wage loss if you are hurt in an accident, and not able to work, even it that accident was your fault.
