With the Insurance Corporation of British Columbia expecting an $800 million loss this fiscal year, provincial officials have taken steps to cut costs. Reforms have targeted injury claims costs. These expenses represent about two-thirds of ICBC spending, and payments for vehicle damage make up the rest. Vehicle damage expenses have jumped by 50 percent during the last five years and prompted calls for ICBC to improve its management of this expense category.

Growing use of Express Repair Shops and the frequent automation of approval and payments appear to be contributing to increases in damage expenses. Ten years ago, only about 25 percent of people went to ICBC-certified shops, but now Express Repair Shops handle over 70 percent of accident claims.

These body shops have an established relationship with ICBC and send their repair estimates to the insurer for review. The two-hour rule of acceptance, however, allows a substantial portion of claims to receive approval without oversight. The rule insists that businesses get a response from ICBC within two hours, or they can treat the estimate as approved and start repairs.

ICBC has not offered official figures about how many claims go forward under this rule, but it is estimated that nearly 2,000 estimates enter the system every day. Roughly one-third of them advance automatically because of the two-hour rule. ICBC’s manager of claims, stakeholder relations, said that auditors review samples of automatic claims to confirm body shops are meeting their requirements for certification.

In 2017, ICBC fully audited 78 Express Repair Shops. Every audit detected some unacceptable activity, but the organization only described a portion of problems as serious. Only one shop ended up removed from the program, and 19 others lost their ability to receive automatic approvals.

Over 500 auto body shops in the province possess certification from ICBC to perform insurance repairs. Level one shops can make repairs under $1,500 without approval, and level two shops can proceed without approval on repairs up to $2,500.

ICBC plans to improve its system so that more expensive claims stop slipping through with the two-hour rule. The manager of claims, stakeholder relations, said more estimators would be hired to handle increasing numbers of claims. Rising rates of car crashes are also contributing to bigger case loads and insurance expenses.