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UNINSURED DRIVERS: Life After Debt?

Driving without insurance in Alberta DOES NOT PAY. If you are caught driving without insurance, the minimum fine is approximately $2,500. (That's if you don't get into an accident...)

In Alberta, the Motor Vehicle Accident Claims (MVAC) Program protects victims of accidents involving uninsured drivers. This Program ensures that injured parties can obtain relief for up to $200,000 for personal injuries. There are also medical benefits of up to $95,000 available for hospital care, ambulances, medical care, rehabilitative care and certain appliances. MVAC does not cover property damage, an amount exceeding $200,000 for a personal injury or any injury that is already provided for under another income or insurance plan (eg. EI, AISH, WCB, etc.). Any benefits provided for under your insurance plan or that of the uninsured driver must also be used before accessing MVAC.

When an uninsured driver is involved in an accident, there are two options: he or she can try to negotiate a private settlement or he or she can contact MVAC. Once MVAC is involved in the process, they require the full cooperation of the uninsured party. They will also defend any claim advanced or use their discretion to settle the matter.

If you are the injured party, MVAC will pay you the amount negotiated in settlement or awarded by the courts up to the limit of $200,000. MVAC will then collect the money back from the uninsured driver as if the debt was an involuntary loan. This means that collection remedies such as seizure of assets, garnishees and suspension of federal and provincial licenses can be used against the uninsured driver in order to recover the amount of the Judgment. Furthermore, filing bankruptcy will not make the MVAC Judgment disappear. This makes it essential for uninsured drivers to make reasonable payment arrangements and retire the debt in an orderly fashion.

If you are the victim of an accident involving an uninsured party, it is important to remember that you have two years from the date of the accident to sue anyone who may be liable for your accident. If your accident involved a hit-and-run driver who cannot be identified, you must give MVAC notice within 90 days of the accident. You must then sue the administrator of the Motor Vehicle Claims Act within two years from the date of the accident if you are unable to locate the owner/operator of the vehicle.

By Lani Rouillard
May 3, 2006