When it comes to insurance policies, many people are sometimes confused by the common things that can happen, and specifically what a breach of insurance means.
What it means is that you are being denied insurance due to a breach of your insurance policy or contract. And in simple terms, it means you are breaking your contract.
A breach of insurance can come from many different things, but the most common ones are impaired driving, failing to remain at the scene of an accident, or providing a false statement to ICBC or whoever your insurer is.
There is also something called a misdeclaration policy, which would be if you are using your vehicle for work, but you only have it rated for pleasure use, or for commercial driving. An example of this is if you are an Uber driver, but you do not have your insurance rated for that. As an Uber driver, your policy premiums would be different because you are driving more, meaning you are also more likely to get into an accident.
If you get into an accident and they determine that your misdeclaration is a breach of insurance, you will not be covered.
What happens if you breach the contract you have with ICBC?
If you breach the contract you have with ICBC, then that means you are no longer covered. You may wonder what that means, and the answer is it depends.
Generally, though, it means that you are facing some kind of financial exposure, which is the most significant consequence.
If you are in an accident, and your car is damaged, they are not paying for it. If you have an expensive car then you are out of the loss of that, and if the car is leased, you do not even technically own it, so you are now owing the company who you leased it from.
Financial hardships are not the only consequences you will face either, you could be denied third-party coverage. Third-party coverage is what is used if you hit someone else, where you are at fault for the accident and the other party is either injured or their vehicle is damaged. In these cases where you are covered, ICBC will pay them for the accident.
But if your breach of insurance has led to you being denied third-party coverage, the burden of payment will fall on you.
For example, if you got into an accident, and the other person has damage to their vehicle and physical injury, which maybe amounts to about $50,000, ICBC will pay them 50,000 for the accident. If you are in breach of your contract, then you are in breach of that $50,000 third-party coverage and ICBC will say you have no coverage for it.
This means that ICBC is going to charge you for the damage, through what is called a subrogate, which basically means that they will seek repayment of that amount. Essentially, they will send you a bill, and until you pay it, you will be in debt to ICBC.