We have implemented changes to some of our material (vehicle) damage policies to help reduce costs and better align with best practices.
The core changes being made are to the way we reimburse glass suppliers for windshield replacements and moulding. These changes will impact how much glass suppliers are able to mark-up windshields by bringing them more in line with industry standards. They will also mean ICBC will rightfully now only pay a glass moulding allowance when suppliers actually replace the moulding. These changes to glass pricing are long overdue and mean ICBC will no longer be overpaying for glass replacements.
ICBC payments for glass repair and replacements have increased by 140 per cent over the last decade, from approximately $40 million in 2008 to $96 million in 2017, fueled by an increase in both the number of claims being made and the average cost of those claims.
The changes were identified by government and ICBC to help reduce the pressures on auto insurance rates for customers and improve the long-term financial sustainability of ICBC. Collectively, these changes will help reduce our material damage costs by approximately $9 million per year – a move that will directly benefit British Columbians by easing the pressure on their rates.
The assertions that ICBC is asking shops to use a cheaper or inferior product and that this will cause delays to customers’ repairs is completely baseless. The process for ordering replacement windshields, and arranging appointments based on those orders, should not be impacted by the changes.
While the changes are focused on ensuring ICBC is paying the most competitive price – whether that be on aftermarket or original equipment parts – the updated glass policy will allow shops to ‘price match’, which means shops are allowed to match their aftermarket glass to the original equipment glass, as long as it is more cost effective. This allows shops to use aftermarket glass that they may already have in stock. Again, there is no reason that this should impact the wait time for customers.
We have also seen the statement made that ICBC has not increased its labour rates for glass suppliers for 20 years – this is also completely false. ICBC’s last labour rate increase for its top tier glass suppliers (Glass Express) occurred on January 1, 2016.
Of course, the rates ICBC pays suppliers have a direct impact on the insurance rates customers pay, so we have to balance those concerns while recognizing the need for fairness for industry partners. That’s why, for the first time in more than eight years, we have increased the allowances we pay suppliers for wheel alignment and alloy wheel repair, bringing them more in line with industry standard.
ICBC values its material damage partners and is committed to working with them closely to help improve efficiencies and ensure customers receive the highest standards of vehicle repairs at the best market value.
However, it’s no secret that ICBC is under enormous financial pressure from the rising number of crashes happening across B.C. – more than 900 per day – and the associated rising number of claims and costs. Action needs to be taken to address these pressures and that’s just what government and ICBC are doing.