Not long ago, one of our clients found themselves in a tricky situation. Their car was involved in an accident, and unfortunately, it was likely a total loss. As they awaited ICBC’s determination of fault (a process complicated by the circumstances of the accident) they found themselves needing a new vehicle to get to work. The big question was: Can I purchase and insure a new vehicle while my previous accident liability is still being reviewed? And how would this affect my insurance premiums?
This client’s concern is not uncommon. Many drivers find themselves in a similar position when their vehicle is damaged in an accident, especially when vehicle damage leads to uncertainty and delays. For example, someone in this situation may feel overwhelmed by the number of decisions they must make. If you’re in a similar situation, here’s what you need to know about insuring a new vehicle during a pending accident claim, and how factors like traffic tickets and penalty points could impact your insurance premiums.
Can You Insure a New Vehicle While Your Previous Accident Liability Is Still Being Reviewed by the Insurance Company?
The good news is that, yes, you can purchase and insure a new vehicle while your previous accident liability is still under review by ICBC, your provincial insurance company. Even during this period, the insurer will allow you to move forward, and you’ll still be able to pay for the coverage you need without interruption. If needed, ICBC brokers can help clarify your options.
While it’s understandable that you might feel uncertain during this time, especially with your previous car being totaled and the liability still under review, ICBC’s insurance policy guidelines allow for you to move forward with the purchase. Your new vehicle can be insured, and the review of your prior accident will not prevent you from securing insurance for your new vehicle. If you choose, you can even begin some parts of the process online for added convenience.
According to ICBC, as long as your claim is still being processed and liability has not yet been determined, your premium will not be adjusted to reflect the outcome of that claim. This means that, for now, you won’t see any increases to your basic insurance premium just because the claim is still unresolved. You’ll simply pay the standard rate based on your existing record. This offers important benefits for anyone needing a replacement vehicle quickly.
This is a relief for many drivers, especially those who rely on their vehicles for daily commuting or work, and need a replacement quickly. It also means that you don’t have to wait for the final decision on liability before getting the vehicle you need to move forward.
How Does the Accident Claim Affect My Premium Under My Insurance Policy?
While the claim is still under review, your premium for the new vehicle will not be impacted immediately. However, it’s important to know that once the claim is resolved, your premium may be affected depending on the outcome. The insurer will adjust your rate based on the final determination, which may change how much you’ll need to pay going forward. This can happen regardless of whether you’re self-employed or operate a small business, as ICBC primarily evaluates your driving record.
If the claim results in you being found at fault, ICBC will likely adjust your premium, reflecting the increased likelihood of future risk of insuring a driver deemed responsible for an accident. Generally, drivers found at fault for accidents tend to see a premium increase, especially if the claim is large or involves extensive vehicle damage to other vehicles or property. In some situations, you may also need to pay a deductible depending on the coverage used.
On the flip side, if you are found not at fault, your insurance premium may remain unchanged (assuming no other issues on your record). In this case, the insurer or insurance company will likely view you as a lower-risk driver and will not increase your premium. This means you’ll continue to pay the same amount unless alternate factors apply. As an insured driver, this stability can be reassuring.
While you are waiting for the resolution, there’s no immediate effect on the cost of insuring your new vehicle. But once the investigation concludes, it’s important to stay aware of how the result might affect your rates and whether your insurance policy needs adjustments. If fault is assigned and a payout is made, you may need to pay a deductible or see an adjustment in how much you’ll pay for future premiums. Make sure your account information with ICBC stays up to date so you don’t miss important notices.
What Other Factors Like Traffic Tickets and Penalty Points Mean for Your Insurance Premium
Another consideration that could impact your premium is the potential for traffic tickets and penalty points on your driving record.
If you’ve accumulated penalty points due to a traffic violation, ICBC may impose an additional premium, known as the Driver Penalty Point (DPP) or Driver Risk Premium (DRP). These premiums are separate from your standard vehicle insurance but can significantly affect your overall costs. Your insurance company assesses these risks independently of your main insurance policy according to the rules that apply to all drivers, which can create additional financial pressure depending on your record. In some cases, you may need to pay both your regular premium and an added penalty premium.
Here’s how the penalty points system works:
- Penalty points are assigned based on the severity of driving offenses (such as speeding, running red lights, or failing to signal).
- If you accumulate four or more penalty points within a 12-month period, you could face an additional premium. The more serious the violation, the more points you’ll accumulate, which could lead to an even higher insurance premium. This would increase the amount you must pay annually.
However, if you’re disputing a ticket, it will not immediately affect your premium until the dispute is resolved. Once a ticket is upheld and points are added to your driving record, you could see an increase in your insurance costs, particularly if you accumulate multiple points over time. In these situations, good support from an advisor or broker can help you understand your options.
Key Considerations When Insuring a New Car Amidst an Ongoing Accident Claim
While you can certainly move ahead with purchasing and insuring a new vehicle during an ongoing accident claim, there are a few things to keep in mind to ensure you are fully prepared for the impact on your premiums.
- Understand Timing: Since the claim is under review, it may take some time for ICBC to determine fault. During this time, you may want to be mindful of any traffic violations or tickets you receive, as they could impact your premium once the claim is resolved.
- Review Your Coverage: When buying a new vehicle, it’s crucial to review the type of coverage you need. Whether it’s just basic Autoplan coverage or additional protections like Collision, Comprehensive, or Extended Third-Party Liability, each option will influence your premium and overall insurance costs.
- Stay Cautious on the Road: If you have accumulated penalty points, be extra cautious while driving to avoid further violations. Even minor offenses could raise your premium, so it’s best to stay on top of your driving habits during this time.
- Prepare for Financial Impact: If the outcome of your previous accident results in a premium increase, it’s important to prepare for this potential cost increase. Depending on the severity of the claim and your driving record, your premium could rise once fault is determined.
Final Thoughts
If you find yourself needing a new vehicle while your previous accident claim is still unresolved, rest assured that you can proceed with purchasing and insuring your new vehicle. The key is to stay informed about how the resolution of your claim, along with any traffic tickets or accumulated points, may impact your insurance premiums in the future.
By staying proactive, keeping track of your driving record, and ensuring you have the right insurance coverage for your needs, you can make the transition to your new vehicle as smooth as possible. If you have any questions about your specific situation or need help finding the right coverage for your new vehicle, don’t hesitate to contact King Insurance today. As a policyholder, understanding your rights and responsibilities can make a big difference in how confident you feel on your next steps.
About King Insurance
Located at the northwest corner of Marine Drive and Main Street, King Insurance proudly serves not only the South Vancouver communities of Marpole, Sunset, Oakridge, Victoria–Fraserview, and nearby areas like Marine Gateway and Marine Landing, but also clients across Richmond and the entire Lower Mainland.
Ka Hing Cheung is proud to work in the insurance company industry, helping customers and businesses in the province manage risk and protect what matters most. Ka Hing is committed to ongoing learning and enjoys helping clients find the right insurance coverage at the best available rate, while making sure they understand their options clearly.