Auto insurance odometer readings: When ‘mileage’ doesn’t mean mileage

Clearing up a dispute over whether an auto policyholder meant “miles” or “kilometres” when asked for an odometer reading, B.C.’s Civil Resolution Tribunal ordered Insurance Corporation of B.C. to pay a customer $1,853.04 in damages for a vehicle lost in a fire.

Shane Ostere’s vehicle was destroyed by fire in July 2023. He and the province’s public auto insurer did not dispute that, before the fire, the vehicle’s odometer had stopped working.

However, “ICBC denied Mr. Ostere’s claim for coverage because it says Mr. Ostere deliberately misrepresented the vehicle’s estimated odometer reading on multiple occasions to increase the vehicle payout amount,” CRT member Megan Stewart wrote in a decision released Aug. 15.

In support of its contention, the public auto insurer submitted a copy of a 2020 Transfer/Tax Form showing that, at the time Ostere bought the vehicle, the odometer reading showed 228,327 kilometres. ICBC also entered into evidence a copy of the CL159 Report of Vehicle Ostere completed after the fire, in which he estimated an odometer reading of 140,000 km.

The tribunal focused on a transcript ICBC submitted in which the adjuster asked Ostere about the odometer reading. The exchange could be reasonably interpreted to show a misunderstanding, rather than a deliberate attempt to deceive the insurer, the tribunal found.

The transcript shows a call between an ICBC adjuster and Ostere on Aug. 16, 2023.

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“During the call, the adjuster asked Mr. Ostere whether they knew the vehicle’s ‘mileage,’” the tribunal decision reads. “Mr. Ostere replied it was “125 when I bought it, so I’m guessing 150 maybe,’ without specifying kilometres or miles.”

Ostere testified he answered the adjuster’s question truthfully, and the tribunal agreed there was room for misinterpretation in the exchange.

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“’Mileage’ can refer to miles or kilometres, but here the adjuster did not specify the unit of length when speaking to Mr. Ostere,” says the tribunal decision. So, I find it unproven that Mr. Ostere made a false representation during the phone call.”

Despite rejecting the public auto insurer’s contention that the claim should be denied because of misrepresentation, the tribunal agreed with the insurer on the value of the car’s worth.

Ostere said his vehicle was worth $8,500 before the fire, a claim ICBC denied. Ostere said he reduced his claim to $5,000 so it would fit within the CRT’s jurisdiction.

ICBC provided two estimates. The first, for $3,299.45, reflected the odometer reading Ostere claimed in the CL159 form he filled out after the fire. The second, for $1,853.04, reflected ICBC’s estimated reading at the time of the fire.

Ostere argued for the higher amount, while ICBC favoured the lower amount.

ICBC argued since there was a “coverage dispute” in play (i.e. because the tribunal rejected its claim denial), any dispute about valuation amounts had to go to arbitration.

The tribunal agreed, finding that Ostere had missed the timeline for filing an arbitration dispute.

Therefore, the tribunal ruled, there was no dispute over amount, and so it ordered ICBC to pay Ostere the lesser amount of $1,853.04.

David Gambrill

David has twice served as Canadian Underwriter’s senior editor, both from 2005 to 2012, and again from 2017 to the present.