Brokers needn’t advise new Canadians to obtain a provincial driver’s licence

Insurance brokers in B.C. aren’t required to advise clients new to Canada that they must apply for a provincial driver’s licence within 90 days of residency in the province, B.C.’s Civil Rules Tribunal has ruled.

“I find that the duty of care for ICBC [Insurance Corporation of B.C., the province’s public insurer] and its insurance agents does not extend to ensuring the customer has the proper driver’s licence to be covered under the insurance policy they are purchasing,” CRT Tribunal Member Kristin Gardner wrote in a Feb. 12 decision. “I find that obligation rests with the customer.

“While ICBC’s insurance policy says that ICBC will not cover an insured if they are not authorized and qualified to drive in B.C., the contract does not require the insured to have a B.C. licence. Rather, it is a separate legal requirement under the [Motor Vehicle Act] for new B.C. residents to get a B.C. licence within 90 days.

“I find that ICBC and its insurance agents are not obligated to advise customers about such legal requirements.”

In Zhou v. ICBC, Wenliang Zhou moved to B.C. in January 2021 to accompany her son while he attended school, per the CRT’s decision. “I infer that Ms. Zhou did not intend to remain in B.C. permanently, but the evidence suggests she planned to live in B.C. for at least several years,” Gardner wrote.

Zhou bought a vehicle in June 2021 and bought ICBC insurance for it every three months from the same insurance broker. In May 2022, “Ms. Zhou was in an accident, which was undisputedly her fault,” CRT’s ruling found. She had valid auto insurance from Apr. 3, 2022, to July 2, 2022.

After the collision, in a June 2022 email, ICBC thanked Zhou for providing a copy of her foreign driver’s licence and asked her to provide a translated copy. It also requested further information about Zhou’s residency to confirm coverage.

“Ms. Zhou responded that she had been in B.C. for 1.5 years, was not attending school or working, and did not have a translated copy of her foreign driver’s licence,” the tribunal’s decision reads.

Related: 3 lessons about brokers’ obligations to insureds

ICBC decided Zhou was not covered for the collision because she did not have a valid B.C. licence. Under B.C. law, visitors to the province can use their valid foreign licence for up to six months before they get a B.C. licence. But they must get a B.C. licence within 90 days of becoming a B.C. resident.

In a letter to Zhou, the public insurer suggested it would pay the claim if Zhou obtained the required B.C. licence on her first attempt and provided a copy of that licence within 10 business days of the letter’s date. Otherwise, ICBC would not pay the claim.

Zhou later passed her “L” learner’s licence test. But she still didn’t qualify for coverage, because she did not have a licensed, supervising driver in the vehicle with her at the time of the accident, which breached the conditions of an “L” licence, ICBC determined.

Zhou sued the public insurer to recover her premium money. “She says that she paid a more expensive rate for insurance because she had a foreign licence, and that ICBC committed fraud by accepting her money and then refusing coverage,” the CRT decision reads.

The CRT rejected Zhou’s claim, saying ICBC was not obligated to advise her about the legal requirement to obtain a B.C. licence. In any event, the public insurer did have that legal requirement posted on its website, the tribunal decision observes.

As for Zhou’s contention that her insurance broker should have advised her of this requirement, the tribunal noted she did not bring an action against the brokerage. Nor did the brokerage owe her any such duty of care.

“I find that owning a vehicle and renewing an insurance policy does not necessarily indicate that someone is a B.C. resident or needs a B.C. licence,” Gardner wrote. “It would not necessarily have been obvious to the broker that Ms. Zhou was not properly licensed.

“I find the broker did not have a duty to make further inquiries about Ms. Zhou’s residency status, and there is no evidence before me that Ms. Zhou raised her residency status with the broker.”

Feature image courtesy of iStock.com/Jacob Wackerhausen