B.C. government faces uphill challenge rebuilding public trust in ICBC

B.C. government faces uphill challenge rebuilding public trust in ICBC

By Kirsten McMahon

British Columbia’s plan to drastically overhaul the government-run Insurance Corporation of British Columbia (ICBC) requires careful consideration as the results could have significant effects on motor vehicle accident victim compensation, says Larry Herscu, president and CEO of Rhino Finance Inc.

“This sounds quite similar to what the Ontario government did back in the early 1990s when switching to a no-fault system,” he warns. “With that in mind, I think there’s a great deal B.C. can learn from Ontario and the slow, systematic changes and tweaks that have been made since no-fault was introduced in 1989.”

When the B.C. government announced the major changes to ICBC in February, Herscu says he received an influx of calls and emails from concerned stakeholders and those in the industry questioning what these changes will mean.

“Understandably, many people are concerned and wondering whether the government is going to try to make these changes retroactively on any claims occurring now,” he says.

“The good news, at least, is that the B.C. government has said this legislation, if passed, will apply to claims made after May 1, 2021,” Herscu notes.

At the time of the announcement, B.C. Attorney General David Eby said the legislation is a fundamental restructuring of ICBC that will keep car insurance rates low and stable. It’s estimated that the changes will save the average driver about $400, starting in May 2021, Global News reports.

“The no-fault model coverage will also significantly increase the amount of care and recovery benefits available to anyone injured in a crash, providing enough care for a lifetime for those who need it, to a maximum of at least $7.5 million, up from $300,000 today,” the article states.

“The most seriously injured will get even more care and recovery benefits, including a new permanent impairment benefit that will provide financial compensation of up to $250,000,” it continues.

While the legislation appears positive on its face, critics warn a no-fault system will punish young people and will mean those with the worst injuries in crashes will not receive the benefits they need.

Accident victims who still have complaints or disputes about their claim, benefit payments or fairness issues will not need a lawyer to have them resolved, states the government’s press release.

They will have recourse through:

  • the Civil Resolution Tribunal, which is independent of ICBC;
  • the B.C. ombudsperson; and
  • the upcoming ICBC fairness officer, who will be appointed by government to ensure greater independence from ICBC.
Herscu says the changes will restrict how much injured parties can receive in wage losses because they will be based on average earnings of $50,000 per year. As well, stay-at-home parents and students will not be entitled to wage-loss benefits.

Rhino Legal provides financial support to those who have been hurt in an accident while they await a fair settlement and Herscu knows all too well how devastating it can be when someone’s income is reduced, delayed or stopped due to an accident.

“You hope ultimately that your insurer is going to take care of you, but it’s a lengthy process. And if your benefits are exhausted or denied, it’s devastating,” he says.

Even if the province has the best intentions with the new insurance regime, Herscu says the government has an uphill challenge in rebuilding the public’s trust in the beleaguered ICBC.

“I don’t doubt that the government has the wherewithal to implement positive change –– the question is what is it going to look like on paper and in practice,” he says.

“My main concern is that those who have been hurt in a motor vehicle accident get the compensation they deserve as quickly as possible,” Herscu adds.