Many people feel very stressed in negotiating with ICBC for a final settlement. They often think that they are not receiving a fair offer. This is often based, at least in part, on a very common misunderstanding of how ICBC compensation for damages claims works.
ICBC is an insurance company that wears several hats, so to speak.
Part of ICBC’s job is to pay its own insured claimants certain benefits, regardless of fault, such as:
- collision coverage regarding vehicle damages &
- ICBC Accident Benefits regarding injuries.
However another separate part of ICBC’s job is defending, pursuant to its third party liability coverage, its own insured negligent drivers who have caused vehicle accidents. ICBC is bound to defend those drivers against people making claims for damages against them. The claimants can potentially sue the driver responsible for the damages they have suffered.
When ICBC is dealing with people claiming against its negligent insureds, it is essentially in the business of buying signed “releases of all claims” from claimants. This is just like all other third party liability insurers.
- The issue to the insurer of the negligent driver is this: what price does it likely need to pay to secure a release from such a claimant.
- An insured is not likely to feel that it needs to pay a great deal to a claimant who:
- had a tough time but is substantially recovered after less than 6 months,
- seems unlikely to be willing to sue and proceed to trial even in Small Claims Court (which can now award up to $35,000 in damages plus litigation expenses) considering:
- the hassle and/or cost involved in such a procedure
- relative to the likely dollar value of the claim by court award.
The word that insurers use for this assessment of a damages claim is its “exposure” respecting a claimant. ICBC’s offer will likely reflect its perception of its exposure to a claimant. It owes this degree of resistance to a claimant to its premium payers and owners (in the case of ICBC, the taxpayers).
So the question of how much ICBC will offer:
- is not necessarily about “fairness”,
- it may well be about the relative negotiating clout of the parties to the negotiation at that point in time in the litigation process.
Having said that, ICBC is owned by the BC government and it has a mandate to be somewhat more socially fair to “third party claimants” than a private third-party insurer may be. This is because parties in government do not want to take flack for patent unfairness by its crown corporation.
Private third-party liability insurers are generally tougher with uninsured claimants who have relatively small claims against one of its insured customers. ICBC usually pays more money to such claimants in order to secure a “release of all claims” than what its “exposure” to that claimant would clearly dictate. Private third-party liability insurers would be poor business people if they paid more than their exposure would dictate. ICBC is more than just a business.
This may not be pretty but it is the reality of insurance companies who handle claims for damages against their third-party insureds and the balancing act they play.
When you are not happy with what ICBC has offered you as a final settlement of your claim for damages ask yourself before you continue negotiating:
- what your bargaining clout is at present and
- how you could increase that clout.
Settlement negotiations: Questions & Answers at: