By: Luke Jones, Published on September 6, 2017 10:59 AM, Last Update on September 6, 2017 08:01 AM
The Provincial Government of British Columbia has confirmed auto insurance costs will rise by 8% on average, adding $130 to the annual insurance average for drivers. The rate increase was perhaps inevitable considering the damaging July report that showed the Insurance Corporation of British Columbia (ICBC) is in financial trouble.
Last month, a government commissioned report by Ernst & Young LLP showed that the ICBC is in financial trouble. The report concluded that current rates do not cover rising claims costs and collisions in the province, which is already Canada’s second most expensive auto insurance market.
The 195-page report, titled Affordable and Effective Auto Insurance – A New Road Forward for British Columbia, suggested premiums would need to increase by up to 30% to make ICBC viable.
“The average driver in B.C. may need to pay almost $2,000 in annual total premiums for auto insurance by 2019, an increase of 30% over today’s rates, assuming current trends persist, the objective is to have ICBC’s rates cover its costs, and significant reform is not undertaken,” the report read.
Attorney General David Eby, the man also in charge of overseeing the ICBC, said he would not allow the 30% increase on his watch. However, increases seemed inevitable. Eby describes the increase as “significant” but says other solutions are in development to solve the ICBC crisis. Eby confirmed the BC Utilities Commission will be approached to increase basic auto insurance by a further 6.4% this year.
“There are deep and profound issues that need to be addressed immediately in order to keep rates affordable for British Columbians over the long term,” Eby said in a statement to the media. In its report, CBC says the following proposals are in the works: