British Columbia’s attorney general has issued a statement reaffirming the government’s decision to reform the province’s failing auto insurer.
AG David Eby’s statement comes as citizens and lawyers voice their disapproval over the government’s plans to implement a $5,500 cap on minor injury claims.
Eby explained that the provincial government will fix the troubled Insurance Corporation of British Columbia (ICBC) through the two bills it introduced April 23, 2018.
“These bills are written in legal language,” Eby explained in an editorial piece published by Vancouver Sun. “In short, they say that our government will no longer tolerate having British Columbians’ car insurance premiums pay to administer costly and lengthy lawsuits with multiple experts in B.C. Supreme Court for minor injuries.”
On top of putting a limit on the maximum for pain and suffering awards, an independent tribunal that resolves minor injury disputes between claimants and the ICBC will be established under the two bills.
“We will no longer permit endless growth in ‘pain and suffering’ awards for minor injuries that have increased more than 260% in the last 10 years,” the attorney general promised, adding that the changes will translate into savings of over a billion dollars.
In his editorial piece, Eby also called out the lawyers who he believes have long abused the existing claims system.
“While these changes may be controversial for those who have benefited from the existing broken system, they’re not new. Every province in Canada has taken steps like this to get minor injury costs under control,” he said.
The attorney general also identified the issue of increasing repair costs hurting the ICBC.
According to Eby, ICBC’s material damage cost reached $1.7 billion in 2017 – collision repair makes up most of that cost. Also last year, ICBC paid over $700 million to collision repair suppliers – up 50% since 2012.
Eby noted that some drivers believe ICBC only uses their insurance premiums to pay for the actual cost of a part used in a repair or to only pay for repairs that are required – however, that is not always the case, he said.
“In more than half of windshield replacement claims, ICBC policy means ICBC pays more for a replacement windshield than the original manufacturer charged for the part,” Eby explained.
He added that the government has plans to change the specific policy that requires the ICBC to pay to replace the moulding of a windshield in each claim, even if the moulding does not need replacing.
“We’re about a decade behind in these changes, and it shows: ICBC is on track to lose an astounding $1.3 billion for the 2017-18 fiscal year,” he remarked.
“The reforms we make today will ensure ICBC is efficient and delivers affordable car insurance with good benefits for British Columbians for years to come.”
