Province proposing multiple changes to ICBC’s rate structure
VICTORIA — B.C. drivers could face dramatic reforms to their auto insurance, including changes to no-penalty crashes and the time it takes to reclaim discount rates after an accident, under a proposal unveiled by the government Monday.
If enacted, the changes would mean a driver at fault in a crash would no longer be eligible to recover their full 43 per cent basic auto insurance discount after three years of crash-free driving, and would instead need to demonstrate safe behaviour behind the wheel for 10 years. The proposal also calls for higher penalty point costs, a longer wait to accumulate a free at-fault crash, and fewer accidents before a senior citizen or inexperienced driver would lose their discounts and gets penalized at a higher rate.
“The consistent feedback I’ve had from British Columbians is that they think bad drivers should be paying more and good drivers should be paying less,” said Attorney General David Eby, who launched a monthlong public consultation plan on the changes Monday. “The question is who is a bad driver, and how much more should they pay?”
The overall goal is to change B.C.’s current auto insurance system from a model that is based on your vehicle, to rates that are based on your history of safe or risky driving, said Eby.
“People say, ‘Look I’m a really good driver I should get a discount. If I was in another province I would get a great discount,’” said Eby. “Those discounts can only come from people who have riskier behaviours paying more. So if bad drivers don’t pay more then there isn’t as much money to reduce rates for good drivers.” Reaction, however, was mixed. “The main thing and I’m really happy about it is they’ve realized the need to disentangle driver and vehicle,” said University of B.C. professor Werner Antweiler. “These are two different things to insure. That was the problem in the past, that we only had one instrument. Now we have two, and we can start to differentiate. That’s a step in the right direction.”
But the government’s argument was flimsy, said retired senior civil servant Richard McCandless. ICBC didn’t offer any specific data to back up its claims that two-thirds of drivers would pay lower basic rates under the proposal, and one-third would pay more, he said.
“If we want to save money in ICBC or generate more revenue the best thing is to cut the crashes, the second best is to cut the coverage, which is what they are doing with (recent caps to claims on) pain and suffering,” said McCandless. “Way down the scale is spinning your wheels trying to determine risk.”
Aaron Sutherland, vice-president of the Insurance Bureau of Canada, said aligning insurance premiums based on risk will benefit good drivers and penalize the worst.
“The changes that the government is consulting on now I think are important and if enacted they will make ICBC behaviour more and more like a private sector company,” said Sutherland, whose organization represents private insurance companies. “But the best thing we could do for drivers is introduce competition and let them shop around.”
ICBC has a monopoly on basic auto insurance in B.C. But it is facing a financial crisis, with $1.3 billion in losses this year due to rising crashes and skyrocketing bodily injury claims costs. Eby unveiled a $5,500 cap to pain and suffering claims on minor crashes last month, but said it will take a series of reforms to restore the corporation’s finances.