A Commentary on the Auto Insurance System in BC


Nigel Kent, the head of Clark Wilson’s Insurance Practice Group, was asked to be the keynote speaker at the “Ontario Auto Insurance Conference” hosted by Insight Information Co. in Toronto on December 11, 2003. This is a copy of his address.

In British Columbia, auto insurance is provided by a monopoly, the Insurance Corporation of B.C. (ICBC), a crown corporation first established thirty years ago. It is the largest auto insurer in Canada, with annual premiums of $2.5 million.

ICBC has a network of some 900 “Autoplan” brokers located throughout the province, who deliver completely automated, one-stop shopping for licensing and insuring motor vehicles in the province. It has 5,000 to 6,000 employees, including approximately 75 in-house lawyers, with claims centres in ICBC-owned buildings all over the province. It is a major player, not just in the insurance field, but in the B.C. business environment generally.

ICBC provides universal, mandatory minimum auto insurance coverages including:

  • third party liability coverage up to $200,000;
  • no-fault medical and disability benefits (very generous by the standards of some provinces such as Alberta); and
  • underinsured motorist cover (UMP) for $1 million.

Over and above the mandatory minimum coverage which must be purchased by ICBC, consumers can purchase so-called “optional coverages” in respect of which private insurers can compete with ICBC in the marketplace and which include:

  • third party liability coverage in excess of $200,000; and
  • comprehensive/collision coverage (“own damage”) for the insured vehicle.

Although private insurers are allowed to compete, ICBC nevertheless occupies 85-90% of this “optional” market.