Why Are ICBC Part 7 No-Fault Benefits Called Secondary Benefits?

ICBC Part 7 No-Fault Benefits are known as secondary benefits. This means that they are intended to make up the shortfall after you have used the insurance coverage that you already have. Therefore, to access Part 7 benefits, you must first submit expenses for medical care and any disability plan coverage that you have. The balance of any expenses that are not covered by the disability plan can be submitted to ICBC for shortfall secondary coverage.

For example, you must apply for primary disability coverage from any disability plans available to you through your employer or your spouse’s employment. If there is no other disability plan open to you, then you would need to apply for Employment Insurance Sick Benefits or WorkSafeBC benefits, if you were at work at the time you were injured.

Deadlines for Challenging a Denial of Benefits

If your disability coverage is denied by a primary insurer, there may be several reasons for the denial. Your disability coverage may be individual, a private plan, or a group plan or policy, paid as part of your employment package. In any of these cases, do not delay in taking steps to challenge a denial as there are mandatory deadlines to seek legal recourse. If you miss them, you may be out of luck.

What Happens if I’m Working and I’m Injured in a Motor Vehicle Accident?

If you were working at the time of the accident, ICBC does not provide ICBC Accident Benefits because you are entitled to WorkSafeBC coverage even if you decide not to make a claim with them as the primary insurer. The one exception is when ICBC’s coverage supplements shortfalls not covered by WorkSafeBC. For example, if you need certain equipment, such as a medically necessary vehicle, as required due to your accident that is not covered by WCB but is covered by ICBC.

What is Subrogation for Primary Coverage Insurance Companies?

Section 84 of The Insurance (Vehicle) Act regulates the right of subrogation in a motor vehicle accident with ICBC. If you’re injured in a motor vehicle accident, you may have medical and disability coverage through workplace benefits. Often these benefit policies contain provisions that require the claimant to repay benefits if they recover damages from an at-fault third party.

Subrogation is a contractual right where insurance companies get reimbursed by the at-fault third party for payments made. The purpose of subrogation is to ensure that costs are applied to the appropriate party, and they are not paid twice to the claimant.

Can ICBC Pay Net Wage Loss After Deducting Disability Benefits?

However, ICBC is not allowed to deduct disability benefits if you pay all or part of the premiums of your private disability insurance plan. If there is a right of subrogation or repayment on the part of the insurance company, then ICBC cannot deduct the amount of the disability benefit you received from your claim.

For a disability plan through your employer, ICBC cannot deduct the disability benefits paid to you either. For example, if your net wage loss is $8,000 and you were paid $6,000 in disability benefits, ICBC does not pay you $6,000. They must pay you $8,000.

Should You Sign a Reimbursement Agreement with Your Employer (short answer, No)

Your employer or insurance company may want you to sign a reimbursement agreement. Be careful here as the employer or insurer may be using the reimbursement agreement to alter the employment contract or insurance policy. Review the employment contract or insurance policy and compare the language to the reimbursement agreement. If there is no language in the insurance policy or employment contract that speaks to a right of subrogation then common law rights prevail. At common law, the right of subrogation only arises after full indemnification (you recover 100% of your loss). Meaning, if you have to pay a legal fee you are not technically “made whole” and the right of subrogation (meaning repayment of employment or insurance benefit) may not arise. This can be altered by contractual terms. A reimbursement agreement is a contract and by signing it you may be creating an obligation that otherwise did not exist. However, most contracts, but not all, allow you to deduct legal fees when the right of subrogation arises.

Even where the right of subrogation is a contractual term, you may not be required to pay back the entire amount of disability benefits when you do not receive 100% recovery from the settlement. For example, if you are found to be partly responsible for the accident and recover only a portion of your loss, you may be able to limit repayment on a pro-rated basis. Again, it will depend on the wording of the contract.

If there is an issue in the ICBC claim that prevents you from recovering 100% of your damages, such as litigation, an intervening event (like a second accident), a pre-existing health condition, liability, your employer or insurance company may or may not be entitled to 100% recovery. That is why reviewing the contractual wording of the policy/employment contract and reimbursement agreement is critical.

It’s important to talk to a lawyer experienced in challenging disability claim denials if your employer or insurance company is asking you to sign a reimbursement agreement. Our lawyers can offer guidance on how signing a reimbursement agreement can impact your case.