Starting in September 2019, auto insurance premiums will be rising for all B.C. drivers. That’s not what the NDP said last week.

As of September 2019, every driver in B.C. will see their auto insurance costs increase

The New Democrats continued the far-reaching transformation of auto insurance Wednesday, seeking approval from the B.C. Utilities Commission for higher rates for higher-risk drivers in higher risk places, plus relief for others, at least in the short term.

The application itself runs to more than 400 pages, including a 300-page cabinet order, underscoring the challenge of calculating the effects of the changes on individual drivers.

Some things did stand out from an initial reading of the new framework, which was released by ICBC and posted on the BCUC website Wednesday afternoon.

The reworking of the way ICBC calculates territorial risks (where you live and drive) will mean higher premiums in the Lower Mainland and southern Vancouver Island, reductions for all other parts of the province, with the Peace, the Cariboo and the North Coast being the biggest winners.

Likewise the decision to revisit rate classes (how you use the vehicle) will mean a steady escalation for those with daily commutes longer than 15 kilometres and vehicles registered for pleasure or business use.

There will be some relief in the calculation for motorhomes, commercial use and shorter commutes.

The shifts are spread over 10 years to minimize impact. Over that span, the geographical contribution to setting rates will be increased by almost 11 per cent for Lower Mainlanders and reduced by more than 50 per cent for those driving in the Peace River Country.

The upward shift in the calculation for business or pleasure use is about four per cent over the 10 years.

Keep in mind that territorial risks and class of use are only two factors in calculating overall premiums. Other upward shifts will affect inexperienced drivers, newcomers to B.C., and insurance for additional drivers on a given vehicle. In an example provided by ICBC, even one additional driver could boost premiums by $135 or 12 per cent a year.

While the New Democrats have cast these changes as revenue neutral overall, the promise applies only for the first year under the new framework starting Sept. 1, 2019.

The cabinet did put a cap on the overall impact of the framework for any given driver, saying no one “is to see more than a 20 per cent increase compared to his or her prior year’s premium.”

But even that hefty amount of leeway comes with exemptions: it does not include changes in rate class, territory, learner’s premiums and/or coverage for additional drivers who have a crash after Sept. 1, 2019.

The commission is asked to review and approve these changes by the end of next month, and given constraints imposed by the cabinet, there is every reason to assume it will do so.

Then comes the next phase of the makeover.

The changes in rate design are not intended to make up for the sizable operating losses inherited from the B.C. Liberals. ICBC will start addressing that challenge with a second filing to the BCUC in December, seeking an increase in basic auto insurance rates for the first of an expected three years.

Presuming the application is approved — and given looming losses in the hundreds of millions of dollars it probably will be — then the across-the-board rate increase would take effect next April 1.

Other pieces of the puzzle include the coming increase in premiums charged for excess penalty points and bad driving records. Cabinet has ordered those be boosted 20 per cent effective Nov. 1 and another 20 per cent on Nov. 1 of 2019. The additional charge for each of an estimated 68,000 drivers will average $150 over the two years.

Then there’s optional coverage. Most British Columbians buy theirs from ICBC and the rates are unregulated. ICBC declines to share details because of a small number of private sector competitors.

But unofficial watchdog Richard McCandless estimates optional rates have increased by about nine per cent over the past year. Given the state of the books at ICBC, one can reasonably expect about the same in the year ahead, probably starting Nov. 1, the first anniversary of the last increase.

Putting all this together: starting this Nov. 1, most drivers are likely to face an increase in optional rates and those with too many penalty points and/or a record of crashes will surely face a bigger bite.

Next April 1 comes an increase in the basic rate, probably in the same range as the last one of between six and seven per cent.

On Sept. 1 of next year, the new rate framework will kick in. Drivers who renew their auto insurance after that date will be subject to all the shifts in territorial, class, inexperienced driver, newcomer, additional driver and other rate calculations.

They will also discover the truth behind the NDP’s claim last week that two-thirds of drivers will be in line for “reductions” under the new framework. The alleged benefit was predicated on “existing rates.”

By the time Sept. 1, 2019 rolls around, everyone will be paying more under the increased rates expected to kick in next April 1.

As to how all this affects individuals, everyone will pay more for basic, most will pay more for optional, many others will be shelling out for one or more changes in the framework.

Details to come. But from what we’ve seen to date, many drivers have every reason to expect rate shocks over the next year or so.

The changes in rate design are not intended to make up for the sizable operating losses inherited from the B.C. Liberals.