Rising numbers of crashes and higher claims costs are hurting ICBC's bottom line.

Insurance premiums increasing province-wide

The ICBC is filing for approval of a 4.9 per cent increase on basic insurance premiums for the upcoming year.

The Insurance Corporation for British Columbia (ICBC) is asking the British Columbia Utilities Commission to approve the increase of 4.9 per cent for basic insurance premiums, which would increase the monthly rate by an average of $3.50 per person.

“The B.C government wants to ensure that ICBC insurance rates remain as affordable as possible for British Columbians and as such, the Ministry of Transportation and Infrastructure has worked closely with ICBC to explore every possible avenue to make this happen,” said Minister of Transporation and Infrastructure Todd Stone during a telephone conference call last Thursday.

According to the government, the increase is the result of the frequency, complexity and severity of bodily injury claims in addition to higher vehicle repair costs. In total, the number of crashes across the province increased from 260,000 in 2013 to 300,000 last year with vehicle damages totaling $1.36 billion in 2015 alone up 17 per cent from 2014. Additionally, injury claims topped $2 billion for the first time in 2014 and reached $2.4 billion last year.

Stone said that one of the reasons for this increase is the frequency of distracted driving incidents throughout the province, with a quarter of fatal driving accidents coming from distracted driving. Earlier this year the government increased the fines for first-time distracted driving offences to $543 in an effort to show British Columbians the importance of putting the phone away.

“We don’t have hard data definitively yet that paints the picture as to whether we are seeing distracted driving frequency actually level off or hopefully decrease,” he said. “Anecdotally, we are hearing from different parts of the province from law enforcement that it would appear that British Columbians are beginning to get the message on distracted driving. Fewer tickets are being written in different parts of the province and that’s a good sign.”

Combined with distracted driving, the sheer increase in the number of vehicles on the road has called for a significant increase to offset the cost of claims.

“The actual cost of these pressures would have required a rate increase of 15.5 per cent,” Stone said. “However, government and ICBC have taken a number of steps to protect families from the full impact of these pressures.”

Instead of making British Columbians bear the full weight of the increase, Stone said the government instructed ICBC to transfer $472 million from their optional policy side of the business to offset the cost. Stone said that ICBC is only allowed to raise or lower basic insurance rates by 1.5 per cent in either direction, which, dovetailed with last year’s increase of 5.5 per cent, meant that the increase had to be between 4 and 7 per cent this year.

If approved by the Utilities Commission, the new rates will take effect November 1st. Stone said he understands the concern around managing the increases in future years.

“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.”