ICBC basic rates will increase 6.4% this year, as the new BC NDP provincial government brings in several changes aimed at boosting the corporation’s coffers.
According to a release issued on Tuesday, optional rates will also be increased by 3.1% in the first quarter, with quarterly increases of 2.2%, to a maximum of 9.6%.
Individual policy rates will depend on the age of the vehicle, value and use of a vehicle, and where it is being driven, reads the release.
Attorney General David Eby said the increases are part of a multi-year plan to fix the insurance corporation’s “financial crisis.”
“Drastic action is needed to fix ICBC’s devastating financial crisis,” said Eby in the release, claiming that the changes follow years of mismanagement by the BC Liberals.
Earlier this summer, Eby released a report commissioned by the previous government, which stated rate increases of 30% could be on the cards.
That report said provincial government intervention had protected BC drivers somewhat, but a rate increase of 15% to 20% was still needed.
“Our commitment to British Columbians is to make life more affordable for them – forcing 20% rate increases on drivers is a non-starter,” Eby said.
“Our government is working overtime to clean up the mess we inherited in a way that minimizes impacts on drivers.”
More accidents and more high-value cars
According to the report previously issued, about 20,000 extra crashes per year have been happening in BC since 2013, an increase of 23% from 2013 to 2016.
As well, says the report, ICBC’s vehicle repair costs have increased by more than 30% in the past two years, to a total of $1.5 billion in 2016.
The report says this is partly driven by the increase in high-value vehicles, costing more than $150,000, (and thus high-cost repairs) in BC – 70% in the last four years.
Other factors contributing to the rising cost of dealing with claims include increases in the average cost of settlements for injuries and the number of claims being filed.
The report also states that the number of claims being filed is increasing faster than the number of accidents.
Biggest financial loss in ICBC history
According to Eby’s release, ICBC had the biggest financial loss in its history last year, losing more than half a billion dollars in 12 months.
And since 2010, Eby notes, the BC Liberals took $1.2 billion in cash from ICBC and put it into provincial government’s general revenues.
“It’s unacceptable for government to treat ICBC like an ATM machine – and it cost BC drivers more than a billion dollars,” Eby said.
“Our priority is to make sure that affordability for good drivers always comes first.”
Among the other measures being undertaken by the new government are:
- an operational audit of ICBC to prevent future mismanagement
- rolling out 24-hour red-light cameras at high-collision intersections
- a pilot program using new tech to eliminate distracted driving in high-risk groups
- a new ad campaign to boost public awareness of the risks of distracted driving
- rapidly retrofitting infrastructure and signage at dangerous roads and intersections