Turn ICBC into driver-owned co-operative
This would cut costs, provide choice,
The Insurance Corp. of B.C. was launched in 1973 in the era of lava lamps and shag carpeting. 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 phone companies and coal mines.
Today, millions of Canadians in other provinces don’t have their government run an autoinsurance company. Those drivers get to pick their own car insurance, and they benefit from the healthy competition of dozens of competing companies. Before 1973, B.C. had 183 companies jockeying to sell basic auto insurance. Yet today, British Columbians have no such choice.
Making matters worse, B.C. drivers are facing a 30 per cent ICBC rate hike over the next two years. Some solutions for this massive increase being pitched by a government-initiated review include limiting injury payouts and reintroducing photo radar.
However, what was overlooked was the concept of letting British Columbians pick which company supplies their auto insurance coverage.
Recent numbers show that B.C. drivers fork out some of the highest rates for auto insurance in the country, second only to Ontario.
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.
Moreover, we don’t need to tow ICBC to the scrapyard to benefit from competition. The provincial government could mutualize it and let policyholders become the owners of the company.
Why not fashion it after Mountain Equipment Co-op or Vancity? Both of those firms are owned by their customers, yet they compete against other companies on price, selection and customer service, something ICBC often lacks.
In a newly released report, author Mark Milke explains: “So long as it involves full competition from the private sector — Vancity and MEC both face competition from non-coop businesses — (a mutualized ICBC) would increase choice, service and price possibilities for consumers. It might also be the most politically attractive option: It combines the usefulness of competition with a co-operative model already known by many British Columbians.”
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 it or starving them based on the political needs of the day, rather than simply providing a service to people who use them.
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 nearly $50 in savings every single month for many British Columbians. Those savings could go toward 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.
If B.C. had auto insurance costs similar to those in Quebec, that would mean nearly $50 in savings every single month for many British Columbians.