Experts say the move could raise rates but also offer better protection than the current no-fault system
More than three years after the NDP switched to no-fault auto insurance for ICBC, Conservative Leader John Rustad is promising his party would reverse some of the changes and also end the insurance provider’s longstanding monopoly.
While trial lawyers and people who have suffered serious injuries in crashes are welcoming the proposed changes, critics say it has the potential to greatly increase the cost of insurance for the average driver and won’t necessarily offer better care to those who are injured.
Rustad said a Conservative government would get rid of the no-fault system in cases where an individual has suffered a “life-altering” injury and allow them to again seek recourse through the courts.
He also said he would introduce competition within the auto insurance industry by allowing the introduction of private insurers.
“ICBC, quite frankly, has lost its edge in terms of being able to be competitive, and I think it has the ability to be able to do that,” Rustad told reporters on Thursday. “That’s why we want to build competition and let ICBC be able to structure itself as competitively as possible so that we are seeing the best rates we can for people in British Columbia.”
Under the no-fault system, which came into effect on May 1, 2021, drivers are still able to receive compensation for injuries suffered in a car crash, including money for lost salary and different kinds of treatment, such as a physiotherapist, chiropractor or psychologist.
The difference is that reimbursement rates are set by the insurance corporation and victims of a motor vehicle accident can no longer sue for damages.
In the years since no-fault was introduced, a number of people have told stories of not being able to afford treatment because the Insurance Corp. of B.C. wouldn’t cover the full cost or of having to pay large sums up front while hoping that ICBC would accept their claim and cover some of the costs.
Many have also spoken out about the challenges of navigating a system without the representation of a lawyer, particularly while suffering from brain injuries or other impairments.
Victoria lawyer Tim Schober was hit by a car while riding his bike to work in 2021, leaving him quadriplegic.
He said the shift away from no-fault for life-altering injuries would be huge for him and his wife, Lisa, as he could seek legal recourse in order to get compensation for the full extent of his lost income and gain autonomy in being able to pay for the services and equipment he requires.
Currently, Schober has to submit all receipts to his extended coverage provider and then to ICBC and often doesn’t get reimbursed the full amount. His wife has quit her job to take care of him and is not receiving anything for her lost income.
“Every time I see my psychologist, most of the bill is covered by ICBC, but I have to pay $12 or $14 or something a session, which is an inconvenience for me, but for someone who actually is strapped financially, it can mean that they can’t get the treatment at all, because they just can’t afford to cover the shortfall,” said Schober.
In 2023, Schober launched a civil claim against the province in B.C. Supreme Court over the impacts no-fault insurance has had on him alongside the Trial Lawyers Association of B.C. which has long fought against the changes brought in by the NDP.
Trial Lawyers president Michael Elliott believes that ICBC has been given absolute power over injured British Columbians, which he says has often been to the detriment of those seeking compensation.
“The NDP have created a monster in ICBC through no fault insurance,” said Elliott.
“They’ve given a multi-billion-dollar Crown corporation that has a decades long history of not treating injured people fairly almost absolute power over those injured people. At the same time, they’ve taken away the ability for those injured people to sue, which is the only way that used to be able to hold ICBC accountable.”
Not everyone agrees with the changes the Conservative’s proposed changes.
Werner Antweiler, a UBC economist, said that all Rustad’s plan will achieve is increased insurance rates.
He acknowledged the complaints about the system but argued its problems are slowly being fixed.
“The enhanced care model ensures that people get the help they need throughout their lifetime, and are not stuck with a one-time settlement that may prove to be inadequate down the road, and that in any case is shared to a large part with the trial lawyers,” said Antweiler.
He also said there is very little evidence that competition from private insurance will lower rates and a 2022 study by Ernst and Young commissioned by ICBC found that B.C. drivers paid the third-lowest rates when compared to other provinces.
Basic insurance rates through ICBC have been frozen since 2019 and will not increase until at least 2026.
Eby told reporters on Thursday that no-fault systm has led to enormous savings for drivers with a $1.5 billion surplus for ICBC last year allowing it to keep rates stable and give a fourth rebate, of $110, to insurance holders.
He said the shift to private insurance proposed by Rustad would hurt young drivers by making them pay higher rates.
“The fact that John Rustad would directly target young people … when young people are struggling with affordability, I think is reckless,” he said, noting that auto insurance for young people is as much as double for young people in Alberta and Ontario, which have no-fault insurance but with private insurers.
He said Rustad is pandering “to high-paid personal injury lawyers and private insurance agencies from Toronto. It doesn’t benefit us. And so I couldn’t disagree with it more.”
But the 2022 Ernst and Young report found that, contrary to the NDP leader’s claim, an 18 year-old driver in B.C. can expect to pay much more in auto insurance than someone of the same age in Saskatchewan or Manitoba.
Eby said no-fault insurance undergoes a mandatory review every five years. The first review is slated for 2026.
“It’ll be informed by the people who have lived experience with the system, and who’ll say this worked well, this didn’t work well, and we’ll make sure it keeps working for British Columbians,” he said.
“We’ve got two jobs for our insurance system in British Columbia. The first job is to support people injured in a crash. The other is to deliver as affordable rates as possible.”