The British Columbia government has announced the largest reform to auto insurance since the creation of the Insurance Corp. of B.C. more than four decades ago. Next year, B.C motorists will see a 20 per cent cut to their premiums next year, under a no-fault system. The announcement is a move by the government to stop continuing financial losses at ICBC.
No-fault insurance means people involved in vehicle crashes can no longer sue for damages — except in cases involving court convictions for offences like negligence, street racing, impaired driving, or in cases of faulty manufacturing, botched repairs and the over-service of alcohol by a business.
Under the new system, people will receive benefits, payments for medical treatment and compensation directly from ICBC, using amounts set by the province depending on the type of injury.
The switch will upend B.C.’s litigation-based insurance model, in the process saving ICBC an estimated $2.9 billion in legal fees, pain and suffering and injury claims in 2022. Roughly $1.2 billion of that will be redirected into boosting treatment benefits and quickening response times for claims. The remaining roughly $1.7 billion will go to fund the one-time rate cut of 20 per cent.
“You shouldn’t need a lawyer to access the benefits you’ve paid for,” said Attorney General David Eby. “The current auto insurance system in British Columbia simply doesn’t work.”