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Minor Injury Cap in BC

Auto Insurance

By Viola Wallace | September 4, 2018

In February 2018 the BC governmentannounceda $5 500 cap on claims for minor injuries which occur as a result of road accidents. Not surprisingly this is proving to be very controversial topic. Not that such a move would be unusual – some Canadian provinces already have minor injury caps – some as low as $5 000 others as high as $7 500.

TheInsurance Bureau of Canada(IBC) projects that this cap will save an estimated $1 billion or more annually and BC’s insurance regulator says the cap will allow them to divert more funds to lost pay and physical rehabilitation. Insurance companies advocate for the protection of customers who have legitimate injury claims while looking for ways to reduce the multi-billion dollar insurance fraud problems significantly impacting insurance premiums in Canada. Motorists quite understandably are a little confused about the implications of these changes.

B.C.’s Minor Injury Cap Legislation

To fully understand the impact this potential cap might have one must first know the legal definition of “minor injury��? in B.C. and what other legislation would be included in this bill.

The current Minor Injury Guidelines (MIG) defines a “minor injury��? as: “A sprain strain whiplash associated disorder contusion abrasion laceration or subluxation and any clinically associated sequel.��?

There are concerns that the new updated legal definition of “minor injury��? would be more vague leaving out specifics currently outlined in the present definition thus leaving room for subjective definition of what is or is not a minor injury. In other words motorists may find that their injuries are minor or major depending on who they ask.

The new legislation proposes some other changes including:

  • Streamlining the dispute resolution process for claims under $50 000 to make them faster. At present it can take up to two or three years to resolve a dispute in B.C.; whereas the new claim resolution process could resolve a claim in as little as 90 days.
  • Regulating payable benefits for services provided to healthcare professionals.  To remain current and fair rates will be reviewed every five years.
  • Doubling medical care and recovery cost to $300 000 from the current $150 000.

Youcan read more here.

Will B.C.’s minor injury cap make a significant difference?

It depends who you ask. The ICBC is quite confident there will be significant changes. Both ICBC and insurance companies agree that the cap is a step in the right direction. Some insurance experts say the cap will help regulate medical costs because patients would recover faster since they would be treated immediately due to the streamlined dispute process. This is because cost of recovery tends to increase if medical conditions are not dealt with immediately.

What effect will B.C.’s minor injury cap have on premiums?

Industry executives admit that the cap may not lower insurance premiums.  Minor premium increases will continue as they have in the past. The projected increase in 2018 is around 8%.  This is the main reason the potential cap is so controversial as people wonder why the cap is necessary since it’s not going to lower insurance rates.

As with most legislative changes only time will really tell what effect this potential cap will have on B.C. If you’re unsure how this affects you and would like to get some clarity give your broker a call.

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