IBC describes British Columbia’s auto insurance situation as “lose-lose”
Published: November 22, 2018
CATEGORY: Car Insurance
Last week, the government of British Columbia announced a change to accident benefit regulations in auto insurance. The amendments will be made to help salvage the financial situation of the Insurance Corporation of British Columbia (ICBC). However, the Insurance Bureau of Canada (IBC) believes B.C. is in a “lose-lose situation” regarding auto insurance.
The leader of the industry representative body recently discussed the car insurance system in B.C., saying high premiums are likely to continue. IBC president and CEO Don Forgeron spoke at a recent Greater Vancouver Board of Trade event.
“Under Insurance Corporation of British Columbia’s (ICBC’s) monopoly, British Columbians pay the highest auto insurance premiums in Canada – hundreds more than nearly all other Canadians, and double what Canadians in some provinces pay,” Forgeron explained.
Forgeron was referencing the public auto insurance system in British Columbia. The ICBC handles all basic auto insurance coverage in the province, while private insurance companies provide any additional policy benefits. IBC has long argued B.C. must adopt private insurers for basic coverage to strengthen competition.
“Rates have increased significantly in recent years, and they are expected to rise again. In addition, BC drivers get fewer benefits when they make a claim. Higher prices, fewer benefits: it’s a lose-lose situation,” the IBC head continued.
“Opening BC’s auto insurance market to competition could save drivers up to $325 annually,” he said. “Competition is a powerful incentive for any company to deliver the best service at the best price. Auto insurance is no exception to that rule, and opening ICBC to competition would make premiums more affordable in BC.”
British Columbia’s Ministry of Attorney General announced its plans for changing accident benefit laws in an effort to save $1 billion. Changing regulations for accident benefits will cost the ICBC $200 million each year. However, the cost will be offset by an estimated saving of $1.2 billion annually. In its release, the ministry said savings will come from a limit on payouts for pain and suffering from minor injuries and reduced legal costs.
The changes are part of an ongoing effort to bring financial buoyancy to the province’s public auto insurance provider.