BC NDP government says changes to ICBC will reduce claims costs by $1B annually

Attorney General David Eby announces changes to ICBC on Feb. 6, 2018.

The B.C. NDP government has announced that minor injury claims will be capped at $5,500 starting on April 1, 2019.

The new limit is part of a number of changes to the province’s public insurer that it estimates will reduce claims costs by more than $1 billion per year.

The changes come after the insurer was forecast to lose $1.3 billion by the end of the fiscal year. The insurance corporation has posted a net loss of $935 million in the first nine months of its fiscal year.

Eby said years of mismanagement by the previous Liberal government have undermined British Columbia’s ability to provide low-cost insurance to drivers in the province.

“It’s unacceptable that we find ourselves in this situation today,” Eby said.

“We now know that the former government had received clear recommendations in 2014 from independent auditors that could have saved the corporation hundreds of millions of dollars and prevented this crisis. They did not act. They rejected the recommendations and in fact, removed relevant pages from a report before releasing it to the public.”

Eby said if the NDP government doesn’t act to fix ICBC, B.C. drivers could see increases of at least $400 in their premiums.

“So we are acting,” Eby said. “The reforms I’m announcing today are intended to make ICBC financially sustainable.”

As of April 1, 2019, the $5,500 limit will be applied to pain and suffering payouts for minor injuries. Any compensation provided by accident benefits, such as benefits for medical treatments, wage loss and home care support, is completely separate from pain and suffering.

The average payout for minor injury pain and suffering awards last year was $16,499 in 2016, compared to $5,004 in 2000. The government said the cost of minor injury claims was $30,038 in 2016, up 265 per cent from $8,200 in 2000. All injury claims in the province came in at a total of $2.7 billion in 2016, an increase of 80 per cent in the clast seven years. Vehicle damage claim costs have increased 30 per cent in two years to $1.5 billion in 2016.

Eby said ICBC will develop a clear, legal definition of what constitutes a minor injury in British Columbia. The new legal definition will include things like sprains, strains, mild whiplash, cuts and bruises, anxiety and stress from a crash. It does not include broken bones, brain injuries (concussions) or other more serious impairments.

A medical professional – not ICBC – will determine the nature of an injury and this will determine whether it falls under the definition of a minor injury. An injury initially diagnosed as minor may also be determined by a medical professional to become non-minor over time.

If, after 12 months, a customer continues to have serious impairment from the injury, or has a significant inability to care for themselves, it would no longer be considered minor and would not be subject to the limit for pain and suffering payouts.

Another change announced by the government is the overall medical care and recovery expenses will be doubled from $150,000 to $300,000. Legislation will be introduced to make this retroactive to Jan. 1, 2018, so will be effective immediately. The costs include medical, surgical, dental, nursing or physical therapy services, as well as costs for chiropractic treatment, occupational therapy or speech therapy.

The amount covered by ICBC will also be increased so customers don’t have to pay out of pocket for most expenses. ICBC will pay for treatments based on fair market rates. More types of service providers will be covered by ICBC so that customers have more choice about the treatments they are able to receive. Kinesiology, acupuncture, counselling and massage therapy visits will be added to the list of pre-approved services that already include doctor visits, physiotherapy, occupational therapy and chiropractic treatment.

Wage loss payments will go from $300 per week to $700 per week and home support benefits will be $280 per week instead of $145 per week. Funeral cost coverage will be $7,500 instead of $2,500 and death benefits will be $30,000. The previous rate ranged from $17,580 to $20,080.

Other accident benefits will be reviewed on an ongoing basis.

There will also be an independent dispute resolution process for certain motor vehicle injury claims. Disputes over certain motor vehicle injury claims will be adjudicated by B.C.’s Civil Resolution Tribunal, an independent body that already adjudicates strata and small claims disputes in the province. The government said using the tribunal for minor injury dispute resolution means claimants who don’t use a lawyer will be able to keep their entire settlement, instead of a portion going to lawyer fees.

The tribunal works to resolve claims in 60 to 90 days.

ICBC will be consulting with customers on major revisions to the corporation’s rate structure. The government said the goal is to ensure good drivers pay less and bad drivers pay more.

The government expects all the changes will reduce the amount ICBC spends on legal fees and expenses, which now take up 24 per cent of ICBC’s budget.

With files from The Canadian Press

Editorial Policies Report an Error