Uneasy Alliances: The Relationship Between Primary and Excess Auto Insurers in B.C.


Updated January 2010

For the past almost 40 years, primary auto insurance in British Columbia has been provided through a form of universal statutory coverage. While the Provincial Crown has exclusivity with respect to primary liability coverage up to the mandatory minimum $200,000.00 limits, private insurers are allowed to compete for liability coverage in excess of those minimum limits. As time goes by, such private insurers are expanding their share of the market and, as a consequence, the relationship between primary and excess insurers in respect of the handling of liability claims is coming under increased scrutiny.

In assessing the relationship between a primary and excess auto insurer in British Columbia, consideration must be given to the following issues:

  • the applicable legislation;
  • industry agreements between primary and excess insurers;
  • common law duties and obligations; and
  • the role of defence counsel in the handling of liability claims.

While there is limited case law in Canada considering the duties and obligations between primary and excess insurers, there is a vast amount of such case law south of the border which provides guidance respecting the principles likely to be adopted by the Canadian Courts.

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