Stephen Rees's blog

The front page of Saturday’s Vancouver Sun was the need to raise insurance rates identified by a leaked report that the BC Liberals asked for, and then kept quiet about. Over the next 24 hours the tone of the Sun story has changed on line since, of course, the corporation (Postmedia) that publishes the Sun supports the BC Liberals. So the banner headline on line now reads “NDP must come clean about plans for ICBC, Liberal Opposition demands” rather than “Huge ICBC rate hikes loom without reform:report”. The report comes from Ernst & Young and is critical of the policies of the BC Liberal government which cross subsidized mandatory basic rates from the profitable optional side.

The report was commissioned by ICBC’s board earlier this year, but was not made public. A copy was leaked to Postmedia News.

While ICBC premiums are among the highest in Canada, the report said, “they are not high enough to cover the true cost of paying claims.”

“More accidents are occurring on B.C.’s roads, and the number and average settlement of claims are increasing. Only recent government intervention has protected B.C. drivers from the currently required 15 per cent to 20 per cent price increases. This rate protection has eroded ICBC’s financial situation to a point where it is not sustainable.

“The average driver in B.C. may need to pay almost $2,000 in annual total premiums for auto insurance by 2019, an increase of 30 per cent over today’s rates,” the report said, adding that assumes that current trends persist, that ICBC is expected to cover its costs from its premiums and that significant reforms are not made.

There are a number of recommendations

The review suggested B.C. could follow the models of New Brunswick, Alberta and parts of Australia by capping payouts for pain and suffering on minor injuries from $4,000 to $9,000, while at the same time increasing accident wage and medical benefits.

It’s also possible to let drivers buy an optional “top-up” coverage that would, in effect, give the drivers back the right to sue to replace any reduced claim money they could have got through the courts.

Minor claims have soared in cost by 365 per cent since 2000 and are eating up 60 per cent of all total injury payouts, says the report. The size of cash settlements for minor injuries is also rising, as is the number of accidents on the road and the cost to fix technology inside modern vehicles.

Of course the Liberals are already accusing the NDP of wanting a “no fault” system – even before the new government has had time to get their feet under the table. The Liberals are also in full damage control mode since it was their decision to cancel photo radar that started the problem. Changing red light cameras to catch speeders would be a relatively easy thing to do, but the real speed problems are out on the open road. The intersection issues arise from contempt for other basic rules of the road, lack of common courtesy and patience, and an almost total absence of common sense.

Unfortunately there is no mention of the interval camera system. This uses existing technology widely used in traffic surveys to match number plates over a fixed distance. The owner of the vehicle gets a ticket when the car has covered the distance between two cameras in much less time than the posted speed limit allows. This system is more effective that the just at this point of the old photo radar – which was housed in a fairly distinctive vehicle, and thus fairly easy to avoid.

I think another reform is not just capping the amount allowed for minor claims, but also banning the present practice of lawyers advertising for claimants and being paid on a share of the payout. The incessant repetition of these ads during the CBC 6pm tv news means I now know them off by heart. And the message is that you can make ICBC increase the payments they offer if you sign on with a the named lawyer. Of course, what it does not say is the increase in the settlement goes to the lawyer and not the plaintiff. I find these practices offensive and they have only been permitted in recent years and should be reversed. It simply wrong to expect to make a profit from the suffering of others – and I think these adverts get very close to encouraging people to exaggerate their claims.

The mismanagement of crown corporations under the previous government is going to take some time to correct. If I were advising the BC Liberals, I would tell them to tone down the attacks, when clearly the current government has to do what it can to sort out the mess the Liberals left behind. The current tone taken by my local MLA Andrew Wilkinson, Liberal MLA for Vancouver-Quilchena is not one that is going to win him much support. Except from Mr Toad who enjoys speeding and relishes crashes as exciting intervals in an otherwise dull existence.