ICBC hit with $900M proposed class action lawsuit

Court filing alleges B.C. drivers have been over-charged for insurance, accident victims under-compensated

Eric Rankin · CBC News ·

A proposed class action lawsuit has been filed in B.C. Supreme court which, if successful, could mean every provincially-insured driver and injured crash victim in British Columbia will be in line for a share of almost $1 billion.

The civil action, launched against the B.C. government and the Insurance Corporation of B.C. (ICBC), packs a one-two punch.

It alleges a secret agreement has allowed the B.C. government to skim hundreds of millions of dollars from ICBC to pay doctors’ fees for injury victims — instead of billing the province’s taxpayer-funded Medical Services Plan.

And the lawsuit claims the claw-back by the province of up to $60 million a year from ICBC has driven-up the public insurer’s annual operating costs — contributing to rising driver insurance premiums and lower injury pay-outs to crash victims.

The accusations come after revelations the previous B.C. Liberal government raided the insurance corporation’s surpluses to fill provincial coffers— something Attorney General David Eby has promised to end, declaring the practice “treated ICBC like an ATM.”

The proposed class action claims the newly revealed medical drain on the Insurance Corporation also “raided ICBC’s budget”— taking medical fees from the insurance corporation, which passed the cost to drivers and injury victims.

It alleges the “unlawful scheme” has been used by every provincial government since the creation of the public insurer in 1973 — including Eby’s NDP.

The action seeks to recover an estimated $899,724,536, plus damages and interest.

‘You can’t trust them’: Brayden Methot

The lawsuit has been filed by the prominent Murphy Battista law firm on behalf of two types of plaintiffs: the “ratepayer class,” representing all insured drivers, and the “accident class,” representing injury victims.

Brayden Methot, 29, is the lead plaintiff for those severely hurt in crashes.

He says the civil action sends a message to the provincial government and the public auto insurer.

“Thanks for ripping me off,” he says.

Methot was rendered a quadriplegic in a roll-over crash near Kamloops in 2014 and has struggled to survive on the $1,300 a month he receives in benefits.

He lives in Williams Lake with his parents.

Methot was awarded $160,000 for his injuries, but believes doctors fees were deducted.

The lawsuit alleges “ICBC wrongfully represented to [accident victims] they had reached the limit of their accident benefits, when they had not.”

“I thought you could trust ICBC to look after these things while I [was] in the hospital,” says Methot. “I’m already overwhelmed with the injury. And knowing that they take advantage of somebody that’s in my situation … you can’t trust them for sure.”

‘I want my money back’: Bob Rorison

Bob Rorison, 70, is the second lead plaintiff, and represents all B.C. motorists who have paid compulsory auto insurance through ICBC.

“I want my money back,” says Rorison. “And everybody in British Columbia deserves their money back if they purchased insurance from ICBC.”

READ MORE HERE: 

 

 

Insurers warn federal government Canada can’t wait a decade to update flood maps

DYK: Most maps are, on average, 20 to 25 years out of date

CBC News 

Canada plans to focus its next budget on tackling climate change and its effects, but the insurance industry, amid skyrocketing costs, is concerned the government will move too slowly on the key first step of mapping flood risks.

Flood mapping is used to underwrite flood insurance, assess bank exposure across mortgage portfolios, inform home buyers, and plan new infrastructure. Prime Minister Justin Trudeau pledged sweeping climate action during his re-election campaign last year, including $150 million  for flood mapping. The federal budget is expected at the end of March.

“Flooding is by far the single greatest peril facing Canadians as a result of climate change,” Craig Stewart, vice president of federal affairs for the Insurance Bureau of Canada, told Reuters.

Stewart said the natural resources ministry is proposing doing the mapping itself with the focus only on fluvial — river and lake — flooding, in a process that would take 10 years.

The natural resources and finance ministries both declined to say whether such a measure would be in the budget.

“We can’t take a decade to complete flood maps for this country, and we need to make sure we’re mapping urban and coastal flooding as well,” Stewart said. He estimates it could be done within three years if the government collaborates with the private sector.

Out of date

A government source said the approach it will take on mapping has yet to be decided.

Current mapping is on average 20 to 25 years out of date, said Blair Feltmate, head of the University of Waterloo’s Intact Centre on Climate Adaptation Faculty of Environment.

Insurers spent $1.9 billion annually, on average, between 2009 and 2019 on catastrophic flooding claims, compared with an average of $422 million per year in the 1983–2008 period, according to Insurance Bureau data. The four-fold increase was driven mostly by flood loss and the majority of claims were residential.

Last year, a government-commissioned panel on sustainable finance also recommended a public-private partnership for the mapping.

A member of the expert panel, Tiff Macklem, the dean of Toronto’s Rotman School of Management and a former Bank of Canada senior deputy governor, said flood mapping is “an immediate priority.”

“The Expert Panel envisaged a model where the private sector would pay a membership fee,” Macklem said. “This type of model … would be both less expensive and provide higher-quality data.”

Source: CBC News

Daylight time goes into effect and the clocks “spring ahead” by one hour on Sunday, March 8,

Last fall, B.C.’s provincial government introduced legislation to scrap the seasonal adjustment, but also made it clear B.C. wanted to stay in tune with Washington, Oregon and California.

Those states need approval of the U.S. Congress to stay with daylight time year-round, and that’s appearing unlikely to happen given that it is a U.S. election year and the U.S. House of Representatives has other priorities.

But Premier John Horgan hinted Wednesday that B.C. might go it alone because there was an overwhelming public demand to stick with daylight time year-round, leaving the U.S. West Coast to catch up later.

“In our consultation there was a desire, a majority, that we work in lockstep with our neighbours to the south, but we’re not bound by that,” he said Wednesday. “I’m going to engage what people have to say about it.”

For now, the B.C. plan for November is to follow its trading partners down the coast back to standard time, for at least one more year.

“We also heard from British Columbians that they felt that having the same time zone as our current neighbours — Washington state, Oregon and California — was the best way to go,” he said in the legislature last week.

Washington and Oregon have already committed to year-round daylight time, and a majority of Californian voters support the move, but now that move does not appear imminent.

“It’s fairly apparent as we’re into the height of election 2020 in the United States that Congress is not likely to approve the legislation that has been passed by Washington and Oregon,” Horgan said Wednesday.

A 2007 public consultation found that only 10 per cent of British Columbians wanted to end the longstanding annual time changes. But a 2019 public consultation saw 93 per cent of respondents support daylight time in perpetuity.

—With files from The Canadian Press

Seniors, disabled will be impacted as insurance crisis takes up to 1000 taxis off the road

Seniors, disabled will be impacted as insurance crisis takes up to 1000 taxis off the road

Senior citizens and others who rely upon Accessible taxis are at risk of losing this service as Ontario’s taxi industry is facing a crisis in insurance coverage.

“The number of taxi cabs which are being parked and taken completely out of service is horrendous,” says Marc Andre Way, President of the Canadian Taxi Association (CTA).

“In Hamilton alone, City Council members have been notified by licensing staff that 25 per cent of licensed taxis are now parked because they cannot obtain insurance. Communities across Ontario are facing dire circumstances on account of this insurance crisis.”

Toronto’s Licensing division reports that already 719 licenses have been returned to them. The number of “parked” cabs could climb to as many as 1,000 or more in the weeks ahead as insurance renewals are denied.

This crisis means that riders who require Accessible Taxis for medical appointments and other travel may soon be unable to receive on-demand Accessible taxi service; even standard, non-Accessible taxis may be unavailable.

The CTA, working with Philomena Comerford of Baird MacGregor Insurance Brokers who are experts in the taxi insurance field, have proposed at least a partial solution to this crisis: they are asking Ontario to amend Regulation 664 to allow Loss Transfer for taxis as is allowed for other vehicles.

“Amending Regulation 664 will not cost the province any money and does not require legislation, it is a simple regulation change which will encourage insurers to stay in the taxi market,” says Way.

“We suggested this idea during Ontario’s Pre-Budget consultations, although in fact, the change could be made at any time. We hope Ontario will consider amending Regulation 664 as at least a partial solution to the taxi industry insurance crisis before it begins to have a serious negative impact on senior citizens and those who require accessible taxis.”

The CTA works with its members across Canada to:

  • improve service standards by sharing information with each other including best practices from proven operators in certain aspects of their business model.
  • introduce new technology or new services to make their businesses more competitive.
  • provide access to suppliers that can reduce operating costs.
  • deliver consistent customer service across the nation regardless of city or locale.

SOURCE Canadian Taxi Association

Related Links

www.cantaxi.ca/

What the virus outbreak means for home loans, mortgage rates

By Hal M. Bundrick, Cfp, And Holden Lewis Of Nerdwallet

THE ASSOCIATED PRESS

The Federal Reserve cut short-term interest rates by half a percentage point on Tuesday in an effort to protect the economy from more damage from the virus outbreak. The move may present options for mortgage shoppers.

What does all this mean for home buyers? Or those looking to lock in a mortgage rate? For owners considering a refinance? And for those holding an adjustable-rate mortgage?

WHY THE FED CUT INTEREST RATES

Mortgage rates started falling weeks before the Fed’s emergency rate cut. By reducing the federal funds rate, the Fed is playing catch-up, following the lead of the market forces that set mortgage rates.

The novel coronavirus identified in late 2019 has been of increasing concern to the world’s stock and bond markets. The distress stems from uncertainty about how the officially named COVID-19 outbreak will impact manufacturing, tourism, travel, the hospitality industry and even consumer spending.

“Lower rates are likely to drive refinances higher and may entice home buyers out to shop as well. That’s certainly the Fed’s hope,” says Danielle Hale, chief economist for Realtor.com. “However, if buyers are hesitant to go shopping because they want to avoid contact with others, this could dampen home sales.”

THE IMPACT ON MORTGAGE RATES

The Federal Reserve manages the interest rates used by banks to borrow from each other. It’s a foundation for how longer-term interest rates move.

While mortgage rates are not directly affected by Fed rate decisions, they can’t resist the general direction of the bond market. Lenders use the 10-year Treasury as a guide to pricing loans, and the yields have reached record lows.

Mortgage rates are likely to follow, at least in the near-term. The 30-year loan is already approaching _ and at times sinking below _ the all-time low of 3.31% (with 0.70 discount points) reported by Freddie Mac on Nov. 21, 2012.

The news is also good for those with or shopping for adjustable-rate mortgages and home equity lines of credit, which are directly guided by Fed rate cuts. ARMs will likely see lower rates at their next reset period, and HELOCs could fall half a percentage point in the next billing cycle or two.

WHAT TO KNOW IF YOU’RE:

BUYING A HOME

If you’re in the market to buy a home, you probably face competition from other buyers because there aren’t enough homes for sale to meet demand.

There’s only so much that lower mortgage rates can do to stimulate home sales. Mortgage rates and affordability aren’t the biggest challenges in today’s housing market, Hale says. “A lack of options continues to be the largest hurdle,” she says.

Here are tactics that make you more likely to prevail in a hot housing market:

_ Get a mortgage preapproval. A preapproval letter gives sellers confidence that you’ll be able to get a loan and that the sale will go through.

_ Limit contingencies, such as requesting that the seller make repairs or pay your closing costs.

_ Let the seller know that you can be flexible about the closing date if that’s possible.

If the fear of COVID-19 makes you reluctant to tour homes but you’re committed to buying this year, “now is the time to strike,” says Daryl Fairweather, chief economist for Redfin, an online real estate broker. “People who commit now are going to have an advantage over people who wait.”

REFINANCING

Plenty of homeowners are refinancing now. Lenders are enduring heavy workloads. You can do your part to lighten the load by submitting a complete application, with all the necessary documentation. Online applications usually will let you know if you haven’t provided all the necessary documents.

Other tips:

_ Know why you’re refinancing so you can get the right loan. It might be to get a lower monthly payment, to shorten the loan term, replace your adjustable-rate mortgage with a low fixed-rate loan, to borrow more than you owe in a cash-out refinance, or to get rid of FHA mortgage insurance.

_ Shop more than one lender. You’re more likely to land the best possible deal if you apply with multiple lenders. Each lender will give you a disclosure document called a Loan Estimate. By comparing Loan Estimates, you’ll be able to identify the best offer.

_ Lock your rate for long enough. During normal times, a 30- or 45-day rate lock for a refinance is sufficient to close the loan on time. But when so many homeowners are refinancing at once, it might behoove you to get a longer rate lock. Ask your loan officer for guidance.

Be careful of getting a cash-out refinance. “It might be tempting to take cash out, but especially if you’re worried about a recession in the future, or your job security, it might not be the best idea,” Fairweather says. You want to have a cushion, instead of taking out all your equity, she says.

Hot topic! Should London’s fire department tap home insurance policy money?

Backers say Fire Marque program can offset costs, but one firefighter isn’t in favour

The excerpted article was written by Andrew Lupton · CBC News 

To its backers, Fire Marque’s business model helps municipal fire departments recover thousands in costs by tapping into a little-used area of coverage in many homeowner fire insurance policies.

But others say their work will lead to higher premiums for homeowners or worse, make them less likely to call for help in an emergency.

It’s a discussion underway in London after council’s community and protective services committee (CAPS) voted last month to take a look at the Fire Marque program for London. After hearing a pitch from the company at a recent Federation of Canadian Municipalities conference, Coun. Elizabeth Peloza wrote a letter to CAPS asking them to look into it and report back.

Peloza says Fire Marque could lead to “potential cost recoveries of opportunities” of between $291,461 to $485,769 a year.

But in a letter coming to Monday’s council meeting, London Fire district chief Kevin Dash says he’s “deeply concerned” about entering into any fee recovery agreement.

“When it comes to life safety, fees for service would have a profound negative effect on Londoners, some of whom may delay calling for help when seconds count,” he said.

So what is Fire Marque?

The company enters into agreements with municipalities that allow them to access clauses in home insurance policies that include reimbursement for fire departments that incur extra costs while battling a blaze. Fire Marque pockets 30 per cent of any claim paid to a fire department.

Fire Marque president Ted Woods said the claims can vary by policy, but said he’s seen fire departments collect anywhere from $1,000 per claim up to $250,000 for large commercial fires.

“It can really make sense,” said Woods. “If Londoners can receive a quarter of a million dollars or in that range every year, then every four years they could receive two fire trucks, if you want to look at it that way.”

The claims for this coverage can only be paid to the fire department, not the home owner or the municipality. Also, the money has to be spent in one of three areas: public education, capital expenses and training. The money can’t simply be absorbed into the fire department’s general budget.

“They’re for expenses that aren’t normal,” said Woods.

Woods said Fire Marque offers a potential benefit for cash-strapped municipalities without any risk to taxpayers. If a claim is successful, the fire department gets a cheque.

London city staff last looked at entering an agreement with Fire Marque in 2016, but opted against it.

Greg Hankkio is Thunder Bay’s acting fire chief.

His fire department became a Fire Marque client in 2017 and says they collected $100,000 in claims in 2018 and about the same amount in 2019.

“It’s been a revenue generator for us,” he said.

Hankkio said his department has put the money into a capital fund and used some of the cash to by a small boat for water rescues.

But won’t premiums rise?

Woods says he doesn’t think his company’s work will lead to a rise in home insurance premiums.

“The insurance companies have calculated the premiums based on the coverages,” he said. “A quarter of a million dollars in recoveries across all the companies and across the whole city is negligible.”

Not so fast says Pete Karageorgos of the Insurance Bureau of Canada.

He says it’s naive to think that a rise in claims won’t also increase premiums.

“Any time claims costs increase, that will in the future be reflected in the premiums that homeowners pay,” he said. “Those taxpayers who are paying property taxes for the fire department are going to be paying a second time if they have claims pay outs for fire department charges.”

But what about Dash’s letter, where he worries homeowners may become reluctant to call 911 in an emergency, fearing their premiums will rise or they’ll be hit with extra costs?

Woods says it appears Dash doesn’t understand how Fire Marque’s program works.

“He’s misinformed,” said Woods.

In a note to CBC News, London’s Police Chief Lori Hamer said Dash’s letter to city council “reflects his own personal opinion on this matter.”

Hamer said her department is reviewing the Fire Marque program in response to the request from the CAPS committee.

“We will be reviewing this request and will bring information back to Council for their consideration by June, 2020,” she said.

Source: CBC News

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