ICBC is urging customers to register any additional drivers on their insurance policy, as there could be expensive charges if an unlisted driver is found in a crash.
When the Crown Corporation switched to a driver-based system in September 2019, the new policy required that anyone who uses a vehicle for more than 12 days of the calendar year is registered. This involves people living in the same household as each other as well as employees that may use a company vehicle.
ICBC says that this ensures that an insurance premium “accurately reflects” the combined risk of all drivers and that everyone is “paying their fair share.”
They’re also warning of the expensive charges that could occur when an unlisted driver is found behind the wheel after a crash.
If an unlisted person who regularly drives the vehicle is found responsible for a crash, ICBC says that the customer can face a one-time financial charge called the Unlisted Driver Accident Premium (UDAP).
“This financial charge was put in place in order to reduce fraud in the system and better ensure customers don’t choose intentionally to avoid listing higher-risk drivers on their policy,” says the company in a release.
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How the UDAP works and to whom it applies
The UDAP is calculated by looking at how much the primary driver’s insurance premium would have been had the unlisted driver been registered. The difference is then multiplied, with a maximum charge of $5,000 for basic insurance and a maximum of two times the total optional premium.
ICBC offers a product called “Unlisted Driver Protection,” which is said to protect customers from the premium if an occasional driver who isn’t listed on their policy crashes their car. Within the scope of this policy, “occasional” means up to 12 days in a calendar year.
As long as an unlisted driver doesn’t cause a crash, the Unlisted Driver Protection is free, essentially acting as a one-time freebie. If a crash occurs, however, and the driver wants to continue to have this protection, they’ll have to pay for it when they next renew their policy. They can still be liable for the one-time financial consequence that they may have to pay.
There are exceptions to the UDP, however. ICBC says that household members or employees are excluded from the protection, “as they should be listed” on a driver’s policy. Anyone who has driven the vehicle more than 12 times in a calendar year is also excluded.
There’s also no protection for unlicensed drivers or those who have already caused a crash in one of the primary policy holder’s vehicles within the past five years.
The expensive cost of UDAP and how drivers have been affected
Since ICBC’s insurance policy changed in September, approximately 444 customers have faced additional charges due to crashes by unlisted drivers, with an average charge of $2,971.
The company notes, however, that since they recognize that the new model “is an adjustment” for drivers in BC, the optional portion of the charge has been reduced. Customers are still liable for the rest of the premium, however.
One example given by ICBC is a scenario where a married couple, who lived together in Metro Vancouver, was charged with the UDAP.
The primary carrier of the insurance policy had no crashes, while the partner, who had three at-fault crashes in 2018, was unlisted and was found responsible for a crash earlier this year.
ICBC says that should they both have been registered, the insurance policy would have been approximately $1,100 more expensive. They were forced to pay the UDAP, however, because the unlisted driver lived in the same household. In this case, the premium cost $5,000, not including the $3,140 option part of the fee which is being waved until September.