It’s the reason other provinces’ insurance rates are substantially lower than ours
By Paul Hurst
In Saskatchewan and Manitoba, car insurance is completely “no fault.” This means you cannot sue Saskatchewan General Insurance or Manitoba Public Insurance for money for “pain and suffering” from a car accident.
The insurance rates in those two provinces are substantially lower than in BC. In BC, the “no fault benefits’ are fairly limited. This is because there is universal health care to cover you for medical treatment. ICBC and BC Medical overlap coverage if you are at fault. You cannot sue yourself, so you cannot claim for “pain and suffering” if you are responsible for the accident.
If you are not at fault, it’s a completely different story. In BC, you have the right to make a ‘tort’ claim against the other driver if they are at fault and responsible for your injuries. Since ICBC covers the at-fault driver under their third party coverage (you are the third party in this case), you make your claim against ICBC.
An injury adjuster may settle with you, or you may be unhappy with that process and end up in court. To my understanding, your plaintiff lawyer will claim upwards of 30 per cent of any settlement with ICBC.
Because of the costs of personal injury claims against ICBC every year, the cost for insurance in BC is higher than Saskatchewan. Somewhere in the range of 60 per cent of your third party insurance premiums go towards paying injury claims.
If ICBC converted to a total no fault system, several things would happen:
1: Quite a few lawyers would be out of work.
2: You would not get a large cash settlement if you were injured.
3: You would not go to court to get money, thus the courts would be less backlogged.
4: The amount of coverage under mandatory no fault coverage would expand, so that you would likely get better medical treatment, wage loss, and other automatic benefits.
5: Quite a few ICBC staff might be out of a job.
6: Any claim you make would be far simpler and more automated.
7: The amount you pay for car insurance would be substantially less than what you pay now.
8: The chances of ICBC going bankrupt would be reduced. Since this is a possibility, the cost of the government bailing out ICBC could be onerous.
9: There are procedures in place in Saskatchewan and Manitoba to handle severe injuries, so looking to those two provinces as templates would make sense.
10: In Manitoba, the public is given the choice to add a tort coverage package to their insurance. This was the first time since the 1970s that people in that province could claim for personal injury. Surprisingly, few choose the option, as they are quite happy with the no fault system they have now.
If BC switches to a no-fault system, there will be endless political debate prior to any changes being implemented. A change may be precipitated by an economic crisis that puts ICBC into bankruptcy. Since much larger insurers like AIG have gone bankrupt, it’s possible it could happen to ICBC. The cost of injury claims was in the billions of dollars per year, and it’s the ratepayers who own cars that foot the bill.
Ultimately, it’ll be you who decides, so you might want to educate yourself further on no-fault insurance.
