Of the many smart and progressive transformative changes introduced by the Horgan government, the new “care-based” no-fault ICBC system should prove to be one of the NDP’s proudest and most popular legacies.
Kudos to the premier, Attorney General David Eby, and all who had a hand in that commendable initiative to get all B.C. taxpayers out of the mangled wreck that the NDP inherited from the B.C. Liberals.
That old ICBC jalopy that had served British Columbians so well for 40 years, before Christy Clark’s crew drove it off the cliff on their 2017 re-election joy-ride, was simply not salvageable.
It was a write-off: structurally unsound, smashed to bits and beyond repair due to the B.C. Liberals’ wanton negligence and gross mishandling. [See related stories.]
As we all know, ICBC was the victim of the Liberals’ chicanery, duplicity, and incompetence. It was buried in debt from years of mismanagement, rising claims costs, and unconscionably high legal costs that threatened to crush ratepayers with massive premium hikes.
All of which called for a replacement vehicle, if you will, either through some form of no-fault public auto system for basic insurance; or through a different tort model that envisioned more privatization, as advocated by Andrew Wilkinson, the trial lawyers, and the Insurance Bureau of Canada.
Thank God the NDP made the right choice and opted to replace the old ICBC with a brand new no-fault public auto insurance vehicle.
One that builds on the successful models in Manitoba, Saskatchewan, and to a lesser extent, Quebec.
One that will soon be the best in class in Canada, and leave Alberta’s increasingly creaky private auto insurance system choking in our dust.
One that also builds on the other measures the NDP previously announced to make ICBC more transparent and responsive to claimants’ needs.
Lower ICBC rates coming
Why will ICBC’s new and improved Enhanced Care coverage be so much better for British Columbians?
You can read all about it here. It’s a great site, loaded with clearly communicated facts and info.
The changes envisioned make so much sense, only the B.C. Liberals and the trial lawyers who stand to lose millions of dollars at ratepayers’ expense could hate them.
What’s not to like about the NDP’s ICBC rate-freeze this spring?
What’s not to like about the average 20 percent cut in basic and optional insurance premiums, equal to about $400 per vehicle, that will take effect in May 2021?
Sorry, Andrew, but you and your party will have to find another problem of your own making to try to lay at the feet of the NDP.
OK, so that 20 percent rate cut won’t be the same across the province. It will probably be considerably less for motorists in many communities with lower claims rates and costs.
Nevertheless, it will especially benefit motorists living in Metro Vancouver and in the broader region, where insurance rates are now typically much higher.
And that 20 percent average in savings will particularly help young and inexperienced drivers. The government suggests it could result in an annual saving of $700 for someone with a current premium of $3,500, or $300 less for a driver now paying a $1,500 premium.
Better yet, the new model that will increase the maximum allowance for care and recovery benefits from $300,000 to at least $7.5 million. That’s 24 times higher than what is available today. It’s huge.
Less money will go to lawyers
As ICBC explains, “Enhanced Care coverage will be there for you if you’re injured in a crash, regardless of who was responsible… Treatments like physiotherapy, chiropractic and massage will continue to be covered, as well as dental care, counselling, medical equipment and more.
“You will also be covered for household support or personal care during your recovery, if needed, to much higher limits than before. New and extended limits on benefits will be available for anyone who is catastrophically injured in a crash.
“You won’t have to worry about how you’ll pay your bills while off work due to an injury, because you’ll also receive wage loss payments of up to $1,200 per week. This is a 60 per cent increase from the $740 maximum you could receive per week today.
“If you’re self-employed, a student, family caregiver or retiree, you’ll also have access to new benefits to cover income, time lost from studies, or increased expenses.
“These benefits are available to all British Columbians—even if you don’t drive a car. Whether you’re a pedestrian, cyclist or passenger, you'll be covered if you’re injured in a crash.”
How is this possible?
In part because this new no-fault model will see ICBC’s annual legal costs reduced from a projected $960 million in 2022, to only $100 million.
Sure, the ambulance chasers and the B.C. Liberals will fight this transformation tooth-and-nail, as they have fought David Eby every step of the way in his previous efforts to reduce legal costs.
But unlike their successful war against the NDP’s attempt to introduce no-fault insurance in the 1990s, this time, they won’t win. Not a chance.
Because many more British Columbians are now wise to the fact that those rapidly rising legal costs, injury claim settlement costs, and pain and suffering payouts have largely gone into the trial lawyers’ pockets.
As much as one-third of the cash benefits paid out to ICBC claimants in those instances goes to the lawyers—not to the people they are intended to benefit.
And that fact, along with the exorbitant awards imposed after lengthy litigation processes, is one of the key reasons why ICBC is bleeding red ink to the tune of over $1 billion a year.
To say nothing of the B.C. Liberals using ICBC as a cash cow, as they scooped $1.3 billion in “dividends” paid by ratepayers into provincial government coffers. Or to say nothing of their duplicitous measures to shred, reject, and “cleanse” ICBC’s desperate efforts to stop the bleeding that the B.C. Liberals only tried to hide.
Those $860 million in annual legal cost savings under the NDP’s new no-fault model will result in billions of dollars over the next decade. All of that money will be redirected to enhancing care and recovery benefits and to keeping premium rates as low as possible.
This time, despite the trial lawyers’ best political efforts, most British Columbians will welcome the NDP’s new path for ICBC.
No-fault works well in other jurisdictions
We now have the benefit of how no-fault insurance has worked in other jurisdictions.
Indeed, it’s yet another sensible policy change that former B.C. Green leader Andrew Weaver was advocating back in the NDP’s early days in office, when Eby was still ruling out the no-fault option. Better late than never. I’m just glad he got the religion.
We can also see the untenable downside of remaining the only province in Canada relying on the outdated full tort “see-you-in-court” model that Wilkinson so cherishes in defending his party’s historic donors.
Saskatchewan has a similar system to ICBC’s new model. It hasn’t had a rate increase in five years.
Unlike our forthcoming new insurance model, motorists there have the right to opt for a tort option auto insurance whereby they retain the right to sue for “pain and suffering” (subject to a $5,000 deductible) as well as financial loss in excess of no-fault benefits.
Yet less than one percent of those insured choose to exercise that option, happy as they are with their no-fault system.
Manitoba’s no-fault public auto insurer has kept its annual rate increases below the cost of inflation for many years. It actually decreased basic insurance rates for 2020.
In short, the no-fault system works well, Canadians now know that, and the NDP’s version here in B.C. is bound to be even better.
Actually, as Horgan is quick to point out, the “no-fault” label is a bit confusing and can lead to misinterpretation.
Under the new Enhanced Care system, drivers who are found to be at fault in crashes will still face higher insurance costs. Their premiums will still go up as they do now if they are at fault for a crash.
Who is at fault will still matter for ratepayers, just not for treatment and care coverage.
Importantly, people who are injured by dangerous drivers convicted of specific Criminal Code offences, such as impaired driving, will still be able to sue for additional compensation. Which is to say, those at-fault drivers will not escape justice in civil courts.
Injured parties will also still have the ability to sue others for damages “if their actions may have contributed to the crash, such as a pub owner or vehicle manufacturers”. That’s very significant.
What about autonomous vehicles?
It is hugely important for the future—and an improvement on other no-fault models in Canada—to the extent that it also applies to fully automated vehicles.
It is an issue that ICBC hasn’t really addressed, as far as I can tell, and one that demands more clarity.
Ironically, the whole question of who will be held responsible for crashes involving product malfunctions in self-driving vehicles is something that has been flagged by the Insurance Bureau of Canada (IBC).
Within a decade, self-driving vehicles, working in tandem with 5G telecom networks, will fundamentally change the auto insurance landscape.
The good news is that that technological transformation in how we drive stands to reduce collisions, injuries, and growing claims costs, as those largely safer vehicles also save lives.
The IBC explains it this way:
“Canadians spend at least 5 billion hours per year driving, resulting in approximately 2,000 fatalities and more than 160,000 injuries annually. Automated vehicles could change this trend.
“They could make the roads safer, enhance mobility, and reduce traffic congestion and emissions. According to the Conference Board of Canada, Canadians could save $65 billion annually, including $37.4 billion in collision costs, $20 billion in time, $2.6 billion in fuel and $5 billion from less congestion.”
Sounds great, but ICBC needs to clarify how the new no-fault system will operate in that brave new world. Especially in instances where either the automated vehicles and/or the systems and technologies they depend upon cause crashes and injuries.
The Insurance Bureau of Canada points out that there will be five levels of vehicle autonomy, ranging from driver-only vehicles, to driver-assisted vehicles, to full self-driving vehicles that might operate only under some driving conditions or under all conditions.
This will entail new insurance risks and fewer collisions. But it will also increase repair costs.
It will have major implications for data collection and vehicle monitoring, which will be newly important for assessing risk, pricing auto insurance, managing claims, and detecting fraud.
And it will result in a shift, from the driver to the automated technology, in assessing fault and settling claims costs. That will in turn result in more product liability litigation.
Anticipating that coming challenge seems to be part and parcel of the NDP’s new vision for enhanced care coverage under the new no-fault system.
Is it better or different than the systems in Saskatchewan and Manitoba on that front? I’m guessing the answer is “yes”, but how, precisely?
I take it the new ICBC system will still cover injured parties in those cases where the automated car and its technology, not the driver, is at fault for crashes.
I expect it will be ICBC, not claimants, who will have to fight it out in court with the vehicle manufacturers and their component suppliers under the NDP’s new no-fault model.
Ditto with the telecoms and/or others, if they are to blame for technologically driven crashes in our “smart communities”.
Will injured people still have the right to sue those at-fault parties for additional compensation? I assume so, but that too should be clarified.
As the Insurance Bureau of Canada wrote, “This shift in responsibility for collisions from humans to automated technology means many injured people will have to proceed through product liability litigation to get compensated.
“Product liability litigation is more complex and takes years longer to resolve than traditional motor vehicle liability claims. The longer wait will delay compensation for many people who use automated vehicles or who are injured in a collision involving an automated vehicle.
“Changes are needed to Canada’s auto insurance policies and supporting legislation to ensure that people injured in collisions involving automated vehicles get compensated fairly and quickly.”
The IBC went on to argue the following:
“No-fault insurance for automated vehicles cannot co-exist with the mixed no-fault and tort policies that are common in Canada.
“Although no-fault insurance may be the best approach in an environment where most vehicles are automated, having all provinces transition to no-fault insurance in the near future, when automated vehicles are only starting to be available for use, would be a major public policy change. It would also come with significant risks because of no-fault insurance’s vulnerability to fraud and overall high costs.”
The IBC recommended two changes.
One is a “single insurance policy covering both driver negligence and the automated technology [that] would ensure that vehicles continue to be properly insured and that people injured in collisions involving automated vehicles are compensated fairly and quickly.
“…if the automated vehicle caused the collision, regardless of whether the driver or automated technology is responsible, an injured person would pursue a claim directly against the automated vehicle’s insurer. If the automated technology caused the collision, the insurer would compensate anyone injured, including the person in the driver’s seat of the automated vehicle.
“After compensating the injured people, the insurer would have a right to recover liability payments from the party responsible for the collision, such as the vehicle manufacturer or the technology provider."
Is this what the NDP envisions in its new enhanced care ICBC system? Do tell.
The second change the IBC suggested is a “data-sharing arrangement with vehicle manufacturers, vehicle owners and/or insurers [that] would help determine the cause of a collision, whether the vehicle was in manual or automated mode at the time of the collision and the vehicle operator’s interaction with the automated technology”.
Good idea, no? How might the new ICBC help to lead that data-sharing initiative, if at all?
Is this something Premier Horgan will advocate on a national level, with the federal government, or with other premiers, at the next Council of the Federation meeting?
Also, how will the new ICBC model impact the availability and timing of online insurance renewals, if at all?
On the surface, one would think the new no-fault system will help to expedite that long overdue improvement as an integral part of its rollout in May 2021.
That right, Premier? And if not, why not?
It is hard to fathom the hold-up in bringing ICBC into the digital age that virtually every commercial enterprise but it embraced eons ago. Credit card payments online, now, please.
B.C. Liberals put on the defensive
Finally, what about the politics of this new system?
In one deft, fell swoop, the NDP took that key issue off the table that really threatened to hurt the party in 2021.
Namely, rising ICBC rates and the public’s growing mistrust of and dissatisfaction with that company that Andrew Wilkinson’s B.C. Liberals nearly drove into bankruptcy.
Because the new enhanced care no-fault model won’t kick in until May 2021, it leaves Horgan’s options wide open for an early election this fall or next spring, if the GreeNDP alliance crumbles.
I know, I know, the premier professes he has no intention of calling an early election.
But I have my doubts, especially if the economy starts reeling from the coronavirus or other global events, or if Weaver ultimately decides to vacate his seat after the Green leadership “race”.
Indeed, it make sense for the NDP to run on the 20 percent ICBC rate cut and the enhanced care coverage that the new no-fault system will provide before it is actually implemented.
If the rate cuts are not as great as expected by voters in some key swing seats/regions, the B.C. Liberals will try to attack the NDP for lying about Horgan’s promised rate cut. That could hurt.
Early kinks in the new system could also cause some political challenges that would be avoided by running on the forthcoming new ICBC, instead of running on how the NDP’s new no-fault system actually fares in its first six months.
Regardless, if all goes according to plan and we don’t go to the polls until October 2021, the NDP should have much to crow about.
If the rate cuts meet public expectations, people will sure feel that in their wallets—at least the ones who renew their insurance before the election will.
As I said, what’s not to like?
An ICBC rate freeze. Lower rates. Exponentially better care coverage.
Dramatically lower legal costs. A new auto insurance model that finally douses the Liberals’ “Dumpster fire”.
A better public insurance model that no one with half a mind should want to risk trashing under a Wilkinson-led government that thinks we should all pay higher insurance premiums to pad the trial lawyers’ pockets.
All in all, the NDP’s rearguard salvage operation on their historically popular public auto insurance system is a stroke of brilliance.
That whooshing sound you hear is the air going out of the tires on the B.C. Liberals’ ICBC privatization bus.
Well done, messieurs Wilkinson, Coleman, de Jong, Stone, Johal, et al.
You wanted change, you got it.
And happily, it will mean that the ICBC they all fought so hard to demolish will instead live on: better and stronger than ever, as a no-fault public auto insurance company that really puts people, ratepayers, and taxpayers first.