November 30, 2017
Cascades Casino
20393 Fraser Highway
LANGLEY, BRITISH COLUMBIA V3A 7N2
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Mayfair Lakes Golf and Country Club
5460 No. 7 Road
Richmond, British Columbia

Total Losses

June 25, 2012
Divisions:bcarcrd

The issue:  In recent years, the number of vehicles deemed total losses by the Insurance Corporation of British Columbia (ICBC) has increased, with serious consequences for the consumer, the collision industry, and the economy. The term total loss refers to a situation where the total repairs caused by an accident exceed a vehicle’s value. In the past, ICBC would repair a vehicle up to approximate 75% of its undamaged market value, and the insured was given a choice as to whether they wanted their vehicle repaired or not. The collision repair shop also played a role, assisting the customer in deciding the best course of action.

This all changed in 2008, however, when ICBC revised a number of its procedures and corporate policies over total losses as a result of recommendations made by a third party audit. Today, ICBC deems vehicles a total loss at figures as low as 45% of the current market value. If the vehicle’s collision coverage is with ICBC, neither the customer nor the collision repair shop has a say in saving the vehicle from total loss status.

The impact: For some people, a vehicle is purely about get around; for others, it has sentimental value. Perhaps the vehicle they have is all they can afford, and maybe it runs great. Unfortunately, in many cases in which a vehicle is deemed a total loss by ICBC, the insurance payout won’t replace the vehicle the customer once valued. The insured is now in the predicament of trying to find a replacement vehicle as mechanically sound as their old one. Although vehicles lose value over the years, it can be difficult to find a replacement for the amount paid by the insurance company based on market value.

The increase of total losses has also affected the collision industry. There are approximately 4000 government-certified body and paint technicians (ATSO Study, 2005) employed in British Columbia. Over the last several years, there has been a gradual decline in the number of apprentices entering the trade due to the constant decline of work. The number of collision repair shops is also reportedly in decline. A healthy collision industry is an important part of the B.C. economy. The increase in total losses has not only affected consumer choice, but could potentially cost the province jobs due to the decline of this industry in B.C. as a whole.

ARA Position: In the interest of the public, the industry and the economy, the ARA believes that ICBC and the industry need to work together to find solutions to this important issue.

  • The Collision Repair Division (CRD) of the ARA is urging ICBC to work with industry to come up with a satisfactory solution to this important issue.
  • The ARA has formed a committee of industry professionals dedicated to working with ICBC on changes that will improve this scenario in the interests of the public and the industry.
  • The ARA has also sought the help of the Minister of Finance on this issue, since this ministry is in charge of this crown corporation.

For more information, please contact Keith Jones at keithjones@ara.bc.ca