GEARING UP FOR CHANGE
ICBC to tie rates to driver records
New drivers and serial crashers can expect to be among the onethird of B.C. drivers to feel the sting of proposed changes to auto insurance rates, as the province seeks to clean up a financial mess at ICBC.
Attorney General David Eby gave details Thursday of a plan to fix the Insurance Corp. of B.C. The government-monopoly insurer is on track to lose $1.3 billion this year because of more crashes and skyrocketing bodily injury claims costs, something Eby has called a “financial dumpster fire.”
Based on today’s annual insurance rates, about 39 per cent of drivers could get a reduction up to $50, 13 per cent between $50 and $100, and 15 per cent more than $100, the government said. Meantime, 11 per cent face increases up to $50, five per cent between $50 and $100, and 17 per cent more than $100. But ICBC is expected to seek a rate increase before the new system comes into effect in September 2019.
The proposed changes would move ICBC’s basic insurance to a “driver-based model,” where atfault crashes are tied to drivers rather than vehicle owners. New discounts would be given for new vehicles with manufacturer-installed automatic braking systems or which are driven less than 5,000 kilometres a year.
Eby said close to 35,000 British Columbians provided feedback during consideration of the proposed changes. He believes the changes will more fairly and accurately reflect the risk each driver presents on B.C.’s roads. He said the changes will be revenue neutral.
“ICBC’s current model for calculating basic insurance premiums is broken,” Eby said.
“The model B.C. uses to determine these premiums is more than 30 years old and it’s increasingly failed to ensure that drivers are held accountable for their driving habits and risk levels through their insurance rates.”
Eby said it doesn’t make sense that 80 per cent of drivers have the maximum basic discount of 43 per cent when they don’t all present the same risk. It means that a customer with the discount who has had three crashes in a year still gets the same basic premium as a crashfree driver. The changes require approval of the B.C. Utilities Commission. ICBC wants a three-year transition to the new premium system to avoid a high-risk driver facing a massive jump next year.
Insurance customers would have to list all drivers who may operate their vehicle. Then ICBC would weigh the experience and crash history of both the primary and non-primary drivers in calculating premiums. ICBC would consider all drivers’ at-fault crashes going back a decade when determining premiums, up from the current three years.
The government says inexperienced drivers will have existing premium discounts reduced to better reflect the risk they present. Premium increases earned by racking up penalty points, by getting traffic tickets, would increase by 20 per cent this fall and another 20 per cent in fall 2019.
And people who earn risk premiums for more serious offences, such as drunk driving and excessive speeding, will also face increases of 20 per cent this fall and another 20 per cent in fall 2019.
B.C. Liberal Leader Andrew Wilkinson called the proposed changes disappointing and said ICBC can only be fixed through a “total overhaul.”
He said Eby’s government should look at other jurisdictions for a better idea of how to lower insurance rates.
“All the attorney general has done today is lay blame at the foot of B.C. drivers, instead of overhauling the broken system,” Wilkinson said in a news release. “It’s time for a complete re-work of the auto insurance framework in B.C., and the NDP is not delivering.”
The B.C. NDP snapped back at Wilkinson in a news release, accusing his party of “secretly” creating the mess at ICBC. The NDP said the Liberals quietly took $1.2 billion in profits from the optional insurance side of ICBC’s business since 2010, leaving it more than $1 billion in deficit.
B.C. Green party Leader Andrew Weaver said he was pleased with the proposed changes.
“These are progressive changes that will ensure that those with clean driving records will be paying less, while people who cause crashes will generally be paying more,” Weaver said.
“These changes will align rates more closely with risk and the actual cost that drivers pose to the insurance system.”
These are progressive changes that ... will align rates more closely with risk.