After projecting a net loss of $890 million for its current fiscal year, ICBC announced on Friday that it is asking for a 6.3% increase to basic insurance rates, effective April 2019.
Blaming the “cost of injury claims,” for the increase, ICBC those claims have “soared” by 43% in just five years, spurred by “increased injury claim legal representation, larger payouts, and the rise in large and catastrophic injury claims.”
In response, BC Attorney General David Eby, who once referred to the financially beleaguered crown corporation’s situation as a “dumpster fire,” said that the increase of 6.3% could have been much worse, had his government not stepped in.
“The announcement today would have been almost a 40% increase,” he said. “Our government has taken on the difficult work of fixing the problems left behind at ICBC, including implementing the very solutions the old government was told could have prevented this mess.”
Still, Eby said the issue was bigger than just the increase.
“What’s worse is that these repeated increases could have been prevented,” he said. “The previous government was presented with clear solutions to ICBC’s financial crisis and warned that if it did not act, drivers would suffer the consequences.”
Eby said the previous government “not only ignored the warning, they hid the solutions from the public.”
Earlier this year, Eby along with ICBC board chair Joy MacPhail, announced major proposed changes to how ICBC calculates insurance premiums.
The biggest announcement was a proposal to move to a driver-based system.
At-fault crashes will be tied to the driver, rather than the person who owns the vehicle.
“Good drivers shouldn’t have to continue paying more to cover the costs for those who cause crashes or present a higher risk on the roads,” Eby said at the time.
ICBC’s current rate structure is more than 30-years-old and was build around insuring the vehicle, rather than the driver, and allowed discounts to drivers despite having multiple crashes.
“The changes being made at ICBC today are arguably the most substantial in the corporation’s long history and to the auto insurance industry as a whole in this province,” said Nicolas Jimenez, president and CEO at ICBC. “While we acknowledge no rate increase is welcome news, it is encouraging to see these major reforms already having an impact on our insurance rates.”
If approved, the new basic insurance rate would be effective April 1 and will mean an average increase of less than $60 for personal customers’ basic insurance coverage.