What are the laws regarding
automobile insurance? The specific laws
regarding insurance in BC can be quite involved. The FAQ section provided by
ICBC does a good job in covering the majority of commonly asked questions and
can be found at http://www.icbc.com/faqs.
What is liability
insurance? Liability covers
bodily injury and property damage to others if you are determined responsible
for an accident, even if you are not driving. Owning the vehicle and lending it
to someone else constitutes responsibility. Liability coverage also pays for
legal fees if you are sued as a result of an accident.
What is comprehensive
coverage? Comprehensive coverage pays for
damage to your vehicle that is not caused by an accident with or without
another vehicle. Natural events - fire, wind and flood - are included, in
addition to theft and vandalism. Damaging encounters with animals are included
What is collision
insurance? Collision pays for damage to your vehicle in
the event of an accident, regardless of whether or not another vehicle is
How are insurance rates determined? Many
different factors contribute to the final insurance rate. Generally, these
pieces fall into the following
information? Age at which a driver's license was first obtained and
your driving record
information? Other primary drivers, other occasional drivers
and their driving histories
information? Year, make, model, primary use (pleasure/work),
how often the vehicle is driven to work or school, business use of the vehicle,
how long you've owned the vehicle, factory safety equipment, presence of an
alarm/immobilizer system, expected annual mileage and postal code at which the
vehicle is normally parked
coverage? Limits on liability and whether or not
comprehensive and collision are
If I make a claim, do I lose my
discount? This is one of the most common
questions and one that is easily misunderstood. Your insurance discount is
based on a stepped discount system based on the number of years without an 'at fault'
accident. The easiest way to understand the system is to use the chart provided
by ICBC that can be found at http://www.icbc.com/autoplan-insurance/understand-costs/understand-discounts.pdf.
Why is the parking postal code
required? Insurance companies want to know
where the vehicle is kept most of the time and if it garaged, driveway parked
or street parked. Areas with higher crime will contribute to higher comprehensive
rates than those with lower crime and so on.
What is a premium? A
premium is just another name for the rate charged by ICBC or your
What is a deductible? A
deductible is a fixed amount of money you pay for each insurance claim. For
example, choosing a deductible of $500 per accident means that for each
accident you pay that amount before the insurance pays. If you chose to add
comprehensive or collision you can vary your rate by adjusting your deductibles.
High deductibles result in lower rates, while low deductibles often mean higher
What if the claim is below the deductible? You
pay the full cost of the claim if it is below your deductible amount. If you
carry a $1,000 deductible for collision and a minor accident causes $700 in
damage, you are fully responsible for the cost.
What is a write-off or a total
loss? When the cost to repair the vehicle is
more than the cost to replace it, the vehicle is generally considered a write
off or total loss. Insurers pay the cost of replacing the vehicle with a
similar make and model to that lost.
Tips for reducing insurance
premiums While reducing liability coverage
and raising deductibles may lower premiums, there are other ways to lessen your
rates without sacrificing any coverage.
clean record Generally, the longer you go
without an at fault accident the better your insurance discount. At the least,
keeping a clean record will prevent surcharges from being added to your
suitable vehicle Certain vehicles are
cheaper to insure depending on their characteristics. Selecting a vehicle that
suits your lifestyle is the best way to ensure you aren't paying a premium for
a type of vehicle that might not be necessary.