ICBC is planning changes to British Columbians’ auto insurance coverage which they say will save the average driver $400 a year in premiums.
The Crown corporation is filing an application with the BC Utilities Commission (BCUC) to move to a proposed “Enhanced Care” system.
Under this plan, anyone injured in a crash will no longer be able to pursue litigation to receive care benefits or compensation
There will be some exceptions permitted if the at-fault driver is also convicted under certain sections of the Criminal Code, such as impaired driving. Third-party litigation will also remain a possibility, such as suing vehicle manufacturers or pub owners.
With the proposed Enhanced Care plan, anyone hurt in a crash will be offered maximum allowances of up to $7.5 million for personal care — up from $300,000 — and up to $1,200 a week in wage loss benefits — up from $740 a week.
ICBC says replacing litigation with increased benefits will save the corporation $1.5 billion in legal costs in the first full year of Enhanced Care coverage.
Public Safety Minister Mike Farnworth says the Enhanced Care plan savings will be used to lower premiums for the majority of British Columbians.
According to the minister, this would represent the largest single rate drop in the province in over 40 years.
“With its approval, starting May 1st, drivers will begin seeing savings of 20 per cent — or about $400 — on their basic and optional vehicle insurance,” he said at a press conference on Monday.
Farnworth added that some drivers may see rebates sooner than that, since ICBC will be lowering third party liability rates starting February 1, 2021.
If the changes are approved, ICBC will provide a one-time prorated refund to customers based on the difference between their current Autoplan coverage and the new Enhanced Care coverage, for the portion of their existing policy that extends past May 1, 2021.
For example, if a customer’s plan is set to expire six months after May 1, 2021, that customer will receive a prorated refund based on the six-month difference between their current plan and what they would be paying under Enhanced Care coverage.
ICBC says in this example, the refund would be approximately 10 per cent, or $200. They added that refunds will be issued shortly after the implementation of Enhanced Care.
When asked how rebates will be distributed, Farnworth said it will depend on how customers paid for their insurance.
“If you wrote a cheque or paid by cash, then you will get your rebate in that form,” he said. “If you did it on your credit card, then it will be credited to your credit card.”
The BCUC holds the final decision over ICBC’s application for the proposed changes, but Farnworth said he is confident it will be approved.
“The rate filing will lay out why this is the right thing to do,” he said. “ICBC has not only the ability in terms of being able to provide the rate of reduction, but will also have in place the necessary financial stability to be able to do that.”
