The B.C. government announced significant changes to ICBC's system Thursday, which is expected to lower average insurance premiums by approximately 20 per cent.
ICBC is set to remove lawyers and legal costs associated with its current litigation-based system, and will transition into a new care-based model. The system will ensure health care benefits are available to anyone injured in a crash, regardless of who is at fault.
Similar care-based insurance systems are already in place in Manitoba and Saskatchewan, which have kept yearly rate changes close to 0 per cent, according to the B.C. government.
Under the new care-based model, British Columbians' ability to sue drivers in a crash will be extremely limited. However, people who are injured in crashes will still be able to file lawsuits for additional compensation if drivers have been convicted of certain Criminal Code offences, like impaired driving.
The removal of the majority of ICBC's legal fees is set to save the Crown corporation $1.5-billion in its first full year, which will translate into savings for ICBC customers.
In total, ICBC estimates that premiums will drop by approximately 20 per cent, or an average of $400 in savings per driver. Meanwhile, maximum care and treatment benefits for people injured in crashes is predicted to increase at least $7.5-million.
For individuals who face serious or long term injuries, new, long term benefits will replace ICBC's current system of lump-sum payments.
"You shouldn’t need a lawyer to access the benefits you’ve paid for," said Attorney General David Eby in a news release Thursday.
"By removing expensive lawyers and legal fees from the system, we are making ICBC work for British Columbians again with more affordable insurance rates and much better coverage, so anyone injured in a crash gets the care they need."
ICBC's new system is expected to go into effect in May 2021. Legislation to begin the transition is expected to be introduced in the coming weeks.
British Columbians who are looking to dispute their claim under the new system can do so through the Civil Resolution Tribunal or the B.C. ombudsperson. The provincial government is also slated to create an ICBC fairness office, which will work independently from the insurance company itself.