ICBC will be putting a cap of $5,500 for pain and suffering on minor injury claims, as part of a series of reforms by the provincial government to fix the financial crisis at the public auto insurance company.

The cap, scheduled to go into effect on April 1, 2019, will not apply to wage loss and medical care, or for legal costs.

ICBC says the average payout for pain and suffering for minor injuries was $16,500 in 2016.

In addition, ICBC will be doubling the overall limit that can be claimed for medical care and expenses, from $150,000 to $300,000, retroactive to Jan. 1. It will also increase injury benefits and allow certain claims to go through an independent dispute resolution process.

The suite of changes, which will be enacted through legislation in the coming months, is intended to drastically reduce the incentive to file legal claims against ICBC.

ICBC estimates the reforms will save the organization — which faces an estimated $1.3 billion deficit for this fiscal year — a billion dollars annually.

"These are substantial changes that will make enormous difference to British Columbians. It can only come about under a financially stable ICBC … and will only come as a result of reforms that will rein in out-of-control legal costs," said Attorney General David Eby.

"It will take all of us together to make sure the public insurer is working the public interest … for too long, ICBC has been neglected and mismanaged."

Last week, the provincial insurer posted a net loss of $935 million for the first nine months of the current fiscal year.

Eby described the situation as a "financial dumpster fire."

Benefit increases

Under the overall benefit cap increase from $150,000 to $300,000:

Maximum wage loss benefits offered by ICBC will increase from $300 per week to $740.

Homemaking benefits will increase from $145 to $280 a week.

Benefits for funerals will increase from $2,500 to $7,500.

Death benefits will increase from $17,580-$20,080 to $30,000.

The additional benefits — the first in 25 years, according to the government — will also be paid out by ICBC weekly instead of a lump sum, another move the government hopes reduces the incentive to sue.

Eby said the government will also begin to explore changes to rates, making higher-risk drivers with more infractions pay more and lower-risk drivers pay less.

The corporation said the "sizable and significant loss" proves it's under growing financial pressure, caused by a rapid increase in the number of collisions across the province as well as the rising costs of settling those claims.

What's a 'minor injury?'

The new cap does not include wage loss, medical care, or lawyer fees — and does not apply to major injuries, or if the effect of pain and suffering extends from minor injuries for over a year.

Eby says the government will be creating a definition for minor injuries, which will likely include sprains, aches and pains, mild whiplash, cuts and bruises, anxiety and stress.

Concussions, broken bones and other serious injuries will not be classified as "minor".

A medical professional, not ICBC, will determine the severity of injuries.

Eby acknowledged that the projections of saving a billion dollars annually through the reforms — and avoiding future rate hikes above inflation — are an estimate, and subject to how lawyers and injured drivers change their choices as a result of the new benefits and caps.

"What we want to do is provide British Columbians with a realistic assessment of what is possible," said Eby.

"The first job is to put out the dumpster fire, the second job will be to see where we're going in the future."