By Gideon Scanlon
Toronto, Ontario -- April 5, 2018 -- A year-and-a-half after the province's Attorney General David Eby described the Insurance Company of British Columbia's finances as a "dumpster fire," the province has put in place a cap on minor injury pain and suffering penalties.
The goal is to prevent legal fees from building up around minor cases, and, while unpopular with many trial lawyers--some of whom are suing the government--it should be warmly received by repairers.
After losing $3 billion over the course of 2017 and 2018, ICBC believes the new policy will be able to begin crawling out debt, saving about $1 billion each year.
Why? Because the provincial government is no longer seeking to blame collision repairers for inflating their rates. After a year-and-a-half of taking serious steps to save money, that is a pretty good sign that the province has accepted rates as being realistic.
In November 2017, however, the province was quite happy to lay the blame on the province's collision community. When a former estimator had come forward with concerns that the ICBC was being defrauded hundreds-of-millions of dollars by repair facilities, Eby--a minister of the governing NDP's cabinet--had announced he would be looking into the clams. While the claims were quickly debunked by both ICBC executives and the BC ARA, the province did announce they would be hiring an additional 60 estimators to investigate facilities in the north of the province.
It would not be until last Spring, some six months after the financial crisis became public knowledge, that the governing NDP drafted the legislation to put a cap on minor injury claims.
Whether the Crown corporation will really be able to pull itself from debt remains to be seen. Even if it does pull its finances from the proverbial dumpster, it will still face other problems. For one thing, while the collision repair community may have cause to celebrate the new policy, drivers are unlikely to be quite as thrilled. Not only do they pay the highest premium rates in Canada, but the ICBC raised their rates by 6.3 percent on April 1st.
Whether or not the scheme will be enough to save the ICBC and prevent British Columbians from turning towards a private system, it is significant that legal costs--not repairs-- have been identified as the area where insurance companies can save money. One can only hope that other auto insurers are paying close attention.