The Insurance Company of British Columbia’s (ICBC’s) most recent policy change affects the way glass suppliers are reimbursed for moulding and windshield replacements. The changes became effective June 4, 2018. Windshield replacement costs were a main factor in the change after data showed a 20 percent increase in vehicle damage claims from 2014 to 2017, according to ICBC.
ICBC is an insurance company that is regulated by the government (crown). It’s mandatory that all British Columbian drivers and motorists have basic coverage with ICBC to ensure every driver has coverage in the event of an accident.
“There are approximately 620 ICBC accredited collision repair shops and 500 glass repair shops across the province. Our payments to these suppliers to cover repairs for customers have grown dramatically over the years and some policies are outdated,” said an excerpt on the company’s website.
Glass repair and replacements have increased by 140 percent in the past ten years. The ICBC sap costs have skyrocketed from $40 million in 2008, to $96 million in 2017, which ICBC says supports its need to cut costs during windshield replacements. Both the number of claims and each claims cost make up the more than $50 million spike. “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,” said a statement released by ICBC.
The insurance company believes it has been over paying for auto glass work for years; changing the way various glass suppliers are paid will limit the increased prices they charge for windshields. “We made changes…to help reduce costs to better align with industry standards. Customers should see no impacts from these changes. The changes will reduce how much glass suppliers are able to mark-up windshields to bring them more in line with industry standards,” ICBC said. Going forward this means ICBC will only pay a glass moulding allowance when the moulding is replaced, according to the company’s statement.
Prior to ICBC’s decision, the Automotive Retailers Association urged businesses to come forward with their concerns. This was an effort to halt ICBC’s plans to move forward with its plan change. Last month they posted step by step instructions on its website for repair shop owners, in order for their messages to be heard.
Speculation flew about possible customer delays. This would involve a customer needing their windshield replaced waiting for longer periods because repair shops would have to spend more time searching for the best or most cost effective price under the new change. ICBC is maintaining there is no basis for this concern. “The assertion that ICBC is asking shops to use 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,” ICBC said.
Since the ICBC policy change aims to ensure the most competitive pricing, it actually allows repair shops to shop around for what they need in a different way. “-whether that be on aftermarket or original equipment parts – the updated 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,” The ICBC said in a statement.
Not all shop owners agree with the policy change and its effect on their customers overall wait time.
“Dealers can’t stock anything any more under the new policy. And now we’re required to buy materials based on price, so getting it from a dealer can take up to a week which is more of an inconvenience to our customers,” said Chris Newall, owner of Enterprise Glass.
