What Is No-Fault Insurance in British Columbia?
The launch of the no-fault auto insurance scheme on May 1 brought a number of changes to the process of filing a claim after a motor vehicle accident in British Columbia. Unfortunately, the majority of these changes are unfavourable for those who have been injured in accidents, including drivers and pedestrians.
Motorists, pedestrians, and cyclists should be aware of the changes to the ICBC system, especially as they apply to claims for compensation. Klein Lawyers is actively monitoring the new no-fault insurance model, and we remain committed to educating clients as to their rights and legal options.
Please contact our car accident lawyers if you have been injured in a motor vehicle collision in Vancouver or another community in British Columbia. Your initial consultation is free.
How Does No-Fault Insurance Work?
The new no-fault system expands many of the Part 7 benefits available after an accident. However, it effectively does away with the option to file a tort claim against a careless driver. As a result, those who have been harmed by the negligence of another driver have little to no options to pursue fair compensation for their injuries.
ICBC is touting no-fault insurance as an “Enhanced Care” model. Accident benefits under Enhanced Care include:
- No limits on benefits for medical care and rehabilitation expenses, including:
- Occupational therapy
- Prescription medications
- Dental care
- Home and vehicle modifications
- Medical-related travel and accommodations
- Income replacement benefits covering 90 percent of net wages (subject to a cap of $100,000 annual income)
- Benefits for family caregivers incapacitated by their accident injuries
- Personal care assistance benefits
- Death benefits and grief counselling
Those who have been seriously injured in an accident may be eligible for additional compensation, including a permanent impairment benefit, a recreational benefit, and an increase in the personal care assistance benefit.
What Are the Disadvantages of BC No-Fault Insurance?
ICBC and the government of British Columbia have done an excellent job of promoting no-fault insurance as an “enhancement” that reduces insurance premiums and expands benefits for accident victims. In reality, however, the change to no-fault comes with a number of significant drawbacks, especially for those who were injured in accidents through no fault of their own.
First and foremost, the situations in which you can sue the at-fault driver for injuries from the accident are extremely limited. In fact, the only circumstance in which you can pursue a fault-based claim is if the other driver is convicted of a criminal driving offence (such as drunk driving) in connection with the accident.
Criminal cases can take years to move through the courts of British Columbia. From a practical standpoint, this virtually eliminates an injured victim’s ability to sue for damages related to an accident.
Some of the other serious problems with no-fault insurance include:
- Accident victims may be tied to ICBC for life. Under the previous system, reaching a settlement with ICBC enabled you to make decisions about your medical treatment and have the financial resources to pay for the care you need. Now, ICBC maintains long-term control over the benefits accident victims receive, resulting in a lopsided relationship that can last for months or even years.
- ICBC controls medical decisions. Medical treatments and therapies are subject to approval from ICBC agents. If your doctor recommends a certain course of treatment but ICBC refuses to cover it, you have minimal options for appealing the decision; claimants may be forced to pay for “unapproved” care out of their own pockets.
- No protection for those with pre-existing injuries and conditions. To qualify for no-fault accident benefits, your injuries must be caused by the collision. If you have an injury or condition that was aggravated by the crash, ICBC may deny you benefits. Accident victims with pre-existing conditions have no meaningful way to challenge such an adverse decision, potentially leaving them to handle medical expenses and other damages on their own.
- Disadvantages for those with catastrophic injuries. Under the no-fault scheme, ICBC will only provide additional benefits to accident victims who suffer permanent impairment as a result of a “catastrophic injury.” As of May 2021, the maximum compensation is capped at $264,430, and the definition of “catastrophic injuries” is subject to complex regulation that often overlooks the significant adverse impacts of a variety of serious injuries in auto accidents. For example, the following life-altering injuries only qualify for additional compensation if they meet the following criteria:
- Minimal protection for pedestrians and bicyclists. The likelihood of catastrophic injury is high in pedestrian accidents and bicycle accidents. Although cyclists and pedestrians have access to the same no-fault accident benefits as drivers and passengers, they are subject to the same caps and regulations that apply in claims involving catastrophic injury. Just like seriously injured motorists, then, compensation is limited for these highly vulnerable road users.
- Reduced recovery for damages. The stated goal of moving to a no-fault insurance scheme is to reduce costs. In effect, the government reduces costs by paying out less – they are restricting litigation involving motor vehicle accidents. By limiting options for tort claims, people injured by someone else’s negligence lose the opportunity to recover compensation for damages such as pain and suffering and loss of earning capacity.
- Inadequate income replacement. For those high-income earners (annual salary of $100,00 or more) who are rendered totally disabled, the income replacement offered under the new model will fail to replace their loss.
Another serious drawback of the no-fault insurance scheme is the effect on children who are injured in auto accidents. ICBC adjusters have wide latitude in determining what kind of job opportunities an injured child might have had and capping wage loss benefits in kind. High-achieving children who may have gone on to promising careers are effectively “stuck” with benefits that do not adequately replace the income they may have earned had the auto injury not prevented them from working.
Overall, ICBC adjusters wield enormous power under the no-fault system. Too many major decisions are left in the hands of agents who will be expected to save ICBC money at the expense of claimants. What’s worse, the change in policy leaves accident victims with little to no recourse to an independent judge or the courts to pursue fair compensation.
Have You Been Injured in an Accident in British Columbia?
In spite of the challenges accident victims face under the new no-fault insurance plan, it is still crucially important to contact a lawyer if you or a loved one has been in an accident. You should not have to face the aftermath of a crash alone, and Klein Lawyers is here to help.
Our team of lawyers has decades of experience helping clients navigate the complexities of ICBC claims. We have seen a number of changes in the auto insurance system of British Columbia during this time, and we remain committed to educating clients about their options and pursuing maximum compensation on behalf of those who have been injured.
Please call Klein Lawyers at (604) 874-7171 today for a FREE case review. Our ICBC lawyers serve clients in and around Vancouver, Surrey, Abbotsford, Burnaby, Coquitlam, Langley, and throughout British Columbia.