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Underinsured Motorist Protection

DBM Law Blog

If you are injured in a motor vehicle accident, caused by an individual who has limited or no insurance, or involved in a hit-and-run where you cannot find the driver, British Columbia has a statutory program put in place which allows for the compensation to be awarded regardless of no insurance or limited insurance.

Section 20 of the Insurance Vehicle Act provides a minimum coverage of up to $200,000 plus legal costs and disbursements for all claims. However, for losses above the $200,000 threshold, Section 148.1 of the Insurance (Vehicle) Regulation provides a program, Underinsured Motorist Protection (UMP), to provide further up to a maximum of $5,000,000 payed by ICBC.

UMP coverage of $1 million is mandatory for all BC insured drivers, extension coverage can provide a total UMP limit of $2 million, $3 million, $4 million, or $5 million. Any insured BC driver may change, add, or cancel their coverage at any time.

Although most British Columbia drivers will have access to UMP, ICBC will force that individual to take all necessary steps in attempting to recover damages from the at-fault motorist before they will allow access to UMP. This includes litigation against the at-fault motorist, attempt to recover the damages from the at-fault motorist, and then if the at-fault motorist cannot pay finally you may proceed against ICBC for UMP coverage.

A total UMP coverage will allow you to cover things such as medical costs, rehabilitation, and lost wages for:

  • You and all members of your household in the vehicle with Extension UMP coverage.
    • Each vehicle in your household must have Extension UMP added in order to have complete coverage in all vehicles you own.
  • You and all members of your household who are injured as pedestrians or cyclists, or in a vehicle other than your own.

UMP coverage does not apply to crashes in any province, territory, or state where the law does not allow an individual to sue and recover damages as a result of a vehicle crash sustaining injury or death.

The limits on UMP coverage are all inclusive limits, meaning there is a maximum of either $1 million or $2 million depending on coverage. From that, ICBC is able to deduct the following in accordance with Section 148.1 of the Regulation:

  1. Paid or payable by the corporation under section 20 or 24 of the Act, or recoverable by the insured from a similar fund in the jurisdiction in which the accident occurs,
  2. Paid or payable under section 146,
  3. Paid or payable under Part 7 or under legislation of another jurisdiction that provides compensation similar to benefits,
  4. Paid directly by the underinsured motorist as damages,
  5. Paid or payable from a cash deposit or bond given in place of proof of financial responsibility,
  6. To which the insured is entitled under the Workers Compensation Act or a similar law of the jurisdiction in which the accident occurs, unless
    1. the insured elects not to claim compensation under section 10 (2) of the Workers Compensation Act and the insured is not entitled to compensation under section 10 (5) of that Act, or
    2. the Workers’ Compensation Board pursues its right of subrogation under section 10 (6) of the Workers Compensation Act,
      1. to which the insured is entitled under the Employment Insurance Act (Canada),
      2. to which the insured is entitled under the Canada Pension Plan,
    3. Paid or payable to the insured under a certificate, policy or plan of insurance providing third party legal liability indemnity to the underinsured motorist,
    4. Paid or payable under vehicle insurance, wherever issued and in effect, providing underinsured motorist protection for the same occurrence for which underinsured motorist protection is provided under this section,
    5. Paid or payable to the insured under any benefit or right or claim to indemnity, or
    6. Paid or able to be paid by any other person who is legally liable for the insured’s damages;


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