Forget to renew your vehicle insurance? You are playing a very high stakes game of chance.
And many people just don’t get it.
Perhaps it’s because ICBC is a government organization. Paying premiums might feel like paying a tax.
Forget to pay a tax and there are consequences only if you get caught. You pay the tax and perhaps a bit of a penalty. No big deal.
But it’s not a tax. It is an insurance product. No insurance means no insurance protection. No penalty can be paid to fix the situation.
Insurance works like the lottery. Not purchasing insurance is like not buying a lottery ticket.
If you’ve been playing the same numbers every week for fifteen years but then you forget one week and your numbers come up, you can’t go to the BC Lottery Corporation with a “penalty” and get the million dollar payout.
Consider house insurance. For those of us fortunate enough to own a house, it’s likely to be our biggest asset.
There is a very low risk that your house will go up in smoke, even if you live in forest fringe areas. But we make darned sure not to go even one day without fire insurance. The loss of our biggest asset is just too big a risk.
It’s a similar risk if you go without ICBC insurance. You are putting your house, and any other assets, at risk. And your house insurance will not protect you.
Mandatory ICBC insurance includes a minimum of $200,000.00 of liability insurance. If you cause a crash, ICBC will pay your victim’s losses up to a maximum of $200,000.00.
Without that insurance, you pay for those losses out of your own pocket.
Not many of us have $200,000.00 sitting in our pockets. That’s where our assets, like our house, come in.
ICBC has been very effective at creating a public perception that crash consequences are generally minor. It would sting, a lot, but you wouldn’t expect to lose your house to pay compensation for the “minor” consequences of a crash.
Yes, many of the approximately 350,000 crashes per year in British Columbia come with minor consequences. But many come with very serious ones. The risk of losing your house to an uninsured car crash is much higher than losing your house to a fire.
And it’s not just your own financial security you are putting at risk.
Consider your potential victims. Do you have hundreds of thousands of dollars of equity in your home, or other assets, with which to pay potential claims?
If you don’t, your victim might be left holding the bag, having to dig into his or her own life savings and home equity to pay the consequences of your negligent driving.
A quirk in our automobile insurance system might leave ICBC holding the bag instead, but with you left owing the shortfall to ICBC. That quirk is not universal, though. For example, it does not apply for crashes occurring on our vast systems of logging roads in British Columbia.
For your own financial security, and to ensure your victims do not go uncompensated, my advice is not to let an uninsured vehicle out on the road.
How much liability insurance protection should you purchase? How much risk are you willing to take? My clients regularly suffer losses exceeding $200,000.00, and it is by no means rare for losses to exceed $1,000,000.00.
And give us all a break by maintaining constant, undivided attention to the road ahead. Each of us can work together to reverse the trend of ever increasing crash numbers, which will in turn reduce insurance premiums.