What You Need To Know About ICBC’s New No-Fault Insurance

In response to continual financial losses at ICBC, huge changes are underway for BC auto insurance with a new no-fault system that will come into place on May 1, 2021. This insurance model means that ICBC will pay money to you directly instead of you needing to engage in a lawsuit after an accident to win damages. This new system will bring about a big shift to B.C. motorists. Here’s what you need to know about the largest reforms to auto insurance in B.C. since ICBC’s inception.

1. Trials or litigation will only occur in some cases

There will be a limit to which types of collisions will allow a driver to go to court. It will only be possible to sue if an injured driver is involved in a collision with someone charged with a criminal offence and if a manufacturer or repair facility has done faulty work.

2. ICBC will cut rates by 20%

You will see an average of 20% off the premiums starting in 2021 and there currently aren’t any increases in the rate for this year. This could save drivers an average of $400 per year.

3. These reforms will save approximately $1.5 billion annually

ICBC states that savings will allow a boost to the type and length of the benefits you receive after an accident, such as massage therapy, physiotherapy, chiropractors, and counselling. Additional benefits such as school fees, travel, and personal care assistants will also be compensated. ICBC customers will have up to $7.5 million in medical and rehabilitation (the current system only allowed for $300,000 in terms of compensation).

For example, under this new system, a child injured in a motor vehicle accident could receive the services of permanent care aides worth $10,000 a month, missed school compensation up to a maximum of $20,000 a year, homemaking costs, and recreational benefits. A lawsuit and court-awarded judgment will not be necessary to receive this compensation.

4. Wage benefits

ICBC’s pay for lost wages will increase to $1200 a week under this no-fault system, compared to the $740 set in 2019. Optional add-on insurance will be available for extra wage benefits for those who earn more than this amount.

5. Who will determine your benefits?

Your doctor, not ICBC, will determine the treatments you receive and the duration.

6. The fault will still be determined

Who is at fault in a crash will still be determined to increase the premiums of bad drivers. Everyone will receive the same medical benefits regardless of who is at fault in a crash. Auto adjusters will continue with traditional damage assessments to handle vehicle repairs.

7. Pain and Suffering

Compensation for pain and suffering from minor injuries will be eliminated. However, the money will be set for categories of major injuries with a maximum amount set by ICBC.

8. Cyclists

This change to the system may mean bad news for cyclists. Cyclists are usually more seriously injured as a consequence of negligent motorists. Unfortunately, this new system could prevent victims from getting appropriate compensation beyond medical coverage with things like income loss protection being capped. You will only receive what ICBC determines you are entitled to.

B.C. has been the last province to allow a purely litigation-based model for auto insurance. This new no-fault system will essentially eliminate the role of personal injury lawyers.