The first major change, set to take effect in April 2019, is a $5,500 cap on pain and suffering payouts for minor injury claims. The average payout for those claims was $16,499 last year, which is 265 per cent higher than the average pain and suffering payouts awarded back in 2001.
VICTORIA – The B.C. NDP government has shut the taps of cash flowing out of ICBC by announcing a number of measures, the biggest being putting caps on payout on soft tissue injuries, to the province’s public insurer ICBC that it estimates will reduce claims costs by more than $1 billion annually.
This is an attempt by the NDP government to fix BC Liberals’ billion dollars in the hole mess.
The changes were revealed earlier this week amid troubling predictions that the Insurance Corporation of B.C. is facing $1.3 billion in losses by the end of this fiscal year.
Attorney General David Eby said without action, drivers in the province could face premium hikes of $400 or more.
“So we are acting,” Eby said. “The reforms I’m announcing today are intended to make ICBC financially sustainable.”
The first major change, set to take effect in April 2019, is a $5,500 cap on pain and suffering payouts for minor injury claims. The average payout for those claims was $16,499 last year, which is 265 per cent higher than the average pain and suffering payouts awarded back in 2001.
“ICBC was created to provide affordable insurance to all B.C. drivers, but years of reckless decisions by the previous government have thrown the corporation into financial chaos,” Eby said. “Today we start making the tough decisions that will stem ICBC’s losses, keep insurance affordable and provide enhanced care for people injured in automobile accidents. We’re going to make ICBC work for people again.
“For too long, difficult decisions have been put off and growing financial problems at ICBC hidden from the public. The changes we’re initiating today will reduce ICBC’s claims costs by more than $1 billion every year, helping make it sustainable for decades to come,” Eby said.
Taking effect April 1, 2019, the changes include:
* A new limit of $5,500 on pain and suffering for minor injury claims. The cost of those claims has increased 265% since 2000. British Columbia is the last province in Canada to take this kind of action.
* The first major improvements in accident benefits in 25 years, dramatically increasing the care available for anyone injured in a crash, regardless of fault. The overall medical care and recovery cost allowance will be doubled to $300,000. This change will be made retroactive to Jan. 1, 2018, so it will effectively be in place to protect injured drivers and passengers immediately. See more on this benefit below.
* An independent dispute resolution process for certain motor vehicle injury claims.
Together, these changes will reduce the amount ICBC spends on legal fees and expenses, which have grown to consume 24% of ICBC’s budget. The savings from this change, when coupled with other planned initiatives, will restore ICBC to financial sustainability and finance the planned accident benefit improvements.
Disputes over certain motor vehicle injury claims, including the classification of an injury, will be adjudicated by B.C.’s Civil Resolution Tribunal, an independent body that already adjudicates strata and small claims disputes in the province.
“We’re putting ICBC’s priority back where it should be – providing fair, affordable rates for British Columbians, and giving drivers peace of mind with appropriate care if they are in a collision,” Eby said.
Eby also announced that ICBC will be consulting with customers on major revisions to the corporation’s rate structure with the goal of ensuring good drivers pay less, and bad drivers pay more. The consultation will ensure rate structure changes are responsive to the interests of British Columbians and done with full transparency.
“British Columbians can no longer afford to keep paying more and more for their auto insurance every year, and this is the decisive and immediate action which is needed to relieve the pressure on ICBC’s rates,” said Joy MacPhail, chair, ICBC board of directors. “These changes make the injured customer our top priority, by redirecting payments away from legal costs into significantly enhancing the care and treatments for anyone who is injured in a crash.”
Accident benefit details:
* Doubling the lifetime allowance for medical care and recovery costs for those catastrophically injured in a car accident from $150,000 to $300,000. Legislation will be introduced with the intention of making this benefit retroactive to Jan. 1, 2018, in order to start immediately helping seriously injured British Columbians.
* Covering a greater variety of treatment services.
* Significantly increasing the amount covered for treatments, so customers don’t have to pay out-of-pocket.
* More than doubling wage loss payments to $740 per week, almost doubling home support benefits to $280 per week, tripling funeral cost coverage to $7,500, and increasing death benefits to $30,000.
Quick Facts:
* Injury claims totalled $2.7 billion in 2016, an increase of 80% in the last seven years.
* The average claim paid out for minor injuries has risen from $8,200 in the year 2000 to $30,038 in 2016, an increase of 265%.
* At the same time, the average pain and suffering awards paid out for minor injuries have risen from $5,004 in 2000 to more than $16,499 in 2016.
* Vehicle damage claims costs have increased 30% in just two years, to a total of $1.5 billion in 2016 alone.
* Use of the CRT for minor injury dispute resolution means claimants who don’t use a lawyer will get to keep their entire settlement, rather than paying a portion of it to lawyer fees.
* The use of the CRT for these disputes will also reduce ICBC’s legal costs, which account for 24% of the corporation’s total annual costs. These costs are greater than the cost of running ICBC.
