Money-losing ICBC to cap pain payouts

The Insurance Corp. of B.C. will put a $5,500 cap on pain and suffering payouts for people who suffer minor injuries in a crash, one of a suite of changes aimed at preventing rate increases and easing the “financial chaos” faced by the public insurer.

Attorney General David Eby announced the changes at a news conference Feb. 6.

In an effort to reduce legal costs, disputes about what constitutes a minor injury will be moved out of the court system and directed to an independent dispute resolution process, Eby said.

The changes, which take effect in April 2019, are expected to save ICBC $1 billion a year, he said.

The average payout for a minor body injury is $30,038, a 365 per cent increase from $8,220 in 2000. Pain and suffering makes up the bulk of that payout, with an average payment of $16,499.

Someone who suffers minor injuries in a crash, such as whiplash, cuts, bruises or sprains, will still be able to access medical services such as physiotherapy and be compensated for time off work. If the injury persists beyond a year and has an impact on the person’s work, it will no longer be considered minor.

ICBC will work with doctors to develop a clear, legal definition of minor injury. Minor injury claims now represent 60 per cent of injury claims, up from 30 per cent in 2000.

An unintended consequence of the $5,500 cap, a Victoria lawyer said, is that impaired drivers will have to pay less to the people they injure. Impaired drivers are not covered by ICBC and are responsible for paying all costs.

“We’re making it cheaper for drunk drivers to injure other drivers,” said Paul Pearson, a criminal defence lawyer who deals with motor vehicle accidents and impaired driving.

The cap is arbitrary and unfair to those whose pain and suffering extends long after they return to work, said Pearson.

There seems to be an attitude that some people involved in car crashes are milking the system, Pearson said. “If they are messing around, it quickly becomes obvious to everyone involved and they don’t get anything. The system doesn’t reward people who aren’t injured.”

The government is doubling the medical care and recovery allowance available to anyone seriously injured in a crash to $300,000. That will be retroactive to Jan. 1, 2018.

Those benefits have not been increased since 1991.

“There is no reason why someone who is seriously injured in a car accident should have to live in poverty because they can’t afford to pay out of pocket,” Eby said. “Without today’s announced reforms, ICBC will not have the money to increase these miserly benefits.”

Disability Alliance B.C. has been pushing for improvements to accident benefits for 12 years, said Jane Dyson, alliance’s executive director.

“The doubling of the overall allowance for medical care and recovery is a significant improvement,” Dyson said. “We welcome these long-overdue changes that will mean that people who are catastrophically injured in motor vehicle accidents have better supports available to help them rebuild their lives.”

ICBC will also cover a wider suite of treatments such as counselling, massage therapy, acupuncture and chiropractors. It will increase compensation people can receive for lost wages to $740 per week.

Giovanna Boniface, national director of professional affairs for the Canadian Association of Occupational Therapists, said B.C. occupational therapists have seen a decline in access to necessary treatments for injured drivers trying to recover after a crash.

“By raising the amount covered, and expanding the variety of treatments that are eligible, these changes will allow more people to have access to the treatment and adaptive equipment they need, thereby fostering quicker recovery and a return to meaningful daily activities,” she said.

The government is also working on changes to make bad drivers pay higher insurance premiums to more accurately reflect the strain they put on the system. Those changes will come after ICBC consults with customers to ensure ratepayers get a say, Eby said.

Last month, Eby called the situation at ICBC a “financial dumpster fire” as the company posted a net loss of $935 million in the first nine months of its fiscal year and a projected a $1.3-billion loss by the end of the fiscal year.

“For too long, difficult decisions have been put off and growing financial problems at ICBC hidden from the public,” Eby said. While there’s no “silver bullet” for fixing ICBC, Eby said, major changes over time will prevent a massive hike in insurance premiums.