Transportation Minister Todd Stone said Monday a potential 6.7 per cent hike to ICBC basic rates is too high but gave no indication of whether the government would reduce the dividend it takes from the public auto insurer.

ICBC may hike basic insurance rate 6.7 per cent

Soaring injury costs to drive up basic premiums at B.C.'s public auto insurer

The Insurance Corp. of B.C. is warning motorists they’ll soon pay more for basic auto insurance.

Because of a rate smoothing policy introduced by the province in 2013, this year’s rate hike must be between 3.7 and 6.7 per cent – within 1.5 per cent of last year’s 5.2 per cent increase on basic rates.

ICBC president and CEO Mark Blucher said the initial calculations suggest the maximum 6.7 per cent basic rate hike is required, but pledged to work with the government to find ways to reduce that number by Oct. 30, when the formal rate application is to be filed with the B.C. Utilities Commission.

He said ICBC is grappling with “an unexpected and rapid escalation in the number of injury claims being reported to us in recent months.”

ICBC’s bodily injury claim costs, which cover pain and suffering, future care and loss of wages, are forecast to hit $2.3 billion this year, up 64 per cent since 2008.

Higher legal and medical costs, more represented claims and more complex, catastrophic claims leading to bigger settlements are among the factors blamed for the jump.

Injury claims are up 10 per cent from a year ago even though the number of crashes is unchanged. ICBC says more fraud is one potential explanation, as well as more minor soft tissue injury claims.

If regulators approve the request, this will be the fourth straight year of basic insurance premium increases following hikes of 11.2 per cent in 2012 and 5.2 per cent in each of 2013 and 2014.

ICBC has simultaneously reduced its optional insurance rates – on which it competes against private insurers – in five of the last seven years.

ICBC spokesman Adam Grossman said the net effect is the average customer has seen their overall auto insurance costs rise by less than 10 per cent since 2008.

Grossman said this year’s required increase would actually be “on the order of 12 per cent” were it not for the constraint of the rate smoothing policy.

Transportation Minister Todd Stone said even the maximum 6.7 per cent this year is too much.

“We believe that’s not acceptable and the rate can and should be lower than that,” he said Monday.

Stone appointed ferries commissioner and former deputy minister Gord Macatee to help ICBC pare the hike.

Asked if the province might reduce the annual $160-million annual dividend it extracts from ICBC each year, Stone said those transfers are from ICBC’s excess capital on its optional insurance business and do not affect basic rates.

He acknowledged an optional rate cut would help ease the pain for the majority of motorists who also buy their optional coverage from ICBC, but made no commitment to enable that.

The Bank of Canada’s recent interest rate cut has significantly reduced the projected returns of ICBC’s investment portfolio, Stone added.

ICBC RATE CHANGES and GOV’T DIVIDENDS | Create infographics

Just Posted

The end of an Echo

Invermere Valley Echo shuts down operations in Columbia Valley

Creating a new narrative for Canal Flats

Economic development consultant hired, lists vision for next 90 days

UPDATE: Crews battle as wildfires rage in B.C. Interior

Crews brace for another day on B.C. firelines as no let up is likely

VIDEO: B.C. wildfires by the numbers

Wildfires continue to engulf regions of B.C.’s forests and communities.

VIDEO: More than 180 wildfires burning across B.C.

Firefighters from other provinces called in to assist

DTSS Grad March 2017

DTSS Grad March 2017

59 cats seized in Chase

59 neglected and injured cats were seized from a property in Chase

Soundgarden singer Chris Cornell dead at age 52

The singer/songwriter passed away early Thursday morning in Detroit

Paying tribute to a primeval passage

Uninterrupted celebrates the Adams River sockeye run in an extraordinary way.

UPDATE: Pemberton Music Festival cancelled, no automatic refunds

In the past, the music festival located in Pemberton drew large crowds last year of 180,000 fans

Medical wait times cost B.C. patients $2,300 each

New Fraser Institute report places B.C. at second worst in costs associated with long wait times

UPDATE: 22 killed at Ariana Grande concert

Witnesses reported hearing two loud bangs coming from near the arena’s bars at about 10:35 p.m.

One in three Canadian high school students have rode with drinking drivers, study reveals

Nearly one in five rode with a driver who’d been smoking pot

Top court to hear federal government’s appeal on residential school records

A lower court judge ruled to destroy the stories after 15 years unless consent is given to preserve

Most Read