A Beginner’s Guide to Auto Insurance in BC: From Basic Coverage to Optional Protection

How Auto Insurance Protects Others — Third Party Liability (TPL)

In British Columbia, ICBC requires vehicle owners to purchase Basic Insurance to legally operate their vehicles on public roads. One of the coverages included in Basic Insurance is Third Party Liability (TPL).

For most personal vehicles, Basic TPL provides $200,000 in liability coverage. Certain commercial vehicles may be subject to different basic coverage requirements.

Suppose you are involved in an accident and damage someone else’s property. If the claim adjuster determines that you were at fault and legally liable for the loss, your TPL coverage may respond when the other party seeks compensation from you.

However, by today’s standards, $200,000 may not be enough to cover a serious liability claim. You can therefore purchase additional liability coverage on top of Basic TPL.

Depending on the insurer and vehicle use, available limits may include $300,000, $500,000, $1,000,000, $2,000,000, $3,000,000, and up to $5,000,000. Certain commercial vehicles may qualify for limits of up to $10,000,000.

For personal vehicles, $1,000,000, $2,000,000, and $3,000,000 are common options. The premium difference between some limits may be relatively small, making it worthwhile to compare the available options.

But if I hit another vehicle, does TPL always pay for the other driver’s damage?

Not necessarily.

Since 2021, BC has operated under ICBC’s Enhanced Care system, a no-fault insurance model. Under this system, most vehicle damage claims involving BC-insured vehicles are handled through each vehicle’s own insurance coverage rather than the traditional process of pursuing compensation through a lawsuit.

Damage to eligible BC-insured vehicles is generally handled under ICBC’s Basic Vehicle Damage coverage, subject to the applicable rules and policy terms.

That said, TPL continues to play an important role in situations involving damage to non-vehicle property, belongings inside vehicles, business interruption, environmental cleanup, and accidents occurring outside BC, depending on the circumstances and applicable coverage.

How Auto Insurance Protects Your Own Vehicle — Collision and Comprehensive

In addition to ICBC Basic Insurance, you can purchase optional coverage to protect your own vehicle. Two of the most common types are Collision and Comprehensive coverage.

Together with TPL, these are often considered the three core components of auto insurance.

Collision Coverage

Collision Coverage primarily protects your vehicle against damage caused by a collision.

For example, suppose you accidentally hit another vehicle or a fixed object while driving, and the claim adjuster determines that you are responsible for the accident.

If you have Collision Coverage, ICBC can cover the eligible repair costs for your own vehicle, subject to your policy terms and deductible.

Hit and Run Coverage

When discussing Collision Coverage, it is also worth understanding Hit and Run Coverage.

As the name suggests, a hit-and-run occurs when a driver involved in an accident leaves without stopping or providing the information needed to identify them.

Common examples include returning to your parked vehicle and discovering that another driver has hit it and left, or finding unexplained collision damage on your vehicle after it has been parked.

Hit-and-run protection is generally included with Collision Coverage. However, if you do not have Collision Coverage, ICBC offers a separate Hit and Run option, subject to its eligibility requirements and terms.

Comprehensive Coverage

Comprehensive Coverage primarily protects against vehicle damage caused by events other than ordinary collisions.

Examples may include:

• A rock striking your windshield and causing a crack.
• Vandalism or unexplained damage to your vehicle.
• Vehicle theft.
• Rodents chewing through wiring under the hood.
• Other losses that fall within the policy’s covered perils.

Because Comprehensive covers a broad range of events beyond ordinary collisions, it is sometimes informally referred to as “full coverage.”

However, Comprehensive does not mean that every type of vehicle damage is covered. The actual protection depends on the policy wording, exclusions, and cause of loss.

If you have Comprehensive Coverage, ICBC or certain insurers may also offer windshield chip repairs without a deductible when the damage meets their eligibility requirements. For example, ICBC provides information about eligible glass repairs on its official website:

ICBC — Glass and Windshield Claims

Be sure to check the current requirements and applicable terms before arranging a repair.

Understanding Your Deductible

Whether you make a claim under Collision, including an eligible hit-and-run claim, or Comprehensive Coverage, does that mean the insurer pays for all the repairs?

Not necessarily. This brings us to another important insurance concept: the deductible.

A deductible is the amount you must pay out of pocket for each covered claim before the insurer pays the remaining eligible amount.

For example, suppose a claim adjuster determines that your vehicle requires $5,000 in repairs and your deductible is $500.

You would pay the first $500, while the insurer would cover the remaining $4,500, assuming the full repair amount is covered under your policy.

Both Collision and Comprehensive Coverage generally have deductible options. Common choices may include $300, $500, $1,000, and $2,500, depending on the insurer and product.

ICBC’s separate Hit and Run Coverage has a $750 deductible.

Generally, a lower deductible means a higher premium, while a higher deductible may reduce your premium. This is because you agree to bear a larger portion of the cost if a claim occurs, reducing the amount the insurer would need to pay.

However, increasing your deductible does not necessarily result in a proportional reduction in premium. The actual savings depend on the quotes offered by ICBC and other insurers, so a higher deductible may not always provide substantial savings.

When choosing a deductible, consider not only how much you can save annually, but also whether you could comfortably afford the out-of-pocket expense if an accident occurred.

For many drivers, $300 or $500 deductibles are common choices because they offer a reasonable balance between annual premiums and the amount payable when making a claim.

Some drivers who purchase their vehicles through a dealership may also have an additional Vehicle Replacement Value policy, sometimes informally called “new car insurance,” arranged through a road agent who works with multiple dealerships.

Depending on the policy, this additional insurance may reimburse the deductible paid under the primary auto insurance policy after an eligible claim. If the reimbursement limit is $500 for both Collision and Comprehensive claims, the owner may choose a $500 deductible on the primary policy to align with the additional coverage.

Additional Optional Coverage

The coverages discussed so far are relatively straightforward and commonly purchased. However, there are other options that can provide useful protection in a wider range of situations.

ICBC offers packages such as RoadStar and Roadside Plus, which bundle different additional benefits to provide drivers with more support beyond Basic Insurance.

1. Loss of Use (LOU)

If your vehicle becomes temporarily unusable following a covered event, such as a collision or theft, Loss of Use (LOU) coverage can help pay for eligible alternative transportation expenses.

Depending on the policy, this may include a rental vehicle, taxi, or rideshare services such as Uber, subject to the applicable limits and conditions.

Coverage may continue until your vehicle has been repaired, your claim has been settled, or your available limit has been reached, depending on the policy wording.

This coverage can be particularly useful in Canada, where many people rely heavily on their vehicles for daily transportation. For those who do not live near a SkyTrain station or convenient public transit, suddenly losing access to a vehicle can be extremely disruptive.

Some body shops also offer courtesy vehicles while your car is being repaired, which can help reduce the inconvenience. However, if your vehicle is declared a total loss or stolen and not recovered, Loss of Use coverage can be especially valuable.

In addition to purchasing it through an ICBC package, you may be able to obtain LOU separately from ICBC or another insurer.

2. Rental Vehicle Coverage

Another important option is Rental Vehicle Coverage, which provides selected insurance protection when you rent a vehicle.

Depending on the product, it may include coverage such as TPL, Collision, Comprehensive, and Loss of Use. It can be more economical than purchasing comparable coverage directly from a rental company, although the price and protection will depend on the specific product.

Some products apply to rental vehicles in Canada and the United States, with coverage for each rental limited to a specified period, such as 30 days.

Depending on the policy, eligible vehicles may include traditional rental cars and certain courtesy vehicles or vehicles rented through peer-to-peer car-sharing platforms such as Turo, provided the rental arrangement meets the policy requirements.

However, a vehicle borrowed informally from a friend or another individual may not qualify.

You may be able to purchase this coverage as part of an ICBC package or separately through ICBC or another insurer. If purchased separately, the coverage arrangement may differ from an annual policy and could require you to arrange coverage for each rental.

Before renting a vehicle, confirm the applicable policy wording, eligible rental arrangements, territorial limits, and maximum rental period.

3. Emergency Roadside Assistance / Expense Repayment

If your vehicle suddenly becomes undriveable because of a mechanical breakdown, flat tyre, locked keys, or running out of fuel, Emergency Roadside Assistance or Expense Repayment may help reimburse eligible roadside service expenses.

If the vehicle cannot be made roadworthy at the scene, eligible towing costs and reasonable expenses to complete your journey, such as taxi fares, may also qualify for reimbursement under the applicable terms.

It is important to understand the limits of the specific product. For example, ICBC’s Roadside Plus benefits have been subject to per-occurrence reimbursement limits and restrictions on the number of eligible events. These benefits should not be confused with comprehensive roadside assistance memberships.

If you want more extensive roadside support, you may wish to compare services offered by BCAA or check whether your credit card includes roadside assistance benefits.

4. Enhanced Accident Benefits

So far, we have focused primarily on protecting your vehicle. But what happens if you are injured in a motor vehicle accident?

Fortunately, under BC’s Enhanced Care system, eligible people injured in a motor vehicle accident may qualify for Enhanced Accident Benefits through ICBC.

These benefits can help cover eligible medical and rehabilitation expenses, income replacement, and other necessary support.

Eligible individuals may include drivers, passengers, cyclists, and pedestrians. Benefits are generally available regardless of who was at fault, subject to eligibility requirements and applicable limits.

Following an accident, eligible medical and rehabilitation services may include chiropractic treatment, prescription medication, physiotherapy, counselling, dental care, and home support services.

Certain treatments are pre-approved within the applicable guidelines, meaning that eligible care can begin without waiting for a final determination of fault. You will generally need your ICBC claim number and must meet the relevant treatment and eligibility requirements.

If you are injured and unable to work, Enhanced Accident Benefits may also provide income replacement. For eligible individuals, income replacement is generally calculated at 90% of net income, subject to the applicable maximum insurable income and other program rules.

For further details, visit ICBC’s official website:

ICBC — Overview of the Injury Claims and Recovery Process

Conclusion: Choosing the Right Auto Insurance for Your Needs

After reading this guide, I hope you have a clearer understanding of BC’s auto insurance system and the differences between the various types of coverage.

Auto insurance is about more than simply purchasing a policy and paying an annual premium. Each type of coverage serves a different purpose, and factors such as your driving experience, driving habits, vehicle value, financial circumstances, and daily transportation needs all influence which coverage combination may be most suitable for you.

Buying more insurance does not automatically mean you are better protected, just as choosing the cheapest premium does not necessarily mean you are getting the best value.

What matters most is understanding what each coverage does, its limitations, and the deductible you may need to pay, then finding a balance between your premium budget and the risks you want to protect yourself against.

As an insurance broker, my goal is not simply to provide quotes. I also want to help every client understand what they are purchasing, what their policy covers, and how their coverage may respond when they actually need to make a claim.

If you have questions about your current auto insurance or would like to understand the differences between coverage limits, deductibles, and optional benefits, feel free to contact me. I would be happy to review your needs, explain the available options, and help you find a coverage solution that better suits your circumstances.

Understand your coverage. Make informed decisions. Get more value from every dollar you spend on insurance.