If you are injured in an accident caused by an individual with limited or no insurance, B.C. has a statutory program in place which allows compensation regardless of no insurance or limited insurance. This program is called underinsured motorist protection (“U.M.P.”). Payment under U.M.P. is by ICBC.
In British Columbia, the minimum third-party limits allowed for ICBC insurance is $200,000. As a result, most ICBC claims will never involve U.M.P. because most claims are under $200,000. However, for example, if you are one of several individuals that are injured by an at-fault motorist (the “tortfeasor”) with the minimum $200,000 third party liability coverage, it is not very difficult to have all the injury claims exceed the limits and get yourself into U.M.P. coverage.
The other common situation where U.M.P. coverage applies is where the at-fault vehicle does not have any insurance.
U.M.P. coverage is considered coverage of last resort. That is, ICBC can force you to take all steps necessary to try to recover money from the tortfeasor before you can even access U.M.P. This includes litigating against the tortfeasor and then when you have a judgment, trying to recover against the tortfeasor. If the tortfeasor cannot pay the judgment, you can then proceeding against ICBC to get payment under U.M.P.
In terms of who has access to U.M.P. coverage, generally speaking most British Columbians would have access to this coverage. To have access to U.M.P. coverage, you need to be a considered an insured under the Insurance (Motor Vehicle) Act. An insured includes a member of a household where one of the family members owns an ICBC licensed vehicle. Alternatively, you are entitled to U.M.P. coverage if you have a driver’s license or you have your own vehicle licensed with ICBC.
Under U.M.P., the basic coverage you receive is $1 million without paying anything more. However, you can buy excess U.M.P. coverage, which provides coverage to $2 million. All you or a family member needs to do is pay a premium of around $25 when placing ICBC insurance on one of the vehicles in the household. Obviously, this is $25 well spent because the last thing you want is less than maximum insurance coverage in the event that you or your family member is severely injured by a tortfeasor carrying minimum or no insurance coverage.
As set out above, U.M.P. coverage is coverage of last resort. ICBC uses this to their advantage in some cases by forcing you to pursue the tortfeasor in a lawsuit in Supreme Court. Even if you get a judgment against the tortfeasor, ICBC can make it difficult to recover money from them by forcing you to go after the tortfeasor. Even after taking all the steps, you still do not have access to the ICBC money as ICBC can force the case to an arbitration hearing, which can include a rehearing of some of the issues in the Supreme Court.
Like other ICBC claims, ICBC is involved in the defense of these matters even when you are going after a tortfeasor that does not have ICBC coverage. Often times, ICBC will settle before litigation or allow you to go directly to arbitration if necessary. The decision of ICBC is highly dependant on the approach taken by the adjuster or defense lawyer. Hopefully, your claim is being defended by a reasonable adjuster and defense lawyer.