ICBC is being double billed for as much as $1 million annually, but fixing the problem, the auto insurer says, would cost more than the loss.
Top managers have known about the issue for at least a couple of years. It stems from the cost of paint matching – the process of mixing the right tints so that the repaired portion of the vehicle will be the same colour as the rest of the vehicle.
When the same vehicle racks up multiple claims, the fee for paint matching – at an estimated cost of $100 – is charged again, even though a record of the original paint match already exists.
The subsequent paint match fees are then charged to ICBC again, even though the job doesn’t need to be repeated.
An estimator with ICBC says the number of claims was 11,000 between September, 2009 and October, 2010 for a total cost of $1.1 million.
ICBC is now saying only 4,200 of those multiple claims were repaired at the same shop, the remainder would have required a second charge for paint match.
An ICBC spokesman also estimates the cost at $68 per match, or a total of $285,600 annually.
Those were the figures initially given an ICBC estimator who complained about the waste.
“I told them I was going to see the Auditor General as the facts they were supplying were wrong and I could prove they were wrong,” the complainant wrote in a letter to Harry Bains, the NDP MLA for Surrey-Newton. “ICBC reopened the file and finally agreed the overpayments were well above 11,000 claims a year and well over $1.1 million per year.”
Bains raised the issue in the Estimates Committee in Victoria on May 10 with the minister responsible for ICBC, Shirley Bond.
Bains said he’s been told by some people at ICBC that correcting the problem would be simple.
“They have suggested it can easily be done by either the ICBC estimators or the shop estimators,” Bains told Bond.
“But the management (at ICBC) has been instructing those estimators not to deduct the double payment. This is money that comes out of ICBC’s clients. The money should go towards reducing their rates.”
ICBC management, Bains said, is blaming the computer system, claiming there is no way to take out the double payment.
The computer system, known as ADXE, is used by most auto insurers, including ICBC. Reprogramming the system would be financially untenable, management says.
“We use an off-the shelf, industry standard, estimating program to account for repairs,” an ICBC spokesman told The Leader Wednesday. “There is no customized program available to eliminate this charge and implementing a manual check of every claim would far outweigh the cost of the charges.”
But in an email obtained by The Leader, one ICBC estimator said the money could be saved quickly – and without cost – to ICBC.
“There is a simple, easy, less-than-five-minute fix to remove the overpayments, if ICBC takes the time to train estimators,” the email states. “An easier fix would be to train the express shops to do it up front.”
Bond said she was aware the overbilling was occurring, but she disputed its frequency and the $1-million cost.
She said the total cost to the insurance company is about $200,000 annually.
“This is not an easy fix,” Bond told the committee. “The e-mails might indicate that it is; I’m being told it’s not that simple. What we’ve agreed to do is have Jon (Schubert, CEO of ICBC) go back and look at what, if anything, can be done.”
The discussion in the committee occurred the same week ICBC was considering increasing premiums for drivers with only one speeding ticket.
The auto insurer has since dropped that plan pending further public consultation.