A 14 percent increase in ICBC's discount on windshield replacements could spell disaster for auto repair businesses. For some businesses, the 14 percent increase translate to roughly $150,000 in revenue loss depending on the workload. Automotive Retailers Association president Ken McCormack said he has taken the issue directly to Premier John Horgan and Attorney General David Eby, both of which have made their main focus to reduce accident claim costs at ICBC. The association is also lobbying individual MLAs to change legislation. The association claims glass shops are not the problem since there has been no significant increase in their windshield replacement costs for the last two decades.
It is estimated that ICBC business accounts for roughly 60 to 70 percent of a glass shop's business. While glass repairs only account for only 8.5 percent of ICBC's vehicle repair costs. ICBC retaliated with a statement calling the 20 year freeze on rates "completely false. ICBC's last labor rate increase for its top tier glass suppliers (Glass Express) occurred on Jan. 1, 2016." Other ICBC mandated cost-saving changes is the requirement to use the cheapest windshields available. McCormack says that will mean ordering from a dealership which might translate into days of delay, rather than using aftermarket windshields that are in stock which is the common practice used today.
ICBC says payments for glass repair and replacements have increased by 140 percent over the last decade, from $40 million in 2008 to $96 million in 2017 citing both the number of claims and their average costs have both increased. McCormack says the moulding replacement policy was imposed on repair shops by ICBC to save administration costs. "They are suggesting the industry is doing something wrong by charging for new moudlings whether or not they are installed," McCormack said. "But this is something ICBC put in place a decade ago because it wouldn't or couldn't discuss rate increases." ICBC has already raised basic insurance rates by 6.4 percent. The government has also moved to cap soft tissue injury payouts and targeted body shop costs that ICBC claims to have risen 30 percent in the past two years alone.