May 4, 2021
ICBC No-Fault Insurance Model Comes Into Effect – May 4, 2021
ICBC No-Fault Insurance Model Comes Into Effect
A Summary of ICBC’s Care-Based Insurance Model: New Benefits and Coverage Limits
On May 1, 2021, the BC government’s proposed “care-based insurance model”, came into effect by the passing of several regulations to the Insurance (Vehicle) Act, including the Enhanced Accident Benefits Regulation (the “BC Reg 59/2021”).
The new model effectively removes the right to sue the at-fault tortfeasor for damages. Coinciding with this change are increased limits to medical, rehabilitation, and income replacement benefits as well as new benefits for non-earners, caregivers, and claimants who suffer non-catastrophic or catastrophic injuries.
A brief summary of the new benefits and coverage limits are as follows:
- Medical and Rehabilitation Benefits – up to $7.5 million from $300,000. The Med Rehab sublimit includes:
- Personal care (non-catastrophic) – $5,033 per month
- Personal care (catastrophic) – $6,018 per month
- Personal care (requiring 24 hour assistance) – $10,000 per month
- Catastrophic Injuries – extended benefits up to $1,229,910 and permanent impairment compensation of $264,430.
- Non-catastrophic – a complicated formula where the insured’s permanent impairment rating (PIR) is multiplied by $167,465.
- Income Replacement Benefits – 90% of the insured’s net income, of which $100,000 is insurable. This works out to be approximately $1,200 per week, up from $740 per week previously.
- Non-Earners – Calculated on gross yearly employment income (GYEI) the insured would have earned within 180 days of the accident. If the insured was unemployed and was not receiving EI benefits, ICBC determines the category of employment that is “normally available” after 180 days have passed.
- Caregiver benefit – $584 to $719 per week for a full time caregiver. A full time or temporary earner may receive $266 per week if unable to care for a child under 16 years old.
- Family Business (first 180 days) – $837 per week.
- Students – loss-of-studies benefit of either loss of tuition fees, $10,550 for each secondary school year, or $10,550 for each post-secondary term.
Medical and Rehabilitation Expenses
As with any statutory accident benefits model, the details of its wording inform the scope of coverage.
An insured who sustains injuries caused by the use or operation of a vehicle is entitled to a maximum of $7,500,000 in Medical and Rehabilitation expenses.
Any incurred health care service expenses have to be reasonable and necessary. The Regulation sets out the types of permitted health care services such as Chiropractic and Counselling and the number of pre-authorized treatments for each service (12 sessions of Massage therapy, 25 sessions of Physiotherapy).
An insured who sustains a catastrophic injury receives a permanent impairment compensation of, at the time of this article, $264,430. A non-catastrophic insured receives compensation using a rather complicated formula which takes into account the nature of the injury (ie. wrist and hand), a percentage that corresponds to its type and severity, and whether an enhancement component is applied.
An insured who is unable to resume their pre-accident activities of daily living can receive reimbursement comparable to the attendant care benefits in other jurisdictions. The amount of benefits is calculated according to another complicated weighted score depending on the severity of injury and level of impairment.
Income Replacement Benefits
Under the Income Replacement and Retirement Benefits and Benefits for Students and Minors Regulation (the “IRRB-BSMR”), entitlement to Income Replacement Benefits (IRB) is equal to 90% of the insured’s net income of which, at the time of this article, $100,000 is insurable.
The IRRB-BSMR also sets out the methods on how to calculate IRBs for temporary earners, part-time earners, non-earners before and after 180 days following the accident. Where an insured is self-employed or not employed, gross yearly employment income (GYEI) may be calculated with reference to Table 1 of the IRRB-BSMR. For example, a Chef with less than 36 months (Level 1) experience is attributed with a GYEI of $30,517, whereas a Level 1 Cook is attributed with a GYEI of $24,643.
The limitation period for making a claim is the later of 2 years from the date of the accident or where injury symptoms were not apparent and later observed by an authorized health care provider.
Previously, the Civil Resolution Tribunal (CRT) exercised jurisdiction over certain motor vehicle accident disputes, including whether an injury is “minor” and liability and damages for claims up to $50,000.
However, the BC Supreme Court in Trial Lawyers Association of British Columbia v. British Columbia (Attorney General), recently ruled that those provisions allowed the CRT to essentially operate as a Court and are unconstitutional. As of the date of this article, the TLABC decision has been stayed pending the Attorney General’s appeal.
If the Attorney General is not successful in its appeal, those disputes previously determined by the CRT will fall back to the BC Superior Court, a Court of inherent jurisdiction.
An unsatisfied insured claimant can also escalate the adjusting of its claim with an ICBC supervisor/claims manager, the ICBC Fairness Office, or the BC Ombudsperson. As the Fairness Office and Ombudsperson can only issue recommendations, most issues will end by either the claimant adopting ICBC’s decision or accessing the Court system.
Subrogation and Other Deductible Amounts
ICBC continues to have a statutory right under s 84(1) of the IVA to bring an action in its own name to recover benefits paid under its policy with the insured. ICBC also maintains the right to not pay benefits where “other compensation” such as Workers Compensation, and CPP disability benefits and employment plans and benefits are available.
Take Away for Out-of-Province Insurers
The Province of British Columbia has effectively uprooted the previous Auto Insurance Regime and replaced it with a comprehensive and more detailed no-fault regime.
The new “care-based insurance model” brings with it its own challenges, including the introduction of rather complicated formulas for calculating benefits for activities of daily living (attendant care) and benefits for non-catastrophic claimants. Furthermore, where supporting income documentation is insufficient or where the insured was not working at the time of the accident, ICBC determines the appropriate class of employment by using a NOC Code classification table.
We anticipate that disputes involving the application of these formulas and ICBC’s determination of the insured’s employment are areas where future litigation may arise.
Insurers should be aware of how to determine entitlement and the calculation of accident benefits under the new care-based insurance model to avoid and minimize exposure.