British Columbia will not hurt customers in bid to resolve ICBC crisis
Published: September 6, 2017
Updated: July 24, 2018
Author: Luke Jones
CATEGORY: Car Insurance
While British Columbia has today been forced to raise ICBC auto insurance rates by 8% to combat the ongoing financial crisis the crown corporation finds itself in. However, Attorney General David Eby (the man who oversees ICBC) says the government is taking control to ensure customers are not hit by further increases.
“Drastic action is needed to fix ICBC’s devastating financial crisis, but B.C. drivers should not be forced to pay 20% basic rate hikes today because of mismanagement that goes back years,” Eby said in a statement Tuesday.
While the rate increase is sizeable, Eby says it is less than “the 20% rate hike that was recommended by the report commissioned by the previous government and released in July 2017.”
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 reads.
“Our commitment to British Columbians is to make life more affordable for them – forcing 20% rate increases on drivers is a non-starter,” Eby says.
Eby has already been vocal about where the blame should be laid. He says the former Liberal government took out $1.2 billion from ICBC when there was a surplus.
“It’s unacceptable for government to treat ICBC like an ATM machine – and it cost B.C. drivers more than a billion dollars,” the minister argues. “Our priority is to make sure that affordability for good drivers always comes first.”