Becker, Lavin & Wessler

Although we have not yet seen the sunny weather associated with summer, the calendar tells us summer is here. This means extra driving and longer trips for many B.C. residents. Before travelling this summer, take the time to ensure you have the appropriate insurance coverage in place before you leave.

Every ICBC insurance policy includes Underinsured Motorist Protection (UMP) coverage of 1 million dollars. If you are injured by a motorist that doesn't have enough insurance to cover your injuries, your wage loss, and other damages, UMP can be accessed to help compensate you for your injuries. But for a small premium you can increase the UMP coverage to 2 million.

Why would you need 2 million in Underinsured Motorist Protection? Going on a family trip means you will usually have your entire family in the vehicle. A collision causing personal injuries caused by an underinsured vehicle could have significant consequences to you and your loved ones, especially if there are other vehicles involved and other people injured that could be seeking a share of that insurance coverage to compensate them for their injuries.

Take this is an example. The minimum third party liability insurance coverage that must carried by a vehicle insured in B.C. is $200,000. Assuming that one of the drivers is 100% responsible for the collision, two families of four involved in a serious two-vehicle motor vehicle collision can lead to 7 ICBC bodily injury claims and one ICBC material damage claim all vying for that $200,000. If one of the vehicles is a total loss and is worth $10,000, that leaves a maximum of $190,000 for the 7 injured people to split. This could be enough if everyone only suffered a minor soft tissue injury in the car accident. But if one parent is unable to work for the rest of their lives due to their car accident injury, if you calculate the lifetime earnings of a 30-year old earning $40,000 a year, working until they are 65, that is $1,400,000.00, or a present value of about $926,000. We haven't even gotten into the treatment costs or medication costs that would be needed for 35 years, or compensation for the pain and suffering, and we have used up all of the $190,000, and $736,000 of the first 1 million dollars of the UMP policy. We haven't even considered the other six people that were injured in this example.

As well, if you are driving in the USA, it is interesting to note the estimates of the number of uninsured vehicles on the roads there. For example, in Washington State, it is estimated by the Insurance Research Institute that 16% of vehicles are uninsured. Think of it this way. For every six cars that pass you on the highway, one of those has no insurance. In Oregon, it is 11% (about 1 in 9) and it rises to 18% (almost 1 in 5) in California.

Increasing your UMP coverage is a simple way to ensure your piece of mind.

The recently reported decision in the case of Ibbitson v. Cooper 2012 BCCA 249 dealt with a person who was injured in a car accident in B.C. Due to the injuries sustained in the car accident, they were unable to work at the same job as they did before they were injured in the collision. However, they were able to earn the same amount of money that they did before the motor vehicle accident injuries doing a different job, but working more hours. The insurance company appealed the award of loss of future earning capacity that the trial judge awarded, claiming that there was no loss of future earning capacity, because the injured person was earning the same amount of money.

The British Columbia Court of Appeal held:

[19]         While in many cases the actual lost income will be the most reliable measure of the value of the loss of capacity to earn income, this is not necessarily so. A hard and fast rule that actual lost income is the only measure would result in the erosion of the distinction made by this Court in Rowe: it is not the actual lost income which is compensable but the lost capacity i.e. the damage to the asset. The measure may vary where the circumstances require; evidence of the value of the loss may take many forms (see Rowe). As was held in Rosvold v. Dunlop, 2001 BCCA 1 at para. 11, 84 B.C.L.R. (3d) 158, the overall fairness and reasonableness of the award must be considered taking into account all the evidence. An award for loss of earning capacity requires the assessment of damages, not calculation according to some mathematical formula.

[20]         In this case, the respondent clearly suffered as a result of the accident; he can no longer perform the job he was engaged in prior to the accident. He has suffered a pecuniary disadvantage as he needs to work longer hours to maintain his approximate pre-accident level of income.

[21]         The trial judge considered pre-trial earnings both before and after the accident, explaining that calculating a precise value for the extra hours was a difficult task, and chose to assess the damages “at large”. Had Mr. Ibbitson worked the same amount of hours post-injury as he had pre-injury, he surely would have been found to have suffered a compensable loss of earning capacity. His entitlement to such damages does not disappear due to his industrious efforts to maintain his level of income, exceeding his legal requirement to mitigate. I agree with the trial judge’s conclusion and analysis.

[22]         I would dismiss the appeal.

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