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ICBC is submitting its 2016 basic rate application to the British Columbia Utilities Commission and it’s asking for basic insurance rates to be increased by 4.9 per cent.
If it’s approved, that would mean on average a motorist will be paying approximately $3.50 more a month for insurance coverage.
“We certainly don’t like to have to ask our customers to pay more but these external pressures are very real and they have created a perfect storm which we are struggling to hold off,” said Mark Blucher, ICBC’s president and CEO.
“We’ve worked hard to get this rate increase lower than last year’s but the amount of basic premiums we collect will still not cover the increasing amount we’re paying out in basic claims costs.”
Last year, ICBC asked for a 5.5 per cent increase.
The increase this year is because “the external pressures on insurance rates in B.C. are very real.” As well as the increase in the number of crashes, claims and the cost of settling those claims.
According to ICBC, the number of crashes in the province jumped 15 per cent in two years. From 2013 to 2015, the number of crashes went from 260,000 to 300,000.
In the last 12 months, 232,300 damage claims have been reported to ICBC. This is an increase of 23,700 claims from just two years ago.
When it comes to injury claims, the number of people injured in crashes has jumped by a staggering 32 per cent over the last six years. Between July 2015 and July 2016, there were 67,300 new injury claims alone.
To cover the cost of more crashes, ICBC would need to charge every customer an extra $130 a year, which would have required a rate increase of 15.5 per cent.
Minister of Transportation and Infrastructure Todd Stone cited many of these statistics when he talked to reporters about the proposed hike Aug. 25.
Stone reiterated that the government worked closely with ICBC to keep the increase low, pointing to things like the $142 million ICBC has transferred from the optional side of its business to its basic side, and stepped up anti-fraud efforts the agency has undertaken.
“We understand that any rate increase is damaging for drivers in B.C.” he said.
"We will continue to work with ICBC to identify and implement longer-term, sustainable measures that will ease the pressure for future rate increases, to ensure that ICBC insurance rates remain affordable for B.C. families."
To learn more about the potential increase, click here.
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