The automatic braking system on your new car won’t save you from this collision.
British Columbia drivers are likely to be hit head-on with a 6.3 per cent hike in ICBC rates in the New Year.
ICBC will submit its next basic rate application with the British Columbia Utilities Commission later today, asking for the 6.3 per cent increase to basic insurance rates, an increase it claims would have needed to be almost 40 per cent if not for the major reforms being introduced to B.C.’s auto insurance system.
As widely reported last month, ICBC is projecting a net loss of $890 million for its current fiscal year, as external pressures continue to grow from a record number of crashes taking place in B.C., and the increase in claims volume and higher claims costs.
The escalating cost of injury claims is the single biggest factor impacting basic insurance rates – injury claims costs have soared by 43 per cent in just five years; projected to total $3.67 billion in 2018 alone. These costs have been spurred by increased injury claim legal representation, larger payouts and the rise in large and catastrophic injury claims, according to ICBC.
Government and ICBC have instituted major reforms to the auto insurance system in B.C. to reduce the burden that rising claims and legal costs are putting on the insurance rates British Columbians pay. B.C. is the last province in Canada to introduce some form of restrictions to address rising minor injury claims payouts. Without these changes, every vehicle owner in B.C. would be faced with an approximate $360 increase to their basic insurance rates, according to the insurer.
The significant reforms will reduce legal costs by introducing a limit on payouts for pain and suffering for minor injuries and a new dispute resolution model, while at the same time providing increased care and medical benefits for anyone who is injured in a crash. These changes are projected to bring in net savings of $1 billion annually to ICBC.
“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. The next year will be a very important one for us – our job is to ensure our customers continue to see the benefits of these massive changes on both the rates they pay and the care and benefits they receive.”
If approved, the new basic insurance rate would be effective April 1.
Meanwhile, the NDP government is blaming the previous Liberal government for the woes at ICBC.
“Today, British Columbian drivers are again faced with the reality of the financial crisis at ICBC left by the previous government,” said Attorney General David Eby. “This situation was so dire that, had our government not moved to stop the bleeding, the announcement today would have been almost a 40 per cent increase.
“What’s worse is that these repeated increases could have been prevented. 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. They not only ignored the warning, they hid the solutions from the public.”