ICBC is updating its 30-year-old rate structure to shift costs to those most at risk of accidents, including an extra charge to cover new drivers and potential savings for seniors with a long history of safe driving.
Under the proposed changes, ICBC will forgive one claim for customers with 20 years of driving experience, and no at-fault crashes in the past 10 years. Once a claim has been forgiven, the customer will need 10 more years of crash-free driving to regain the ability to have a crash forgiven without rate increase.
Owners with a learner using their vehicle will pay a premium for the additional risk, ranging from $130 to $230. Inexperienced drivers will also pay higher rates, reducing as they record years of safe driving.
The changes are to be phased in starting next year, once approved by the B.C. Utilities Commission. Rates are also to be adjusted for territories of B.C., updating the 10-year-old regional rates to account for urbanization and the increased risks for densely populated areas.
Attorney General David Eby said the current system “broken” and out of date.
“A driver with no crashes could be paying the same premium as a driver with three at-fault crashes in a year,” Eby said.
The first change B.C. drivers will notice is this fall, when previously announced increases in penalty points and serious offence convictions take effect. Those rates go up 20 per cent in September 2018 and another 20 per cent in September 2019.
ICBC estimates that up to two thirds of its customers would benefit from the changes if they were implemented today, but that does not take into account the further rate increases that may be needed.
Eby said ICBC is still expecting to report a $1.3 billion shortfall in its fiscal year that ended March 31, due to record-high crash rates, claim payouts and legal costs associated with settling claims. He was not able to estimate the general rate increases that will be needed in the years ahead to bring the corporation’s books back into the black.
Currently the safe driver discount reaches its maximum after nine years of crash-free driving. When the new system takes effect, crash-free drivers continue to accumulate discount for up to 40 years.
B.C. Liberal leader Andrew Wilksinson said the Crown corporation’s performance does not stack up well against private insurance.
“When we look across North America we see that most other jurisdictions operate without a government-run insurance system, but do operate under very similar driving laws as British Columbia,” Wilkinson said. “Strangely, those motorists are not facing a system that unfairly labels most of them as ‘bad drivers’ and forces them to pay very high insurance rates.”