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Driving Cases
Occasionally we resolve complaints not by obtaining exactly the
remedy a person wants but by providing them with information, on
options they need to resolve their problem.
In this case we were contacted by a man who told us the
Insurance Corporation of British Columbia (ICBC) would not renew
his driver’s licence until he repaid a driving-related debt of
$360. Mr. K told us he had made a proposal to ICBC to repay the
debt at a rate of $20 a month, but that his proposal had been
rejected.
He told us he needed his driver’s licence so he could find work
in the service industry and that he could not pay his debt while
he did not have a job. He felt ICBC was being unreasonable and
uncooperative in dealing with his situation.
ICBC confirmed for us that it would not agree to the proposed
$20 monthly payment plan suggested by Mr. K because the debt had
been outstanding since 1996. He had a poor history of repayment
with ICBC and he had only made a payment after the refusal to
renew his licence.They had also explained Mr. K could appeal
this decision to the Office of the Superintendent of Motor
Vehicles.
We felt ICBC was acting reasonably in this situation. Happily,
Mr. K was able to pay off his debt in full to ICBC, and he was
able to renew his driver’s licence.
Internal ICBC processes engaged to resolve complaint
Insurance Corporation of British Columbia
2006 Annual Report
A person complained that when he made a claim for the theft
of his truck, the Insurance Corporation of British Columbia (“ICBC”)
said that his insurance was invalid due to an alleged breach of
his contract of insurance based upon information provided about
how long he had been driving. It then imposed a penalty of
$2,400. Mr. R explained that when he renewed his insurance a few
months prior to the theft, the Autoplan agent asked if he had
been driving for 10 years. He replied that he did not know.
After looking into that matter, the agent said he had been
driving for 10 years and was eligible, therefore, for a 10 per
cent discount. Mr. R said he relied on the agent’s assurance
about the 10 years and signed the policy documents. He believed,
therefore, that it was unfair of ICBC to make him pay the
penalty when he had relied on the agent’s information about the
length of time that he had been driving.
After we gave notice of this complaint to ICBC, the Fair
Practices Review Department referred the matter to ICBC’s Claims
Coverage Committee. Subsequently, the committee waived the
alleged breach and refunded the penalty fee. This resolved the
complaint and we closed our file. This internal resolution
involved 15 communications by the Ombudsman’s office with ICBC
over a six-month period to achieve the outcome.
Federal legislation has impact on ICBC claim settlement
Insurance Corporation of British Columbia
2006 Annual Report
Ms. G contacted us with a
complaint that the Insurance Corporation of British Columbia (ICBC)
had treated her unjustly by offering her a settlement which she
believed did not fully compensate her for her losses. At issue
was whether the settlement should take into consideration the
recipient’s requirement to declare the amount in her income tax
return.
Ms. G explained to us that she
had made a claim to ICBC for lost income relating to an accident
involving a logging truck she owned. Ms. G and ICBC could not
come to an agreement on a settlement so an independent
accountant was brought in to make a recommendation.
Based on the recommendation of
the accountant, ICBC made a settlement offer to Ms. G. The
Insurance (Motor Vehicle) Act provides that a person is entitled
to recover damages for “net income loss”. This appears to be
based on ICBC’s understanding that, under federal legislation,
income tax is not payable on insurance payments and on the
rationale that insurance settlements are intended to compensate
people for what they have lost, but not benefit them beyond what
they normally would have received if the accident had not
occurred. Therefore, in accordance with the legislation, the
gross amount of the compensation calculated for Ms. G’s loss of
income was reduced by an amount representing the income tax that
would have been payable and ICBC offered Ms. G a settlement for
her “net income loss”.
However, Ms. G had been told by
a local Canada Revenue Agency (CRA) official that insurance
proceeds received for loss of revenue from her business would be
considered by the CRA to be taxable business income, which she
would have to declare in her income tax return. Therefore, she
believed that ICBC should pay her the gross amount of her income
loss, not the net amount.
Given the circumstances, it
appeared to us that the application of the provisions of the
Insurance
(Motor Vehicle) Act to Ms. G’s
claim might have an unjust effect. Since her settlement would
not be income tax exempt, Ms. G would be required to declare it
in her tax return and pay any applicable income tax. Therefore,
it might be unfair of ICBC to make a reduction (representative
of an estimated amount of income tax) to the compensation it was
offering her. We discussed this matter with ICBC, and indicated
that we felt Ms. G should not receive less than her actual loss
because of the existence of a possible conflict between the
federal and provincial legislation. This did not appear to be
the intent behind the provincial legislation.
In light of the circumstances,
ICBC agreed to pay Ms. G the net amount of the settlement as an
interim payment. ICBC also agreed that upon receiving proof that
Ms. G had declared the interim payment in her income tax return,
it would provide her with an ex gratia payment in the amount of
the difference between the net and gross figures. Additionally,
ICBC told us that it would refer this matter to its legal
department for further review.
Woman wants her impounded car back - says she’s not at fault
Office of the Superintendent of Motor Vehicles
2006 Annual Report
A woman contacted us to complain
about her vehicle being impounded after her ex-husband was
caught driving the vehicle without a valid driver’s licence.
Ms. D contacted the Office of
the Superintendent of Motor Vehicles (OSMV) to request a review
of the impoundment because she said her husband had been using
her vehicle without her consent. She told us that although the
OSMV did review her situation, it did not find in her favour and
instead chose to confirm the impounding of the vehicle.
Ms. D maintained that she was
not at fault and wanted her vehicle to be released to her and
the impoundment fees waived on compassionate grounds. She
complained that OSMV’s decision to maintain the impoundment was
unjust.
We spoke with staff at OSMV
regarding Ms. D’s complaint. They agreed to contact Ms. D to
explain to her the grounds for impounding a vehicle and to
discuss the review of her situation with her. Ms. D contacted us
to say that she now had a better understanding of the situation
and that she was applying for another review of her file.
Following this second review,
OSMV agreed with Ms. D’s position that her estranged husband had
been using her vehicle without her knowledge at the time the
vehicle was impounded.
To resolve this complaint, OSMV released Ms. D’s vehicle and
agreed to waive the towing and storage costs.
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