Motor Vehicle Insurance in BC

Protects responsible party from personally having to pay the losses they caused up to policy limit and indirectly compensate the innocent injured

Directly protect the injured by covering the losses up to policy limit regardless of who was responsible

• No
• Fault as basis for setting premium
• Criminal sanction still in place
• Compensation reduced for responsible party who committed invidious fault and caused their own injury (e.g. driving intoxicated)

• Responsible party protected from having to pay the very losses they caused
• But not entitled to compensation for own injury (however still covered by social safety net, e.g. health insurance)
• Not much distinction by degree of willfulness

People should compensate anyone they've wronged by paying a sum of money equiv to the losses caused, to restore the injured as nearly as possible to pre-injury condition

Highly individualized

Process is adversarial and uncertain

1. Delay in compensation
2. Sig process or 'transac' costs (lawyers, med experts, lawyer fees)
3. Overcompensate less severe injuries (non-eco losses) and undercompensate more severe injuries

People (both AF and innocent) should be assisted and their losses compensated without regard to cause

• Less adversarial and certain:
• Fault is not a factor so more straightforward
• Compensation (eco losses) paid out quickly
• Lower costs (no lawyer involvement)
• Compensates those with minor errors

• Overcompensate less severe and undercompensate more severe
• Compensation not individualized
• Violate the principle of retribution

1. Choice plans: choose between liability-based and injured-based plans
2. Systems based on liability but with add-on injury benefits
3. Threshold systems: not AF defendants whose injuries exceed a certain definition are allowed to sue

Choose between primarily liab or injury plan. difficulties:

• default for p.h. who do not make a choice (?)
• How to compensate injured (pedestrians) who never made a choice
• How to handle claims involving both 'tort' and 'no-fault'

Compensate most cases on injury basis regardless of fault, but allow those not AF injured whose losses exceed a specified threshold to sue

1. compromise: intro of injury insurance more palatable by retaining liability access
2. vs. injury system:
   • more fair and individualized;
   • proper compensation for severely injured
3. vs. liab system:
   • quicker settlement for minor injuries
   • transac costs reduced (less lawyer involvement) to make overall system more affordable
4. cost savings make it possible to improve compensation for more severe cases

• Descriptive basis: in words what types of injuries exceed threshold
• Monetary basis: permit liab claims when eco loss portion exceed $ threshold
• Combination of both

Descriptive or combination of both

• monetary tends to encourage inflation in awards over time so that liab action can be pursued
• Permits fast settlement for minor claims and limits cases that go to court
• More easily interpreted by courts

• Eco losses:
  1. income support (wage, fatality)
  2. care costs
  3. expenses (replacement services, med service plan
• Non-eco losses ("general damages" in tort):
  1. pain and suffering
  2. lost opportunity (trilogy)

• Payer priority and collateral benefits
• Net vs. gross wage losses
• Structured settlements

• Tort liab law: can double dip (compensation for the same losses from insurance and 'collateral' sources (EI, LTD))
• Injury ins:
  • Try to prevent double dip
  • Insurer as 1st or 2nd payer
  • As 2nd payer, compensate only if no or not enough collateral coverage

• Claimants may still feel entitled regardless of other sources
• May limit insurer's ability to manage med care, rehab and promote recovery until 1st payer resources exhausted
• Difficult to ontain complete data for studying med costs

• Should receive only AT take-home pay
• 10%-20% for expenses of holding a job -> should be 80%-90% of net loss

Advantage: prevent squandering of large awards for future needs

• Equitable / fair benefits
• Affordable and sustainable coverage
• Personal responsibility
• Promotion of wellness