Automotive

Question - ICBC total loss and sales tax on settlement

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  • Jun 21st, 2016 9:06 pm
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[OP]
Newbie
Nov 3, 2010
13 posts
4 upvotes
Burnaby

Question - ICBC total loss and sales tax on settlement

Hello,

i was recently in an accident where my car was declared a total loss. The other driver has already been found 100% at fault.

I am hoping someone can provide insight into sales tax in total loss settlements. The total loss representative is telling me ICBC only covers the cash value of my vehicle before sales tax. That is ridiculous as it means I'm losing 12% of the cost it takes to replace with an identical vehicle.

I've always understood that ICBC covers sales tax in total loss payments and I can find Google results with articles stating ICBC will cover sales tax. However I cannot find an official ICBC statement nor a BC law around sales tax in a total loss payment.

Any advice or information would be very much appreciated. This is potentially thousands of dollars in insurance on my vehicle's value and I don't see how ICBC can choose not to pay it.
9 replies
Sr. Member
Mar 4, 2013
571 posts
373 upvotes
Never heard of icbc covering taxes. Could it be 3rd party?

Good luck.
Deal Expert
User avatar
Feb 9, 2003
18568 posts
2932 upvotes
Langley
ICBC covers replacement cost. This includes the tax cost. But it's not expicit. If they give you 10k, they think that the replacment car will cost 9k and the tax will be about 1k. They won't give you a check that says 9k to cover the car and 12% to cover the tax, it will just be a cheque for 10k.
Deal Fanatic
Oct 26, 2008
6392 posts
2040 upvotes
BC
Gajic wrote: .... I cannot find an official ICBC statement nor a BC law around sales tax in a total loss payment.

....
Yes, good luck finding anything in writing about the inner workings of ICBC.

But contrary to what I6S1 says (unless that really is personal experience) I don't think ICBC figure tax implicitly in their settlement offer.

The lawyer's link below is not up-to-date as it references our short-lived HST escapade but I would imagine it still applies with GST + PST.
ICBC and/or the Liberal Govt. is beholden to auto dealers lobbying and by providing a separate 'voucher' for sales tax that you can only get processed by a licensed dealer their objective is accomplished.
- if you get your replacement vehicle through a private party you pay the tax yourself and waste the value of the 'voucher'
- if you get the replacement vehicle through a dealer you can use the 'voucher'
- if you decide not to get a replacement vehicle and take public transit, or buy a bicycle, or emigrate, etc., then ICBC feels they have paid you right amount with no sales tax included

http://www.mussiogoodman.com/icbc-claim ... s-vehicle/
[OP]
Newbie
Nov 3, 2010
13 posts
4 upvotes
Burnaby
Thanks for the replies. I will update this thread once the tax issue is settled with ICBC so future visitors to this thread have an answer.
Deal Fanatic
User avatar
Apr 1, 2001
5565 posts
619 upvotes
I have seen them word their offer amount in the following way "$xxxxx plus $yyyy tax = total of $zzzzz."
[OP]
Newbie
Nov 3, 2010
13 posts
4 upvotes
Burnaby
I heard back from my adjuster. The 12% GST/PST is included in the payout. They find the cash value of the vehicle and add 12% to that value. That old tax voucher system has not returned.

Fortunately after doing my homework and providing evidence I received a fair total loss offer. It is definitely worth doing your homework and ensuring you receive a fair payout.
Newbie
Nov 12, 2005
56 posts
6 upvotes
Thanks for responding with a final post. Helps wrap everything up otherwise we're left wondering. As Mofesto said, their first offer is usually subject to a bit of negotiation if you have reasonable cause to expect/claim more.

Glad to hear that you got a fair offer.

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