‘Tis the season 2016 – Driving while impaired and forfeiting your insurance coverage

‘Tis the season for gift-giving, festive decorations and holiday gatherings. For many, it is also the season for drinking wine, egg nog and other alcoholic beverages. As we discussed in our December 2013 and December 2012 blog posts, excessive consumption of alcohol or other substances at holiday gatherings can have significant legal implications for both the hosts and guests.

When individuals think about the advice “don’t drink and drive”, they are often aware of both the potential human consequences (e.g. severely injuring themselves and/or others) and the criminal consequences (e.g. a driving prohibition, fine or imprisonment). What drivers may be less aware of, are the potential consequences that driving while impaired can have for their insurance.

The Insurance (Vehicle) Act, RSBC 1996, c. 231 includes a provision that:

    1. All claims by or in respect of the applicant or insured are invalid and the right of an applicant, an insured, or a person claiming through or on behalf of an applicant or insured or of a person claiming as a dependant of the applicant or the insured, to insurance money under the plan or an optional insurance contract, is forfeited if

[…]

(b) the insured violates a term or condition of or commits a fraud in relation to the plan or the optional insurance contract, or

(c) the insured makes a wilfully false statement with respect to the claim.

Among other conditions, section 55(1.1)(8)(a) of the Insurance (Vehicle) Regulation, B.C. Reg. 447/83 provides that:

    1. (8) An insured shall be deemed to have breached a condition of section 49 and Part 6 where

(a) the insured is operating a vehicle while the insured is under the influence of intoxicating liquor or a drug or other intoxicating substance to such an extent that he is incapable of proper control of the vehicle,

Taken together these provisions mean that an insured will forfeit his insurance coverage if he drives while intoxicated “to such an extent that he is incapable of proper control of the vehicle”. In other words, if someone drives while impaired by alcohol and is involved in a motor vehicle accident, that person could be denied insurance coverage.

One case in which this precise scenario played out is Insurance Corp. of British Columbia v. Prasad, 2015 BCPC 383. In that case, the insured attended a New Year’s Eve banquet, where she consumed a significant quantity of alcohol. She was subsequently involved in a collision with another driver and drove into a snow bank. Evidence from both the other driver and the police officer who was called to the scene showed that Ms. Prasad was intoxicated. The evidence also showed that the defendant’s blood alcohol was .157 when she was driving.  As a result, she was ordered to repay $17,050 in damages to ICBC, which she had received for her motor vehicle accident claim.

Importantly, the Prasad case also shows that an insured will also lose their coverage if they are found to have made a false statement to ICBC regarding a material fact. This is the case even if the insured provides the “statement” by asking his or her lawyer to pass information on to ICBC.

It is hoped that this goes without saying, but please drink responsibly and drive safely. Best wishes for a safe, fun and happy holiday.