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.
To give British Columbians confidence that they will be treated fairly, 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. They will have recourse through:
- the Civil Resolution Tribunal, which is independent of ICBC;
- the B.C. ombudsperson; and
- the upcoming ICBC fairness officer, who will be appointed by government to ensure greater independence from ICBC.
As ICBC transitions to this new care-based model, government’s 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.
Highlights of Enhanced Care coverage:
Government will introduce legislation to create the new care-based system, which would take effect on May 1, 2021, so that British Columbians will benefit from:
- 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.
- Similar care-based insurance systems exist in Manitoba and Saskatchewan. Those systems have kept rate changes steady, near 0%.
- Under Enhanced Care coverage, a driver who is responsible for a crash will continue to be found at fault. This will remain a primary factor in what drivers pay for their insurance. If a driver causes a crash, their premiums will go up.
- Those injured by dangerous drivers convicted of certain Criminal Code offences, such as impaired driving, will still be able to sue for additional compensation.
- Government is taking action to limit the use of a disproportionate number of expert reports in litigation, through planned changes to the Evidence Act. Learn more here: https://news.gov.bc.ca/21538
- ICBC Enhanced Care coverage: http://icbc.com/2021
- 2020 basic insurance rates: https://www.icbc.com/insurance/costs/Documents/Basic-insurance-rates-2020-looking-ahead.pdf
- Government’s intended changes at ICBC: https://www2.gov.bc.ca/assets/download/000BAC79D98D4E14AAFCBBD582883BAD
- Technical briefing slide deck: http://news.gov.bc.ca/files/New-Model-Launch.pdf
- Ernst and Young Report: https://www2.gov.bc.ca/assets/download/75E7B57031214B74B878D9EFBC4990EE
- For a French translation: http://news.gov.bc.ca/files/New-Model-Launch_French.pdf
- For a Punjabi translation: http://news.gov.bc.ca/files/New-Model-Launch_Punjabi.pdf
- For a traditional Chinese translation: http://news.gov.bc.ca/files/New-Model-Launch_Chinese.pdf
More affordable auto insurance rates
Making rates more affordable and improving care will take expensive lawyer and legal fees out of the picture.
Historically, one in every four dollars that drivers spend on auto insurance has gone to lawyer and legal fees – one of the major reasons insurance rates in B.C. continue to increase.
With the work done over the last two years to improve the finances at ICBC, government has been able to hold the basic insurance rate change for 2020 at 0%. Without further changes, current projections show that rates would need to continue to rise by approximately 35% over the next five years.
By introducing Enhanced Care coverage, government is largely removing lawyer and legal fees to ensure rates are more affordable and that British Columbians injured in a crash can have peace of mind, knowing they will get the care they need.
All B.C. drivers will see savings
Under ICBC’s new Enhanced Care coverage, drivers will:
- save approximately 20% annually on their auto insurance. For the average driver that is savings of $400;
- have significantly enhanced care benefits, at least up to 24 times higher than today; and
- have more stable insurance rates in the future.
In 2020, ICBC’s average premium for basic and optional insurance is $1,900. With this change, the average premium will drop to approximately $1,500 in 2021 – a $400 saving. All drivers will benefit from more stable annual rate changes in years to come.
Like today, various factors will continue to affect each driver’s premium and will, therefore, determine the amount of savings they experience, including: driving experience and that of their listed drivers; crash history; driving convictions; where they live; and the type of vehicle they drive.
Impacts on inexperienced drivers
Inexperienced drivers – who pay some of the highest insurance rates today – will get some of the biggest help in actual dollar savings. With 20% savings on average, someone with a current premium of $3,500 will save $700 a year on average, while a customer whose premium is $1,500 will save $300 a year on average.
Rate increases in other provinces
As a comparison, the highest rate increases in Canada are happening in private auto-insurance markets, including Alberta, Ontario and New Brunswick. Ontario has the highest rates in the country with increases for nine-straight quarters. In Alberta, drivers are seeing increases in insurance rates of up to 30%. In Nova Scotia and New Brunswick, rates have been increasing by up to 50%.
Conversely, other care-based auto insurance systems – such as in Manitoba and Saskatchewan – have seen smaller rate increases than in B.C.
To learn more about the savings, visit: icbc.com/2021
Enhanced care and recovery benefits
Increasing care and recovery benefits help anyone injured in a crash get the care they need, for as long as they need it.
Maximum care and recovery benefits for those injured in crashes will increase to at least $7.5 million – 24 times higher than today – under Enhanced Care coverage.
Currently, the limit for care and recovery benefits is $300,000. Right now, any additional benefits beyond that – including to provide for future care for those catastrophically injured – can only be obtained if a person is not responsible for a crash and often through expensive and lengthy litigation. Settlements are then eaten up by legal fees, leaving people without the resources to pay for the care they may need for the rest of their lives.
Types of care and recovery benefits
The new care and recovery benefits will be available to anyone hurt in a crash, regardless of who was responsible for the crash, and will last for a lifetime, if needed.
The maximum in benefits of at least $7.5 million will include, but will not be limited to, paying for:
- treatments, such as massage therapy, chiropractic care and physiotherapy;
- prescriptions, dental care and counselling; and
- assistance with personal-care services, such as bathing, dressing and other household tasks – 24 hours a day, if required.
On top of the $7.5 million, government is also proposing other forms of coverage. This includes:
- increased wage-loss payments – a proposed maximum of $1,200 per week (up from $740 per week today)
- if a person is self-employed, a full-time student or family caregiver, they will also have access to new benefits to cover income, time lost from studies or increased expenses.
- new benefits for the catastrophically injured – permanent impairment compensation (proposed maximum of $250,000); and additional personal care assistance (proposed maximum of $10,000 per month); and recreational benefits.
While the maximum in benefits of at least $7.5 million will be set out in legislation, government and ICBC will consult with the medical and disability advocacy community on details around additional benefit levels to ensure they will meet patient needs.
To learn more about the full range of care and recovery benefits, visit: icbc.com/2021
For a comparison of accident benefits, visit: http://news.gov.bc.ca/files/New-Model-Launch_BKDR-Graph.pdf
Ensuring fair treatment from ICBC
To give British Columbians confidence that they will be treated fairly, ICBC will be required, by law, to assist every person who makes a claim and to help ensure those injured receive all the benefits to which they are entitled. The Civil Resolution Tribunal, which is independent of ICBC, will have an expanded ability to resolve motor vehicle disputes and the new fairness office will have greater authority to address complaints and make recommendations to ICBC to improve processes and fairness.
Care and benefit levels in other provinces
The new care and recovery benefits amount is substantially higher than the vast majority of private auto insurance jurisdictions in Canada, and in line with benefits offered by other care-based public auto insurers like Manitoba and Saskatchewan. Private insurance companies in Alberta, New Brunswick and Nova Scotia provide $50,000 in basic care coverage, not enough for someone who is seriously injured in a crash.