ICBC needs overhaul
Drivers in British Columbia now officially pay the highest auto insurance rates in Canada and it’s time that we overhauled ICBC to give B.C. motorists a choice.
The Insurance Corporation of British Columbia was launched in 1973 in the era of lava lamps and Pinto cars. Back then, All in the Family, Gunsmoke and Kojak were the best shows on our rabbit-eared TV sets and our governments ran things like telephone companies and coal mines.
Nowadays, B.C. drivers are facing a 30 per cent ICBC rate hike over the next two years. Some solutions for this massive rate hike being pitched by a government-initiated review include limiting injury payouts and re-introducing photo radar.
However, what was overlooked was the concept of letting British Columbians pick which company supplies their auto insurance coverage.
Numbers from the recent Ernst & Young report show that B.C. drivers now pay the highest rates in the country.
B.C. drivers paid an average of $1,550 per year for auto insurance through ICBC, and with the most recent rate hike that average cost will go up to $1,680 for the year 2017.
For comparison, in 2015, the average B.C. driver spent $1,316 on car insurance. In neighbouring Alberta, it was $1,179 and over in Quebec it was just $724 per year.
We don’t need to tow ICBC to the scrap yard in order to benefit from competition. The B.C. government could mutualize it and let policy holders become the owners of the company.
Why not fashion it after Mountain Equipment Co-Op (MEC) or VanCity? Both those companies are owned by their customers, yet they compete against other companies on price, selection and customer service – something ICBC often lacks.
Turning ICBC into a co-op that answers to its voluntary member customers would also pull the plug out of the government oil pan and eliminate the urge for politicians to dip into the ICBC reserve when it suits their budgets. If governments run businesses, they run the risk of fattening them or starving them based on the political needs of the day, rather than simply providing a service to people who use them.
The average driver in Quebec pays $724 per year while the average B.C. driver pays about double that per year. Quebec has a blended system of auto insurance, with private companies providing the bulk of the coverage based on a driver’s record and risk assessment while the government-administered portion covers bodily injury claims.
If B.C. had auto insurance costs similar to those in Quebec, that would mean about $50 in savings every single month for many British Columbians.
Those savings could go towards gassing up the car, paying for groceries or getting lots of movies on demand ... movies more modern than Roger Moore’s 1973 debut as James Bond.
We don’t have to let ICBC Live and Let Die we can make it a co-op, give it wings, and let it Live and Let Live with private competition.
Kris Sims is the B.C. director for the Canadian Taxpayers Federation.