As part of your insurance coverage with ICBC, you get what is called third-party liability coverage. The minimum limits you receive through ICBC are $200,000 coverage for damages you cause to others in an accident. You may use a non-ICBC insurance company to increase the basic limits or you can use ICBC. As the size of claims arising out of accidents can easily reach the millions of dollars, the more third-party liability coverage, the better off you are. We recommend $5 million in third-party liability coverage.
The reason being, if you are sued for damages by another party and you are responsible for the accident, in whole or in part, ICBC will only pay a settlement or judgment against you to the maximum of your third-party liability insurance limits. You are personally responsible to pay any excess.
When you receive a lawsuit (Writ of Summons and Statement of Claim or a Notice of Claim) against you for an ICBC accident, do not panic. The best thing to do is drive over to the nearest ICBC claim centre and give ICBC the legal documents. Assuming you have insurance with ICBC, they will take care of everything from that point on. The only thing you have to do is be involved in such steps as getting interviewed by the defence lawyer, attending an Examination for Discovery to answer questions for the plaintiff lawyer and/or attending a trial.
In a situation where you are told by the defense lawyer the claims from the car accident may exceed your policy limits, it is highly recommended that you consult a lawyer about the prospect of personal exposure to a judgment in excess of the policy limits. At the very least, your lawyer should be encouraging ICBC to try to settle the claims at the policy limits so that you are not personally exposed for any excess judgment. A good lawyer will set up what is called a bad faith claim against ICBC. A bad faith claim is where ICBC does not keep your best interests in mind when they are trying to defend a claim and personally expose you to the excess judgment.
If ICBC is denying you coverage for various reasons such as drinking and driving, a principal operator breach, etc… do not simply ignore ICBC’s denial of coverage especially if you are responsible for the accident and you cause injuries to someone. The reason being, ICBC may defend the claims being advanced against you and may pay out the judgment or settlement but they will then look to you for reimbursement. The best thing to do is hire a lawyer and dispute ICBC’s denial of coverage unless there is no hope of getting coverage.
Remember, if ICBC denies coverage, they administer the claims on the assumption there is no coverage and go after you for the amount they paid out under the claims. You have an obligation to establish coverage under the ICBC policy and you only have a one-year limitation period to sue ICBC over their decision.
So long as you have ICBC insurance coverage, in most situations ICBC will take care of defending any lawsuit against you and pay out any judgment up to the maximum of the policy limit. Your involvement in the case is probably going to be quite minimal.