How B.C. is changing the way vehicle repair and replacement costs are paid

British Columbia is changing the way vehicle repair and replacement costs are paid in a move the province’s public auto insurer says will ensure all policyholders receive a consistent level of vehicle damage protection when they are not responsible for a crash.

Under the new Basic Vehicle Damage Coverage (BVDC), changes will apply to crashes involving more than one vehicle and will automatically be included in the basic insurance that all vehicle owners purchase from the Insurance Corporation of British Columbia. BVDC comes into effect May 1, when ICBC shifts to its Enhanced Care coverage it says will save drivers an average of 20% a year on basic and optional auto insurance. (On Jan. 15, ICBC announced the British Columbia Utilities Commission approved, on an interim basis, a 15% decrease to basic insurance rates — the largest reduction to basic rates in more than 40 years.)

Under BVDC:

• If you are not responsible for a crash, your premiums will not be affected and BVDC pays for the repairs
• If you are responsible for a crash, your premiums could be affected. Optional collision coverage will cover costs related to your damaged vehicle; if you don’t have this coverage, you will be responsible for the repair costs
• If you are partially responsible, your premiums could be affected. Your optional collision coverage pays for the percentage of repair costs that you’re responsible for, and BVDC pays the rest.

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Under the current system, the insurance policy of the driver responsible for a crash pays for the repairs to the other driver’s damaged vehicle, B.C.’s Ministry of Public Safety and Solicitor General explained in a release Friday. If the responsible driver has inadequate third-party liability coverage, the other driver would need to pursue a remedy through the courts.

“Paying for the claim out of your own policy (first-party coverage) will ensure that all policyholders receive a consistent level of vehicle damage protection when they are not responsible for a crash, and they won’t need to rely on the at-fault driver’s third-party liability coverage,” the ministry said.

BVDC will include a maximum coverage limit of $200,000 for vehicle-related damages, which the ministry says is “enough coverage to repair or replace 99% of vehicles in B.C.” Drivers who have bought ICBC’s optional collision coverage will be covered for any vehicle repairs above the $200,000 limit. Collision coverage also ensures that repairs to an owner’s vehicle are covered if they are responsible for a crash.

While BVDC covers drivers even if the other vehicle in the crash is uninsured, it doesn’t cover vehicle damage from a hit-and-run (i.e., when an unidentified driver damages another vehicle and leaves the scene). Starting May 1, protection from hit-and-run vehicle damage will be covered by an optional insurance product. If a client buys ICBC’s collision coverage, as about 80% of ICBC’s personal insurance customers do, they will still be protected from hit-and-runs. Customers can discuss coverage options with their Autoplan broker.

More information on the upcoming Enhanced Care coverage is available at icbc.com/2021.

Feature image via iStock.com/avid_creative