The B.C. NDP has announced a number of changes to the province's public insurer that it estimates will reduce claims costs by more than $1 billion annually.

The changes were revealed amid troubling predictions that the Insurance Corporation of B.C. will lose $1.3 billion by the end of this fiscal year. Attorney General David Eby said without action, drivers in the province could face premium hikes of $400 or more.

"So we are acting," Eby said. "The reforms I'm announcing today are intended to make ICBC financially sustainable."

The first major changes, intended to take effect in April 2019, include a $5,500 cap on pain and suffering payouts for minor injury claims. Last year, the average payout for those claims was $16,499, which is more than three times what they were before the BC Liberals took over from the last NDP government in 2001.

B.C. is the last province in the country to impose a payout cap, according to the government.

Additionally, Eby said certain injury claims will be start being sent to an independent dispute resolution process, a move intended to decrease times and cut back on legal costs.

"Minor ICBC injury claims disputes will be directed to the Civil Resolution Tribunal to be decided quickly and affordably by independent adjudicators," he said.

The expected savings will allow the province to increase benefits for crash victims and still save a billion dollars a year, according to the government.

Eby said the province will be able to cover a greater variety of treatment services, and double the lifetime allowance for care and recovery costs for people catastrophically injured in car accidents up to $300,000.

Current accident benefits haven't increased since 1991, Eby said, and have become "grossly inadequate."

"There is no reason why someone who is seriously injured in a car accident should have to live with a disability in poverty, or not be able to access needed rehabilitation treatments because they can't afford to pay out of pocket to get better," he said.

"Without today's announced reforms, ICBC will never have the money to increase these miserly benefits without dramatic increases in insurance rates."

The NDP said it would like to implement the changes sooner than April 2019, given the insurer's dire financial situation, but there are too many details to work out and legislative changes required.

Newly elected BC Liberal leader Andrew Wilkinson called the announcement disappointing, and argued ICBC is in such poor shape the government should be re-examining the entire system.

"The goal is to serve motorists with reduced premiums and to get better compensation for victims, and they've accomplished neither of those things," Wilkinson said.

"It's a state-run monopoly and it's time to re-examine the whole thing."

But despite the insurer's massive losses, which the NDP has blamed squarely on years of mismanagement under the BC Liberals, Eby said privatization is strictly off the table.

"Intriguingly, the people that drove ICBC into the tree [are] now standing on the sidelines insisting that the fix should have happened sooner and suggesting that maybe we should sell the car," he said. "But with the damages done, we will repair ICBC, we will get it back on track."

Eby noted that Ontario, which is already under a private insurance system, pays the highest rates in Canada, and argued unaffordable premiums were the reason B.C.'s first NDP government created ICBC back in the 1970s.

"Many British Columbians were paying astronomical rates," Eby said. "I don't think privatization is the answer here."

Last year, shortly after taking over government, the NDP announced a 6.4 per cent hike to basic ICBC premiums. The changes amount to an extra $57 per year for the average driver with basic coverage and $130 a year for the average driver using blended coverage.

Given how long it will take to implement the new cap and dispute resolution system, Eby could not say definitively that rate payers won't be seeing another significant hike before ICBC's financial situation improves.

"My goal is to get rate increases down to inflationary increases and that is what these reforms are aimed at. There will be, I'm sure, additional increases because costs at ICBC are increasing," he said.

The government said it is also working on other measures aimed at fixing ICBC's finances, which will be rolled out over the coming weeks and months.