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

Surrey, Santa Claus is coming to town with lighted trucks

Special events in Cloverdale and Surrey Civic Plaza on Dec. 2

A ‘Peter Pan’-to opens in Surrey this week, and tickets are being snapped up

Show at Surrey Arts Centre is produced by FVGSS, A Musical Theatre Company

Fire destroys home in Surrey

Crews called at 3 a.m. Sunday for a residential house fire on the 12000-block of 100 Avenue

Operation Red Nose returns for 17th year in Delta, Richmond

Last year the program saw 358 volunteers come together to offer rides to those in need

Mariners, Orcas win Fraser Valley volleyball championships

South Surrey senior teams to head to provincial championships next week

Six students arrested, charged in sex assault probe at Toronto all-boys school

The school’s principal, Greg Reeves, described the video of the alleged sexual assault as ‘horrific’

Canada Post ‘cooling off’ period won’t resolve postal dispute, says CUPW

CUPW national president Mike Palecek says the union isn’t holding rotating strikes to harm the public

Calgary city council votes to shut down bid for 2026 Winter Games

More than half of those who went to the polls voted ‘no’ to bidding for the games

Union offers support following B.C. mine death

Death of B.C. mine worker described as a wake up call for industry

Canadian Armed Forces to change approach to sexual assault investigations

New program aimed at a more open and transparent process, will consult with civilians, health and law professionals

‘N’ driver clocked going 51 km/hr over the speed limit

Port Moody police say the car was sent to the impound lot

Death of 38-year-old Fernie man at B.C. coal mine under investigation

Vehicle collision occurred at approximately 10:45 a.m. Sunday morning

Breathing polluted air during pregnancy may increase odds of baby having autism: SFU study

Study looked at nearly all births in Metro Vancouver between 2004 and 2009

Most Read