British Columbia is one of the three provinces in Canada that exclusively uses a public insurance system to regulate driving. Thus, when a trend or issue emerges, it can have an enormous effect on the entire industry.
That has been happening lately, as a spike in claims on minor automobile accidents has put the Insurance Corporation of British Columbia (ICBC) in a tough spot where it is considering a major sort of market intervention.
"We're looking at caps on minor pain and suffering awards, because there's been an explosion in the size of awards people receive for minor whiplash and minor injuries," said David Eby, B.C.'s attorney-general. "It's a very significant piece of the portfolio of reforms we're looking at."
There is lots of indication that such a move would prove successful. According to ICBC board chair Joy MacPhail, adding a cap on minor claims has worked for other provinces and states. Also, an outside report that specifically examined B.C. estimated that by putting a $4,000-$6,000 cap on pain and suffering for minor injuries, combined with a rearranging of the benefits payment system, the ICBC could potentially avoid rate hikes for the next five years.
For a system that has been in serious financial trouble for a while and projects to lose $364-million this current fiscal year, that would be quite the coup.