ICBC RATE SHOCK
Attorney general admits soaring premiums have to come down
Izabella Bryant is an 18-year-old with a busy life. She juggles two parttime jobs, full-time college studies, and soccer games and practices throughout the week.
That’s why she saved $10,600 to buy a 2013 Nissan Altima. She needed a car to get to all the places she needs to be.
When it came time to insure her first vehicle, she knew the ICBC premium for a young driver would be pricey.
But she wasn’t prepared for the actual sticker shock that followed.
“The bill was $5,300 for one year,” she told me. “I was stunned. I thought, ‘Are you serious? That’s half the price of the car!’ ”
Bryant has no accidents or driving infractions, leaving her wondering why her premium could be so high.
When I asked ICBC, the public auto insurance monopoly refused to comment unless Bryant signed a disclosure agreement waiving her personal privacy rights.
Eager for an explanation, Bryant readily signed the waiver, as did her dad, John.
But now they were in for another shock: ICBC says the Surrey teen actually got a bargain.
“Izabella renewed under the old rate model,” ICBC said in a statement. “If Izabella had renewed under the new model, and her coverage stayed the same, her premium would be $6,462.”
The new rate model hikes premiums for riskier drivers.
“New, inexperienced drivers are 3.5 times more at risk of getting into a crash,” ICBC said.
When I told John Bryant that his daughter was actually lucky — and her next ICBC bill will be more than $1,000 higher — he was even more stunned than his daughter.
“I’m totally shocked,” he said. “How do they think this is normal?”
Izabella said her grandmother stepped in to help pay her ICBC bill — but only for this year.
“I’m on my own next year and it looks like it will be even more expensive,” she said, while her dad said he’s starting to sweat the bills, too.
“My son is 16 and almost ready for his own independence,” he said. “Or is that dependence? How can any young person afford this on their own?”
Attorney General David Eby — the cabinet minister in charge of ICBC — said he’s not happy about the shocking rate hikes facing young B.C. drivers.
“The rates are still too high and we have to get them down,” he told me Saturday, adding the government is working on some high-tech solutions to lower rates.
That includes testing in-car telematics that measure driver speed and braking patterns that could lead to lower rates for safe drivers. But, for now, he said young drivers are still being charged artificially low rates, even if it might not seem that way.
“They’re still being subsided, though not as much as they were before,” he said, arguing private auto insurance in other provinces would be even more expensive.
Eby said an inexperienced driver like Izabella Bryant would have to pay up to $12,926 for the same insurance coverage in Ontario.
“Drivers face completely bizarre premiums — in excess of $10,000 — for similar coverage,” he said.
That brought an incredulous response from the Insurance Bureau of Canada, representing private insurance companies.
“No one would purchase from an insurer who supplied that quote,” said vice-president Aaron Sutherland. “They would shop around to find the same coverage for less. That’s the benefit of a competitive market.”
Sutherland said he did a quick check of private insurance providers in Alberta, and said Izabella Bryant could find the same policy there for half the price.
“I got a quote for the same driver, car and coverage in Calgary, a similar urban area. It came to $3,143,” Sutherland said.
“That’s more than the average person pays in Alberta, because inexperienced drivers pay more. But it’s far less than what young people pay here under ICBC.”
Eby said ICBC’s new rates are designed to more accurately reflect actual driver risk. That means riskier drivers will pay more and safer drivers will pay less.
But drivers around the province are still getting heart-stopping premium quotes at renewal time.
Lydia Mazzei, a 32-year-old Maple Ridge teacher, said she was shocked by her $3,325 premium — a 20 per cent increase over last year.
“I was flabbergasted and distressed,” she told me. “I haven’t even had a parking ticket, let alone an accident. It’s a big, unexpected financial hit.”
Gordon Nykiforuk, 66, told me his premium went up 18 per cent.
“I’ve got a clean driving record. Isn’t my rate supposed to go down, not up?” the retiree asked, noting he moved to Kelowna from Alberta four years ago, but ICBC wouldn’t fully recognize his 46 years of safe driving in the other province.
“They told me I would qualify for the full discount in 2039,” he said with a chuckle.
With the B.C. legislature returning for a fall session on Monday, watch for this issue to heat up.
The Liberals are demanding a review of ICBC’s basic insurance monopoly. A political firefight is looming over whether B.C. should allow private sector competition in auto insurance.