Canadian Underwriter

B.C. auto claimant wins dispute over ‘declared value’ in total loss

November 26, 2021   by Greg Meckbach

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The Insurance Corporation of British Columbia has been ordered to pay an extra $5,000 to a client whose vehicle was badly damaged on a trip from California.

In Link v. ICBC, released Nov. 25, the province’s civil resolution tribunal ruled against the auto insurer on a disputed claim with Gordon Link, who had bought a 2019 Lincoln MKC in California through an estate sale.

In early 2021, Link was driving his newly-bought Lincoln towards Canada. To insure the vehicle on the trip home, he bought a seven-day binder from ICBC over the phone on Feb. 2. The vehicle never made it back because on Feb. 4, 2021, it was damaged beyond repair in a crash in Oregon.

The seven-day binder stipulated that in the event of a total loss, the insured will be a co-insurer with ICBC if the “declared value” is less than 90% of the actual cash value. It also stipulated that ICBC’s liability, for a collision, is limited to the lesser of: the repair cost; the “declared value;” or the actual cash value. Link had declared the value to be $30,000.

ICBC paid out Cdn$29,700 on the total loss claim, which is $30,000 minus the $300 deductible.

ICBC assed the pre-accident cash value at $38,552.47.

Before the CRT, Link made two arguments, one of which he lost. Link said when he declared the value at $30,000, he was in the United States at the time. So he reasoned ICBC should have known he meant United States dollars.

CRT member Kristin Gardner disagreed.

“Given ICBC is a Canadian company and Mr. Link paid for the policy in CAD, I find it was reasonable for ICBC to assume Mr. Link was declaring the vehicle’s value in CAD,” wrote Gardner.

But Gardner agreed with Link’s second argument, which was that Link bought the policy without explicitly agreeing limit ICBC’s liability to the vehicle’s declared value.

Because he bought the insurance from the U.S. over the phone, Link did not sign a paper in ink acknowledging the terms and conditions before buying the policy.

“There is no evidence before me that ICBC instructed Mr. Link to read over the policy to ensure it correctly reflected his instructions and that he agreed to the terms. I find ICBC should have known Mr. Link was unlikely to read the policy in detail before leaving for his trip. I also find the terms and conditions on the policy are in small print, under a section in larger print setting out the coverages.”

So ICBC now owes Link $5,000 plus $16.84 interest plus $175 in CRT fees.

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