Two-thirds of BC drivers will see their auto insurance rates decrease under a proposed new model set to start in September 2019.
Attorney General David Eby says it’s the first significant changes to the rate system in 30 years.
“One of the most fundamental changes is moving to a driver based model, so that insurance premiums are tied to the driver using the vehicle instead of being tied to the person who owns the vehicle. This move was strongly supported by the public engagement,” Eby told a news conference.
Eby says those who drive safe and don’t cause crashes could get decreases of up to $100 or more, based on their experience and years of crash-free driving.
“British Columbians can have more confidence that if they drive safely, and don’t cause crashes, the rates they are asked to pay will much more closely represent the risk they actually represent on the road. Based on today’s rates, in the first year of this transition, an estimated two-thirds of customers would see lower basic insurance premiums, while the remaining one third would see an increase.”
He says less experienced drivers — and those that cause crashes — will see increases of up to $100 or more.
“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 and Driver Risk Premium programs of 20% in fall 2018 and 20% in fall 2019, as previously announced.”
Eby says new drivers will be able to have accidents in their learning phase that won’t impact their regular license.
“There will be an additional premium for having a learner driving your vehicle, but the collisions that the learner has will not transition over to once they have their drivers license because we think it’s important that people be able to learn to drive a car without actually having to pay.”
BC had an average of 960 crashes a day last year (350,000 for the year), up 25% from 2014.
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.
“The changes we are proposing are the most significant updates to how ICBC’s basic insurance premiums are set in more than 30 years,” said Joy MacPhail, ICBC’s board chair. “When British Columbians were asked for their feedback on this topic, one message came out loud and clear – lower-risk drivers shouldn’t be paying the same as some high-risk drivers. We wholeheartedly agree.”
Andrew Weaver, leader of the B.C. Green Party, says he’s pleased that B.C. drivers will have a fairer rate structure.
“These are progressive changes that will ensure that those with clean driving records will be paying less, while people who cause crashes will generally be paying more. These changes will align rates more closely with risk and the actual cost that drivers pose to the insurance system,” says Weaver.
* ICBC basic insurance is the mandatory coverage drivers need for a vehicle in B.C. It helps ensure that British Columbians who own and drive a motor vehicle in this province are protected with a basic level of coverage.
* Under the model ICBC currently uses to determine premiums:
A customer at the highest level and receiving the top discount can have up to three crashes in one year and still pay the same basic premium as a driver who is crash free.
Over 40% of claims are forgiven each year, which means the cost of those claims is borne by everyone, including drivers who do not cause crashes.
At-fault crashes affect the vehicle rather than the driver, allowing some drivers to hide their true risk and avoid paying a fair rate.
* Based on today’s rates, in the first year of this transition, an estimated 67% of customers would see basic insurance premiums that reflect a lower risk:
39% of all drivers – up to $50 reduction
13% of all drivers – between $50 and $100 reduction
15% of all drivers – more than $100 reduction
* Based on today’s rates, in the first year, an estimated 33% of customers would see basic insurance premiums that reflect a higher risk:
11% of all drivers – up to $50 increase
5% of all drivers – between $50 and $100 increase
17% of all drivers – more than $100 increase