Plaintiff Forfeits Right To Insurance Coverage For Lying About Principal Operator

In Lau v. ICBC, the Plaintiff was involved in a motor vehicle accident, in which his car was declared to be a write off. ICBC determined that the Plaintiff was at fault for the accident. Further, ICBC decided to breach the Plaintiff under his insurance policy, claiming he had made a willfully false statement as to who the principal operator of the vehicle would be. The Court agreed, and declared that the Plaintiff had forfeited his right to coverage under his policy.


[6] The reason I reach the conclusion I do with reluctance is that in my view, the misrepresentation was made in order to save a relatively modest amount of insurance premium, and almost certainly without any real appreciation that forfeiture of the insurance could result, with dire financial consequences. The result is harsh for the plaintiffs.


[7] However, ICBC does not have to prove that the plaintiffs were aware of the consequences of a misrepresentation concerning the insurance.  A contract of insurance is one of utmost good faith, and one cannot commit frauds or make wilfully false statements about the subject-matter of the claim without risking the loss of the right to indemnity: Inland Kenworth Ltd. v. Commonwealth Insurance Company (1990), 48 B.C.L.R. (2d) 305 (C.A.) at 310.


[8] Judging by the number of similar cases that have come before the courts, it seems likely the plaintiffs’ lack of understanding of the consequences of a false declaration as to the vehicle’s intended principal operator is shared with many members of the public. The result in this case should serve as a warning.

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