ICBC requests 6.3% auto insurance rate increase
Published: December 19, 2018
CATEGORY: Car Insurance
Amid massive financial losses, the Insurance Corporation of British Columbia (ICBC) is once again seeking to offset some costs onto customers. British Columbia’s public auto insurance provider has requested a 6.3% increase in rates.
In B.C., basic mandatory auto insurance protection is covered exclusively by the ICBC as the provincial crown corporation. A report last year highlighted the financial difficulties of the Insurance Corporation of British Columbia (ICBC). The province’s public auto insurance provider for basic coverage has lost nearly $2 billion in two years.
Last month, the ICBC said it has lost $500 million over three quarters in 2018 despite several efforts to reduce costs moving forward. Furthermore, ICBC says it is projecting a year-end financial net loss of $890 million for the 2018/19 year.
ICBC has placed the blame on rising costs of claims as collisions become more frequent and costs of repairs increase. The company has already increased rates last year, making British Columbia the most expensive province auto insurance premiums in Canada.
Like before, ICBC can only increase rates with approval from the B.C. Utilities Commission. The company will implement increased rates from April 1, 2019 if approved.
Since the plight of the Insurance Corporation of British Columbia was reported last year, the Insurance Bureau of Canada (IBC) has called for the province to open mandatory coverage to private insurers. The industry representative says private companies will bring needed competition into the market.
Currently, privately insurers operating in B.C. can only provide additional coverage on top of the basic policy.
After the ICBC made its latest request, the IBC reiterated the need for competition to stimulate the B.C. auto insurance system. The proposal “is yet more evidence that the solution to the challenges in BC’s auto insurance system must be found outside our Crown insurer,” IBC vice president, Pacific Aaron Sutherland said Monday in a release.