In the wake of announcing ICBC’s financial crisis, the B.C. government is directing the insurance corporation to limit minor injury claims.
Announced on Tuesday, the new limit of $5,500 is one response to ICBC’s projected net loss of $1.3 billion in 2017-2018. Other upcoming changes include improvements to accident benefits including doubling the overall medical care and recovery cost allowance to $300,000 and an independent dispute resolution process for some motor vehicle injury claims. All changes will come into effect on April 1, 2019.
These steps will “reduce ICBC’s claims costs by more than $1 billion every year,” said Attorney General David Eby when he made the announcement.
“ICBC was created to provide affordable insurance to all B.C. drivers, but years of reckless decisions by the previous government have thrown the corporation into financial chaos,” Eby said.
Eby also said these changes will reduce ICBC’s spending on legal fees and expenses, which currently make up 24 per cent of the corporation’s budget.
Moving forward, ICBC will consult with customers on major revisions to the corporation’s rate structure to ensure that good drivers pay less, while bad drivers pay more.
“British Columbians can no longer afford to keep paying more and more for their auto insurance every year, and this is the decisive and immediate action which is needed to relieve the pressure on ICBC’s rates,” said Joy MacPhail, chair of the ICBC board of directors in a press release. “These changes make the injured customer our top priority, by redirecting payments away from legal costs into significantly enhancing the care and treatments for anyone who is injured in a crash.”
