The B.C. Government is making changes to help ensure ICBC is more transparent and accountable to its customers. The purpose is to give British Columbians greater confidence that the corporation is treating them fairly when challenges arise, while better supporting people injured in crashes.
The government will be taking steps to appoint a new fairness office focused on customer fairness that is more independent from ICBC. The office will be required to report out publicly, in plain language, on the type and number of issues it hears, along with recommendations to ICBC. ICBC will also be required to report publicly on actions it takes to respond to these recommendations.
This office will review and make recommendations to ICBC to resolve individual customer complaints, as well as policy and process, related to customer fairness. The new fairness office will be formalized in legislation in fall 2020 and in place by spring 2021.
Another change that will be made by government to build trust and better support people who have been injured in a motor vehicle accident is pre-litigation payments. For those who are injured and qualify, ICBC will be offering pre-litigation payments up front without the need to waive the ability to sue if they so choose. Previously, if a person decided to take ICBCs settlement, they had to agree to not seek additional settlement money through the courts.
The intent of this program is to help injured customers receive full and fair compensation as quickly as possible. It will also help those injured keep more of their settlement, instead of paying it to lawyer and legal fees, which can total as much as 33% of the total settlement and can require a lengthy court process.
As of Feb. 6, the B.C. government is transforming ICBC by removing lawyers and legal costs from the system to reduce rates and substantially increase care benefits, making public auto insurance work for British Columbians again.
Legislation will be introduced in the coming weeks that will lower ICBC premiums by approximately 20% an average of $400 in savings per driver. At the same time, maximum care and treatment benefits for anyone injured in a crash will increase to at least $7.5 million, and new benefits will provide care for those most seriously injured, for as long as they need it. These benefits will be available to every British Columbian without having to hire a lawyer.
These improvements will be achieved by removing the majority of legal fees and other costs associated with the current litigation-based system. The new care-based insurance system is forecast to remove more than $1.5 billion in the first full year, savings that will be passed on to ICBC customers through lowered insurance rates.
The planned legislation will require ICBC, by law, to assist every person who makes a claim and endeavour to ensure they receive all of the care and benefits to which they are entitled. Customers who still have complaints or disputes about their claim, benefit payments or fairness issues will not need a lawyer to have them resolved.
As ICBC transitions to this new care-based model, governments previous work to improve the finances at ICBC means there will be no basic rate change this year. The 0% basic rate change that takes effect on April 1, 2020, is the lowest any government has delivered in almost a decade. Without significant changes, rates would need to continue to rise by about 35% over the next five years.
The new care-based system, which takes effect on May 1, 2021, ensures:
- Average savings of $400 on their premium, compared with the previous full-year policy;
- Care and treatment benefits that are 24 times higher than today, up to at least $7.5 million;
- Wage loss coverage that is 60% higher than today; and new benefits such as benefits for full-time students, caregivers, those working in the family business or those approaching retirement, who suffer income loss following a crash replacing lump-sum payments that were previously awarded only through lengthy and expensive litigation.