It seems that almost everyone knows ICBC is losing money, a lot of money.
What many people may not know is how our government is going to fix ICBC so that it delivers affordable car insurance, with good benefits, for all British Columbians. After all, that was the point of British Columbia establishing ICBC in the first place.
On April 23, 2018, our government introduced two significant bills in the legislature.
These bills are written in legal language. 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.
We will no longer permit endless growth in “pain and suffering” awards for minor injuries that have increased more than 260% in just the last 10 years.
The fundamental changes proposed by the two bills are simple — an independent tribunal will resolve minor injury disputes between claimants and ICBC, and a limit will be placed on the maximum pain and suffering award for minor injuries.
These simple changes translate into big savings of more than a billion dollars each year.
The billion dollars in savings comes even after including the cost of increasing benefits to cover the full cost of rehabilitation services like massage therapy, counselling, acupuncture, occupational therapy, physiotherapy and other treatments.
The savings also come after increasing benefits for lost pay, and doubling the lifetime entitlement to benefits for those catastrophically injured in an accident.
The most-recent time these accident benefits were increased was 25 years ago. Twenty-five years ago, a movie ticket cost about five dollars. Imagine what a physiotherapy session cost in 1993, and then try telling a physiotherapist that’s the maximum amount you’re able to pay in 2018.
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.
We’re learning from what they got right and what they got wrong. But we’re not stopping there.
We’re looking carefully at ICBC itself. A business audit by a third-party firm identified $57 million in possible annual savings inside ICBC.
We’re making roads safer and reducing costs by cracking down on distracted drivers with higher fines, and using red-light cameras more aggressively to discourage people from running red lights and speeding through intersections.
ICBC’s material damage cost reached $1.7 billion in 2017, and collision repair is the largest component. In 2017, ICBC paid more than $700 million to collision repair suppliers, up 50% since 2012. The situation is not sustainable. That’s why we’ve been looking at these costs carefully.
While drivers might imagine ICBC only uses their insurance premiums to pay for the actual cost of a part used in a repair or only pay for repairs that are required, that’s not the case.
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. We’re changing policy that requires our public insurer to pay to replace the “moulding” of a windshield every time — even if the moulding doesn’t actually require replacement.
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 alone.
As if to emphasize how ICBC ended up in so much trouble, the opposition party is voting in the legislative assembly against many of the changes needed to get ICBC back on track.
Thankfully, the majority of the elected representatives in the legislative assembly understand, and support, these long-overdue changes to a bloated and broken system.
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.