IBC: British Columbia’s unlisted auto insurance fee is not common practice
Published: October 12, 2018
CATEGORY: Car Insurance
The Insurance Bureau of Canada (IBC) has criticized the Insurance Corporation of British Columbia (ICBC) over a controversial new rule. British Columbia’s public auto insurance provider is introducing a new fee. Earlier this month, the company said unlisted drivers must pay a fee of $50 for protection.
ICBC argues the fee is “common practice across North America and beyond.” However, the IBC disagree, suggesting the “justification simply does not hold water”. Aaron Sutherland, IBC Vice-president, Pacific Region says ICBC is going against Canadian common practice:
“As the association representing Canada’s private insurance companies, we are compelled to inform British Columbians that this is not common practice in other auto-insurance markets across Canada or in the United States.”
Its true car insurance providers ask drivers to name family members living within them. This is so the insurer knows who might also use a vehicle. However, listing incidental drivers like a friend is not a standard request.
Last year, an EY report highlighted the financial predicament of the ICBC. Losing billions to rising claims and repair costs, the company has been searching for ways to increase cashflow. In the meantime, British Columbia has become the most expensive auto insurance market in Canada.
IBC has often called for the province to adopt private car insurance providers. Under current regulations, ICBC provides all basic auto coverage, while private companies operate by selling added protection. IBC argues allowing competition in basic coverage will stimulate the auto market.
The bureau says the ICBC is attempting to price car insurance on driver risk and driver records, not their vehicles. Sutherland says this is a commendable strategy that will bring the company in-line with other provinces. The new unlisted fee does not fit with this model.
“With British Columbians paying more for auto insurance than anyone else in Canada, this is just the latest example of why B.C. drivers deserve choice and the freedom to shop around for their auto-insurance needs. If ICBC were open to competition and drivers didn’t want to purchase “unlisted driver protection,” they wouldn’t have to — they could take their business elsewhere.”