If this is your first brush with auto insurance in British Columbia, then you might not be aware that auto insurance is required by law.
Here is a quick overview of the insurance requirements in the province of British Columbia and the coverage options you may want to consider.
Insurance Laws and Penalties
Every person who owns and operates a motor vehicle must meet a set of minimum coverage requirements. These standards are outlined in the Motor Vehicle Act.
To drive in BC, you must first have coverage provided by the Insurance Corporation of British Columbia (ICBC), the government insurer. If you’re stopped by a police officer and discovered to be driving without insurance, you could face a minimum fine of $598.
Meeting the minimal insurance requirements ensures you can legally drive, but it is not an indication that you are sufficiently covered. Most people will choose to purchase additional insurance to avoid being financially exposed in the event of an accident.
Minimum Required Coverage
In British Columbia, all drivers are required to have the following through Basic ICBC coverage:
Basic Vehicle Damage coverage: Covers the repairs of your vehicle when other drivers are responsible – instead of recovering the cost of repairs from the insurance policy of the driver responsible, your own insurance will cover you. Note you will need collision coverage to cover the cost of repairs if your vehicle is worth over $200,000, or if you are responsible for a crash.
Third-Party Liability coverage: If you cause an accident that results in non-vehicle property damage, or the accident occurred out province, then you will be covered up to $200,000.
Enhanced Care: Covers Every B.C. resident for medical costs, wage loss, and more if you’re injured in a car accident. These benefits are available to drivers, passengers, cyclists, and pedestrians, even if you’re at fault for the accident. If you’re unable to work due to an accident, ICBC will cover 90% of your net income. However, income coverage is capped on individuals with gross salaries of $113,000 or higher.
While these are the minimum requirements under ICBC, individuals can opt to purchase optional coverage through ICBC or a Private insurance company. Please contact your insurance broker for more details.
Other Coverage Options
If you only purchase the minimum required insurance, you may end up having to pay for your own repairs. Damage to your vehicle resulting from a collision is only covered when the other driver is at fault.
FACT: Optional coverage such as Third Party Liability, Collision & Comprehensive are not mandatory in BC unless your vehicle is leased or financed.
You may want to consider the following options to avoid any coverage gaps:
Third Party Liablity: Protects you from having to pay costs that go above your basic autoplan limit. Passenger vehicles can purchase up to $5Million, and Commercial vehicles can purchase up to $10Million to protect you in the event of a lawsuit.
Collision: This coverage pays for your vehicle’s repairs or replacement if you collide into another vehicle or static object (wall, building…). Not only can this save you thousands of dollars, but it also covers you in the event of a Hit & Run.
Comprehensive: This is optional coverage that pays for the cost of replacing a stolen vehicle as well as damages caused by vandalism, falling objects, fire and windstorms. It provides additional protection at little cost.
Income Top-Up: Optional coverage can be purchased to protect individuals with a gross income over $113,000 and don’t have sufficient income protection in place (such as through their employer) through another policy.
GAP insurance: According to CARFAX, a car loses up to 20% of its value after twelve months of ownership. GAP insurance will cover the difference between the value of your loan or lease and what the insurance company is willing to pay should your car be stolen or totaled.
Both collision and comprehensive coverage have deductibles, which is the amount you have to pay before coverage begins.
How much car insurance do you need? The best person to help you answer that question is your insurance broker. He will help you find coverage that meets both your budget and your needs.
This content is for informational purposes only, should not be considered financial, medical or legal advice, and no representations or warranties are made regarding its accuracy, timeliness or currency. With all information, consult with appropriate brokers, advisors and attorneys to determine if implementing any recommendations would be in accordance with applicable laws and regulations or to obtain advice with respect to any particular issue or problem.
