ICBC defends public auto insurance model against calls for private competition

Published: January 8, 2019

Updated: February 1, 2019

Author: Luke Jones



Despite being in a terrible financial situation and facing numerous calls to yield to private companies, British Columbia’s Insurance Corporation of British Columbia (ICBC) is standing firm to its public model.

The provincial crown corporation is embroiled in an ongoing financial crisis that has seen it lose $2 billion in two years. Several policies have been introduced to help ease the bleed of cashflow, while motorists in B.C. now pay more for their premiums than anywhere else in Canada. What’s more, a 6.4% increase in auto insurance rates will go live this spring.

Over the last two years, the Insurance Bureau of Canada (IBC) and several other organizations have called for the introduction of private insurance providers. Under the current system, the ICBC provides all basic auto coverage in British Columbia, giving it a monopoly in the province. Private companies do operate in B.C., but only through additional protection solutions.

One of the latest groups to push for private competition is the Canadian Federation of Independent Business (CFIB). In response, the ICBC told Canadian Underwriter said rates in B.C. cannot be compared to other provinces.

“It’s simply not an apples-to-apples comparison,” said Bill Carpenter, ICBC’s vice president of insurance. “B.C. is the last province in Canada with an unrestricted litigation-based insurance model – a full tort system with no current restriction on what you can sue for, no matter how small your injury. A full tort product is simply more expensive compared to one with caps/limits, or no fault systems generally.”

Carpenter also points to other provinces having more rural towns and less congestion, while drier climates are also a factor.

“ICBC’s Basic premiums also include components to cover driver licensing fees and road safety costs,” he added.

“When it comes to the suggestion that other provinces have better benefits, early this year ICBC announced significant improvements to its accident benefits – changes which will make ICBC’s accident benefits by far the most generous of tort systems across Canada.”

ICBC has other unique aspects, including:

  • Underinsured Motorist Protection (UMP), which is part of the basic auto insurance coverage. While UMP is available in other provinces, it can only be purchased separately, adding cost to a premium.
  • Full tort which gives claimants the ability to sue for pain and suffering. This is not available in no-fault car insurance systems.