Auto insurer found partly responsible for six-month runaround to cancel policy

B.C.’s Civil Resolution Tribunal found the province’s public auto insurer one-third responsible for a driver’s six-month bureaucratic runaround trying to cancel his auto insurance after the bank repossessed his car.

That said, the tribunal chastised the driver for simply stopping payment on his auto insurance without making a more proactive attempt to cancel his insurance. For the driver, cancelling the insurance turned out to be problematic because the process required him to locate the licence plates of his car after the bank repossessed it and auctioned it off.

“It would have been a simple thing for ICBC to inform Mr. Shajahan where his plates were,” the tribunal stated in a decision released Aug. 15. “With that information, Mr. Shajahan could have easily cancelled the insurance. I find that by doing nothing for over six months, ICBC breached its duty of good faith to Mr. Shajahan.”

Shajahan bought the ICBC policy for his car effective Dec. 23, 2022, with a monthly payment plan.

Around April 2023, Shajahan’s bank repossessed the car. He then stopped paying his insurance premiums. ICBC sent him letters on May 16 and 23, 2023, informing him that his preauthorized payments did not go through. The letters said he still owed ICBC for the monthly premiums.

Shajahan phoned ICBC on June 1, 2023. He told them he no longer possessed the car and did not have the license plates. ICBC told him that he needed to go to an Autoplan broker to cancel the insurance, and would need the plates to do so. When Shajahan reiterated the bank had his plates, ICBC told him to get them back from the bank.

The next day, on June 2, 2023, a broker received the plates after the car sold at auction.

“ICBC does not say when it found out a broker had his plates,” CRT Vice Chair Eric Regehr wrote. “I infer it knew right away because it did not explain how else it came to know the exact date the broker received the plates. This is also consistent with ICBC’s evidence that it was unable to cancel the insurance at that time because brokers require an insured’s signature to cancel.

“This suggests ICBC knew a broker had the plates.”

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Weeks later, on June 26, 2023, ICBC wrote Shajahan informing him it had closed his monthly payment plan, which made the entire annual insurance payment due immediately, the tribunal adjudicator found. “The amount at that time was $2,005.49. Given that, I infer the remaining $220.29 Mr. Shajahan eventually paid was interest.”

Shajahan testified he found out the broker had his plates just before the insurance expired in December 2023. “He does not say how he found out, and neither does ICBC,” Regehr wrote. “However, this is presumably what prompted him to phone ICBC on Dec. 7, 2023, to tell ICBC that he had attended a broker to cancel the insurance.”

The insurer said Shajahan did not in fact cancel the insurance at that time. The policy expired on Dec. 22, 2023.

The tribunal took ICBC to task for being aware on June 2 that the car’s licence plates were in the broker’s possession, but not telling Shajahan this.

“ICBC had told Mr. Shajahan to get in touch with his bank but within a day knew that effort would be pointless,” the adjudicator wrote. “It knew where the plates were, knew that Mr. Shajahan was paying for insurance on a car he no longer owned, and knew Mr. Shajahan’s ICBC debt was growing by the day. It also must have known that Mr. Shajahan was struggling to understand how to navigate the cancellation of his insurance.”

The tribunal ruled ICBC owed Shajahan $750 for the share of the insurance he owed by not cancelling the policy.

However, ICBC’s responsibility was only part of the story, the tribunal ruled.

“ICBC should have been more helpful, but Mr. Shajahan does not say why he was not more proactive,” Regehr wrote. “ICBC told him to find the plates, but it does not appear he even tried to do so.

“I accept that it may have been difficult or time-consuming to track down the plates, first through the bank, then the auctioneer, and then the broker. But it would not have been impossible.

“I also find that Mr. Shajahan should have been more diligent after his car was repossessed instead of simply stopping payment of his insurance. I therefore find that Mr. Shajahan bears considerable responsibility for his own loss.”