Capping minor injury awards and raising deductible amounts will be part of an overhaul of the Insurance Corporation of B.C. this spring to get its runaway costs under control, Attorney General David Eby says.
Rising costs of accidents and a “massive increase” in the awards for minor injuries are unsustainable, and measures will be unveiled in the spring legislature session to deal with the deficit, Eby said Monday. Without an overhaul, it would require a $400 premium hike for each B.C. driver just to get ICBC to break even, he said.
While he continued to reject a switch to “no-fault” insurance that would prevent all claimants from suing ICBC for a settlement, Eby said the costs of injury awards are not sustainable, and auto body shop costs have also risen 30 per cent in the last two years.
“These initiatives will be difficult for groups with an interest in the status quo,” Eby said.
ICBC basic insurance rates went up 6.4 per cent in November, which works out to an increase of $4.75 per month for the average B.C. driver.
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Eby released a consultant’s report after the NDP government took office in July, projecting ICBC rates could rise 30 per cent by 2019 if changes aren’t made. At the time, Eby rejected the idea of no-fault insurance that would cap the awards available for soft tissue and other minor injuries.
B.C. Liberal leadership candidates and the new NDP government have traded blame for the soaring increase in claim costs, which has been a cause of alarm for ICBC executives since 2013.
Eby called the situation “a dumpster fire” and blamed the B.C. Liberal government for removing recommendations for change from a 2014 independent review. Those proposed changes included caps on minor injury awards.
Barry Penner, the former B.C. Liberal cabinet minister who was replaced by former NDP minister Joy MacPhail as ICBC board chair after the change of government, said the tactics of personal injury lawyers to maximize injury claims are among the big drivers of cost.
ICBC is also dealing with a big jump in accidents. After a steady rate for several years, crashes went up 23 per cent in two years, 2015 and 2016. The previous government increased penalties for distracted driving, and Eby said more measures are on the way to get people to put away their smartphones while driving.