The B.C. government is moving ahead with promised reforms to the Insurance Corporation of B.C., which has seen a huge increase in injury claim costs and a projected deficit of more than $1 billion a year.
Attorney General David Eby introduced the legislation Monday, to act on his promise in February to impose limits on the growing payouts from vehicle accident claims.
A second bill creates allows insurance disputes of under $50,000 to be dealt with by a civil resolution tribunal. The Attorney General’s ministry said in a statement the new structure would allow these disputes to be dealt with in as little as 90 days, compared to two to three years in B.C. Supreme Court.
RELATED: ICBC to cap pain and suffering awards
The cap of $5,500 for pain and suffering and other changes are to take effect April 1, 2019, and is expected to save ICBC up to $1 billion a year. The Crown corporation has seen a steep increase in costs for minor injury claims, with the average rising to $30,000 each. A third of that cost is legal fees, which ICBC has to pay for lawyers and expert reports even if claims are settled out of court.
ICBC has also seen a steep increase in the number of accident claims in recent years, and has tracked a 30 per cent increase in body shop costs as well. The corporation is running advertisements reminding people to check the alignment of their vehicle headrests to prevent whiplash-type injuries in a collision.
The rising costs have continued after a 6.4 per cent basic insurance rate increase was approved by the B.C. Utilities Commission in January. That translates to an average increase of $4.75 per month for basic personal insurance coverage, which took effect Nov. 1 on an interim basis.
The changes include a doubling of the maximum payout for serious injuries, from $150,000 to $300,000. It’s the first increase in 25 years in the amount to pay for nursing care, medical, dental, occupational and funeral costs.
“It is unacceptable, not just the British Columbians faced skyrocketing rates while ICBC lost hundreds of millions of dollars, but also that benefits for injured drivers, passengers, cyclists and pedestrians have been frozen in time for a quarter century,” Eby said.
“We are rebalancing where ICBC premium dollars go. We’re shifting the money out of administration, expert reports and court processes, and into drivers’ pockets through stable rates and better benefits.”
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