No-Fault Automobile Insurance

By Paul Mitchell, Q.C.
Categories: Personal Injury

You may not be aware ICBC is actively considering a no-fault automobile insurance scheme that will drastically reduce peoples rights and the rights of innocent accident victims. Essentially, no-fault automobile insurance would eliminate your right to sue for damages or compensation for injuries.

The proposed system would be similar to a Workers Compensation Board type of system and would force innocent accident victims to accept whatever ICBC offers.

Under this new scheme, your right to challenge that decision in court will be severely limited. Instead of having the ability to sue for compensation, the no-fault system would award certain benefits to a certain maximum and would be administered solely by claims adjusters who work for ICBC.

The proposed scheme is being put forth by ICBC as a proposed "solution" to rising premiums. However, in almost every province and American state where no-fault auto insurance has been tried, insurance premiums not only have not gone down, they have sky rocketed.

In Hawaii for instance, rates escalated 61% in just 3 years. Hawaii recently repealed its no-fault program. Ontario implemented a no-fault auto insurance scheme in the early 1990’s. That province has recently repealed the system and gone back to a tort based system similar to what we have in B.C. because the no-fault system was a disaster.

Another major problem with absolute no-fault insurance is that it removes personal responsibility for accidents. The driver who caused the accident will get the same benefits as the driver who was blameless. In no-fault jurisdictions this lack of personal responsibility has resulted in substantially increased accident rates. After a no-fault system was implemented in Quebec, there was a 26% increase in auto accidents and a 9.6% increase in fatal car accidents.

A complete no-fault insurance scheme also drastically reduces the compensation paid to innocent accident victims. Ontario’s no-fault system reduced benefits by an average of 48%. Those who suffer the worst hardships are women, children, students, seniors, union members, self-employed people and high income earners.

There is strong opposition against the ICBC proposed no-fault scheme by many interest groups throughout British Columbia. These include Unions, Mothers Against Drunk Drivers, the B.C. Construction Association, and Injured Rights groups such as the British Columbia Brain Injury Society and numerous other groups throughout British Columbia.

Total no-fault systems have been tried in many other places in the world and have been extremely unpopular and have, for the most part, been repealed. They have never delivered on the insurance companies’ promises and have, in virtually every case, resulted in increased premium costs and reduced benefits.

B.C. presently has a system that blends the best of both systems – some no-fault and some tort. We hope it stays that way. Stay tuned for interesting developments in this area in the next little while as ICBC tries to convince the B.C. Government that no-fault should be implemented.

This article is not legal advice and a lawyer should be consulted on any specific case.