Big Changes in Auto Insurance

ICBC moves to new Enhanced Care format

BY GLENDA OUELLETTE, HUB INTERNATIONAL INSURANCE BROKERS

The past two years have seen many changes to the auto insurance landscape in British Columbia. These changes include ICBC’s requirement to list all drivers on a policy as well as how discounts are applied. We’ve also seen private insurers enter and exit the BC market.

This year will continue to see auto insurance companies looking at ways to remain profitable, while providing the coverage and services people need. Here are some of the changes you can expect to see in the coming months.

Introduction of Enhanced Care and rate decreases

As the largest auto insurer in British Columbia, ICBC sets the tone for how drivers insure their vehicles in the province. The cost of claims and settlements has risen rapidly over the last several years, leaving ICBC paying out more in claims than it draws in insurance premiums.

To reverse this trend, the BC government introduced several reforms which will come into effect in May, under the name of Enhanced Care. Enhanced Care is designed to save drivers money by limiting the ability to sue for compensation, except in Criminal Code offences.

What is changing?

Notable changes drivers can expect with Enhanced Care include: • average savings of 20 per cent or $400 annually; • up to $7.5 million in healthcare and recovery ($300,000 currently); • up to $1,200 per week in wage loss payments ($740 per week currently); • ongoing care costs paid as needed, instead of a single settlement for future care; and • reduced legal representation, ensuring 100 per cent of care benefits and compensation go to the driver.

What happens between now and May?

Drivers will continue to insure their vehicles under the current system until the end of April 2021. They will still have to list everyone who will drive their car on their ICBC policy, and their driving experience and crash history will largely determine their insurance costs.

Effective May 1, 2021, every policy in effect will automatically move to the Enhanced Care model, with most drivers receiving a pro-rated refund from ICBC reflecting the difference in pricing on what is remaining of their current policy. Private auto insurers are also adapting to address these changes, which will likely impact all auto insurance policies.

More details on these changes will be available once the regulations are made public by the BC government. Online renewals in 2022

ICBC has also announced that starting in May 2022, drivers will be able to renew their personal insurance and get temporary operation permits online. We can expect to learn more about how online transactions will work in the coming months.

The Role of the broker

At the dealership, customers purchasing vehicles should expect to have the new Enhanced Care changes explained to them by their broker, so they understand how their coverage will differ partway through the policy term.

Insurance brokers will receive extensive training between February and April of 2021. A strong insurance broker team will be able to support and advocate for its dealership partners and clients through these changes and provide excellent care and service during this time of large-scale auto insurance reform in British Columbia.

About HUB International

As the largest auto insurance broker in BC, HUB International puts its clients at the centre of a vast network of risk, insurance, employee benefits, retirement and wealth management specialists. It helps bring clarity to a changing world with tailored insurance solutions and unrelenting advocacy, so clients are prepared for tomorrow. Learn more at: https://www.hubinternational.com/enCA/offices/ca/british-columbia/