Changes To ICBC Rate System In Attempt To Make It Fairer To Many Drivers

Victoria – ICBC’s current rate structure is more than 30 years old. It is built around insuring the vehicle rather than the driver, and allowing discounts to drivers despite multiple crashes. Combined, this has resulted in British Columbians with crash-free, clean driving records subsidizing bad drivers, including those with multiple accidents. David Eby, Attorney General, said the submission ICBC is making to the BC Utilities Commission (BCUC) will include revenue-neutral proposals aimed at levelling that playing field.

(NOTE – The irony is that another rate increase could be coming within the year)

The B.C. government has directed ICBC to file an application with the BCUC (BC Utilities Commission) by August 15, 2018. Subject to approval, the changes would come into effect September 2019. Separately, the government has also directed ICBC to move the timing of its basic insurance rate application to the BCUC from late August to December to align any rate change with the other product changes already announced.

The proposed changes align with feedback government received from nearly 35,000 British Columbians on how to make insurance fairer. Key proposed changes to basic insurance include:

  • Moving to a driver-based model, so that at-fault crashes are tied to the driver and not the person who owns the vehicle;
  • Increasing insurance discounts for drivers with up to 40 years of driving experience, up from the current limit of nine years; and,
  • New discounts available for vehicles with original, manufacturer-installed automatic emergency braking technology and for vehicles driven less than 5,000 kilometres per year.

If approved by the BCUC, these changes will benefit an estimated two-thirds of ICBC’s customers. The changes will not increase the total funds that ICBC collects through basic policies, but instead will rebalance individual driver premiums and reset the way rates are determined.

Other proposed changes include:

  • Basic insurance discounts for inexperienced drivers will be adjusted to better reflect their risk;
  • At-fault crashes will have a larger impact on the premium a driver pays;
  • Rate classes and territories data will be updated for the first time in more than 10 years to reflect significant changes in traffic density, population growth and changes in the urban infrastructure; and,
  • An increase to the Driver Penalty Point (DPP) and Driver Risk Premium (DRP) programs of 20% in fall 2018 and 20% in fall 2019, as previously announced.

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