All You Need to Know About ICBC’s New No-Fault Insurance
British Columbia recently overhauled its auto insurance system by implementing a new plan called Enhanced Care. The changes are supposed to reduce insurance rates by 20 percent, which averages out to $400 per driver annually. But there are many flaws in the Insurance Corporation of British Columbia’s (ICBC) no-fault plan. People who are injured by reckless drivers are now limited in their ability to take legal action and pursue fair compensation for their losses. ICBC also assumed more control and decision-making authority over how compensation is awarded when Enhanced Care took effect, placing British Columbians at a distinct disadvantage.
What Is No-Fault Insurance?
No-fault auto insurance means that the BC residents may receive benefits for their injuries and wage loss after a crash, regardless of who was at fault. It’s also known as first-party coverage.
Under Enhanced Care, accident victims will not be able to sue the at-fault driver, except in cases where the driver is convicted of a particular Criminal Code offense, like driving while intoxicated. Instead, claimants who have disputes about their payments will have to go through the recently established Civil Resolution Tribunal (CRT), an ombudsperson, or an ICBC fairness officer to have their complaints heard.
This plan doesn’t help injured people in the slightest. If no one is “at fault” for an accident, then the negligent driver has no consequences for their bad decisions except for an increase in their premiums. In addition, most car accidents are not due to criminal conduct, leaving accident victims very few options for a fair recovery.
In a statement, the Trial Lawyers of British Columbia noted that the shift to no-fault insurance is “a deliberate taking away of the right of British Columbians to receive fair access to the courts and a fair settlement to those injured on our roads.” At Warnett Hallen LLP, we agree with this opinion.
What Is Covered Under No-Fault Insurance?
Anyone injured in an auto accident can receive benefits, payments for medical care, and wage-loss compensation in amounts pre-determined by ICBC based on the type of injuries suffered. This includes pedestrians and cyclists.
According to ICBC, enhanced care means better care and coverage after a car accident. For example, consumers now have access to a maximum of $7.5 million in medical and rehabilitation compensation versus the current $300,000. This, ICBC says, will better serve accident victims throughout their lifetimes. In addition, payments for lost wages due to a car accident will increase to $1,200 a week from $740, with the option for people who earn higher incomes to purchase more coverage. Of course, this also means those individuals will see a premium increase, despite ICBC’s enthusiastic talk about savings to customers.
In addition, the majority of payments for pain and suffering and non-tangible damages, like lost enjoyment of life, are not part of Enhanced Care. British Columbians had already experienced a drastic drop in awards for pain and suffering after ICBC capped them and limited them to those with “major injuries.” Now, the tables are turned on consumers again, further restricting how much they will be able to get when they need it most.
Why Did ICBC Make This Reform?
The government shift to no-fault insurance is an effort to move away from a litigation-based insurance model. ICBC estimates that the changes will save $1.5 billion in legal fees, allowing that money to be put toward rate cuts, more benefits, and faster claims processing.
However, the shift also means that accident victims will only receive what ICBC thinks they are entitled to rather than what they actually deserve.
Here’s an example. Imagine you’re hurt in a car accident and out of work for several months. Under Enhanced Care, 90 percent of your income can be replaced each week, up from 75 percent under the former plan. Sounds fantastic in practice, but keep this in mind — people who used to be able to hire a lawyer and file an injury claim had the potential to recover the full amount of their lost wages, not just a portion of them.
Contact a British Columbia Car Accident Lawyer
During this time of unprecedented change, you need a car accident lawyer who understands the ICBC system and can help you navigate it. Put the Vancouver lawyers at Warnett Hallen LLP to work for you. We have decades of experience going up against ICBC when accident victims are denied full and fair settlements. We’ll be with you every step of the way, both now and in the future.
Call or contact us now for a free consultation.
This post was originally published in August 2020 and has been updated for accuracy and comprehensiveness in June 2021.
