ICBC has announced that it will be increasing the premiums that British Columbians pay for their auto insurance. ICBC, through its CEO John Shubert and another spokesperson, suggested three reasons for the rate hike. Firstly, ICBC’s investments have underperformed. Secondly, because of an increase in accidents. Finally, there’s the suggestion that increasing costs are due to an unexpected increase of the frequency of injury claims.
The poor performance of global markets means it’s understandable that ICBC’s investments have underperformed. You would think an organization so well-versed in risk might have more of a cushion to rely on, but the global financial crisis has taken many by surprise. As a crown corporation ICBC pays “dividends” to the provincial government. One might argue that in recent years the province has been so intent on revenue raising through ICBC that the insurer is effectively hamstrung to respond in these situations. Some suggest it’s simply a means of revenue raising for the provincial government and that ICBC’s mandatory dividend has effectively cut its throat and limited its ability to respond to circumstances with any self-determination. Thanks to the tough impaired driving laws in BC we have seen deaths and accidents due to impaired driving decrease significantly.
So who to blame for the rate hike?
Well, trial lawyers and personal injury claims are the next cab off the rank. Forget the fact that litigation in Canada is very different to litigation in the United States. There are no hot coffee settlements in the hundreds of millions here. And the reality is this: through precedent, we have an idea of what a claim is worth. If ICBC made fair settlement offers, the need for lawyers to seek justice on behalf of their clients would be minimized. There’s a direct correlation between the quality of ICBC’s settlement offers and the “unexpected increase” in the frequency of injury claims ICBC is experiencing. With some fair offers, ICBC might even save some money on what it pays defense counsel too…
Yours in the pursuit of Justice,