No one likes to see auto insurance rates rise. From our perspective, it puts the burden of paying for accidents caused by bad drivers squarely on the backs of good drivers. Unfortunately, the Insurance Corporation of British Columbia (ICBC) has continually raised rates to offset massive shortfalls in revenue.

A rising number of accidents coupled with a significant increase in payouts for damage claims for increasingly complex and expensive automobiles, together with settlement amounts for people with injuries of all kinds, have further affected ICBC revenue totals and the NDP government has indicated that this could mean additional rate hikes.

To help offset this, the government and ICBC are now considering placing caps on what they would consider “minor” injury claims. A cap would mean that anyone making claims for pain and suffering on injuries sustained in car crashes could be limited to recovery of as little as $4,000 to $6,000. ICBC says caps on claims have worked in other provinces and even the NDP – who has flatly refused to consider no-fault insurance – is supporting this initiative as a way to help freeze potential rate hikes.

For a number of reasons, we’re concerned about this new direction that’s being considered:

• Limiting a person’s right to damages does not allow for the expansive differences that exist between personal injury claims. No two injuries are alike: one person may be impacted greatly in terms of lifestyle and functioning, while another might have very little impact on their life. Under a cap, for the same type of injury, both would receive the same with little or no flexibility allowed. It all depends on how the person was injured along with other variables.
• Some injuries do not show their significance until weeks or even months after an accident. If a person should be forced to take a buyout through the proposed cap system outlined above, that individual wouldn’t have any further recourse should an injury traced back to an accident not entirely clear up.
• Much of the costs associated with ICBC’s increasing losses relate to property damage rather than personal injury. Most people are probably not aware that a single side mirror for a late-model Ford F350 pick-up truck costs more than $2,000 to replace. Import cars can be even more expensive to repair, even where minor damage is involved. These types of claims have skyrocketed in recent years and it’s not going to get any better. Why should repairing cars be more sacred than compensating injured people?
• Several years ago, upper management at ICBC began downsizing and purging many of their long-term, highly skilled claims adjusters and managers, replacing them with younger, largely inexperienced staff. Many of these new and inexperienced staffers, who have been left to adjust claims, simply don’t have the skills necessary to efficiently handle injury claims. Moreover, they tend to resist too many claims that can – and should – be settled and instead have been forcing injured people to unnecessary trials where outcomes are foregone conclusions. ICBC now wants to end those rights because of its own mismanagement.

The politicians would rather appease the public by offering a freeze on insurance premiums. Sometimes reality dictates that the cost of a product will rise with inflation and other realities of the marketplace. Raising insurance rates to offset ICBC’s revenue shortfalls may not be the entire answer. However, putting caps on claims that would limit the rights of injured people to negotiate fair settlements is nothing more than playing politics with those peoples’ lives.

We believe a more proactive approach is to look at how current gridlock issues – more expensive high-tech cars, more drivers, longer commutes, claims backlogs, etc. – that face Lower Mainland residents could be addressed. We also firmly support an internal audit of ICBC operations to identify inefficiencies and potential cost savings.

If you are against the government’s idea to limit personal injury settlements by placing caps on minor injury claims, we encourage you to take action by signing our online petition.

SOURCES

• Government considers cap on minor injury claims to ‘fix’ ICBC finances
• Provincial government considers capping minor injury claims
• NDP swerves around no-fault fix for ICBC finances