ICBC will not explore no-fault insurance route
Published: September 12, 2017
Updated: July 24, 2018
Author: Luke Jones
CATEGORY: Car Insurance
While changes are afoot at the Insurance Corporation of British Columbia (ICBC), but the man in charge of overseeing the overhaul has ruled out one proposed change. British Columbia Attorney General and minister in charge of the ICBC says he will not move the market to a no-fault auto insurance system.
Since the July report from E&Y into the corporation, authorities and experts have been deciding what to do with the ICBC. The extensive report found that the crown corporation has been financially crippled by rising collisions and the cost of claims in the province. Solving the issue in its entirety would mean increasing premiums by up to 30%.
Eby, an NDP minister, has laid the blame at the door of the previous Liberal government, which took $1.3 billion from ICBC when there was a surplus. The Attorney General says he will not allow customer to bear the brunt of the reform by adhering to the 30% recommendation.
However, premium increases are inevitable and the ICBC will submit its revenue requirements before the BC Utilities Commission (BCUC), but the corporation has already confirmed a rate increase on average of 6.4%. That would put $130 a year on top of the average auto insurance policy in B.C.
Those numbers show how devastating a 30% increase would have been for drivers. However, while a 6.4% increase goes some way to solving the ICBC crisis, it is not enough. Many have proposed a move to a no-fault system that has been adopted in Saskatchewan and helped Saskatchewan Government Insurance implement the cheapest car insurance market in Canada.
“Last year alone ICBC lost more than half a billion dollars in just 12 months,” Eby said. “That loss is the largest loss in ICBC’s history. ICBC’s annual losses, if no changes are made, are projected to increase to almost $1 billion in the next three years if we don’t take action now.”