When the Insurance Corp. of B.C.’s new restrictions on “pain and suffering” payouts and court experts take effect April 1, B.C.’s monopoly vehicle insurance system will be “substantially the same as Alberta’s” but with higher premiums, says a new report from the Insurance Bureau of Canada.
The private insurance group has been lobbying for B.C. to open up basic vehicle insurance to competition, as ICBC struggles with soaring injury claim and legal costs. The B.C. government has imposed sweeping reforms to try to cut costs, as it faces a deficit of more than $1 billion for the fiscal year that ends March 31.
The Insurance Bureau retained accounting firm MNP to examine auto insurance rates and payouts in Alberta and B.C., for the same vehicles with $1 million third party liability, $500 deductible collision, $250 deductible and uninsured motorist protection.
Report from @InsuranceBureau says once #ICBC caps on litigation and minor injury payouts take effect April 1, the main difference between BC and Alberta will be the lack of competition here #bcpoli pic.twitter.com/S9pi5jjb58— Tom Fletcher (@tomfletcherbc) March 21, 2019
“With the changes coming on April 1, the auto insurance systems in B.C. and Alberta will be substantially similar, with the key difference being who sells auto insurance in each province,” said Susan Mowbray, a manager at MNP. “That difference has contributed to drivers in B.C. paying more than their neighbours in Alberta for similar coverage.”
ICBC spokesperson Joanna Linsangan said Thursday the latest changes make the corporation “work again for drivers, without losing the virtues of public insurance” that include its CounterAttack road checks and operating driver licensing.
“No private insurer invests in police enforcement, road safety improvement projects and makes sure that anyone who gets a licence in B.C. is safe to drive,” Linsangan said. “No private insurer could come into B.C. and offer the rates they offer in Alberta. Our system and cost pressures are very different and the levels of coverage provided to British Columbia far outweigh those in other provinces.”
The levels of coverage provided to British Columbians outweigh those in other provinces. Our medical care benefits are six times those offered in Alberta, and as of April 1 our wage loss payment will be almost double. https://t.co/32UOclghF2 ^jl— ICBC (@icbc) March 21, 2019
ICBC has argued that higher accident rates are an issue across North America, despite safety improvements to roads and vehicles.
Attorney General David Eby says B.C. is not considering going to a no-fault insurance system, and the adversarial court method is being retained for major injuries. Another change taking effect April 1 diverts minor injury claims to an administrative tribunal.
Those changes will affect about 80 per cent of injury claims, and have sparked a legal challenge from the Trial Lawyers Association of B.C., arguing the court’s independence is being affected.