ICBC won’t insure luxury cars, Stone says after forecast of steep rate hikes

The insurance corporation forecasts rate increases from 6.4 to 9.4 per cent a year until 2020



Luxury supercars worth more than $150,000 will soon have to get private insurance and their owners will pay twice their current premiums to ICBC in the meantime.

Transportation Minister Todd Stone made the announcement Wednesday at the same time the public auto insurer released a forecast indicating basic auto insurance premiums might have to climb as much as 42 per cent over five years because of skyrocketing claims costs.

According to Stone, the move will ensure that “the broader rate payer is not subsidizing high-end cars.”

Luxury cars like Ferraris and Lamborghinis are six times more costly to fix.

There are more than 3,000 high-end luxury cars insured in B.C., a number that has shot up 30 per cent over the past three years.

Stone noted the average car in B.C. is worth only $15,000 – 10 times less than the new luxury car cutoff – but pays a similar basic insurance rate.

Stone admitted that neither the changes to luxury car coverage nor the B.C. government’s pledge to not take a dividend from ICBC over the next three years would do much to rein in the upward pressure on ICBC insurance premiums.

Forecasted increases to ICBC’s basic rates were also disclosed today in response to a B.C. Utilities Commission request for more information before approving a 4.9 per cent basic rate increase this year.

Under the province’s rate-smoothing legislation, each year’s change in basic insurance rates can’t be more than 1.5 per cent different from the previous year.

The ICBC forecast shows basic rates are predicted to increase 6.4 per cent in 2017, 7.9 per cent in 2018, 9.4 per cent in 2019 and 7.9 per cent in 2020 – numbers that compound to 42 per cent when this year’s 4.9 per cent hike is included.

Stone called that an extreme sce

nario and ICBC had opposed the release, calling the numbers hypothetical and “potentially misleading.”

ICBC also released more optimistic rate increase scenarios that level off at four per cent annually in the next four years or even shrink down to one or two per cent per year. Those scenarios assume a decrease in fraudulent claims, distracted driving and rosier investment returns.

Adrian Dix, the NDP critic on ICBC, dismissed Stone’s announcement on luxury car insurance as a “tactic” to deflect attention from the projected rate hikes.

“This is them being caught red-handed with their failed rate policy and trying to find a distraction,” he said.

Dix said ICBC would be on much better financial footing and drivers wouldn’t be facing big premium increases had the provincial government not taken $1.2 billion worth of dividends out of ICBC’s optional insurance business for general revenue over the last several years.

“The government has scooped money out of ICBC,” Dix said. “What we’re seeing are the consequences of Christy Clark treating ICBC as a bank machine. And it’s drivers who are going to pay.”

As for luxury insurance reform, Dix said the government could have passed that months ago if it was a serious priority, adding that luxury car repair costs are a minor contributor to ICBC expenses compared to the soaring costs of bodily injury claims.

He also noted that making supercar owners get private insurance won’t prevent ICBC from picking up their repair bills if another ICBC-insured motorist is at fault in a crash.

Exempted from the new private insurance requirement are pickup trucks, RVs, collector cars and limousines.

– with files from Jeff Nagel

2011 video of police impounding supercars racing into White Rock

 

By the numbers

$13,000 – Average repair cost when a high-end luxury car crashes

$2,500 – Average repair cost for a regular vehicle

$38,000 – Cost to repair a 2015 Bentley Flying Spur W12 with damaged fender, grille, headlight and intercooler.

$1,000 – Same basic insurance premium for both the Bentley and a typical car until now.

 

ICBC’s highest repair bills this year

$93,574 to fix a 2015 McLaren 650S valued at $405,000

$88,481 to fix a 2011 Ferrari 458 Italia valued at $300,000

$78,999 to fix a 2016 Maserati Gran Turismo valued at $215,000

$76,796 to fix a 2015 Mercedes-Benz CLS63 AMG valued at $120,952

$76,617 to fix a 2015 Porsche 911 valued at $158,785

$76,474 to fix a 2011 Rolls Royce Phantom valued at $246,500

@katslepian

katya.slepian@bpdigital.ca

Like us on Facebook and follow us on Twitter.

 

Just Posted

Surrey wants BNSF to slow Crescent trains

Mayor Linda Hepner said ‘it’s the least we can do’

Rail-safety forum planned for White Rock this Friday

Event to include municipal, federal, provincial governments

White Rock open house to discuss city’s aquifer protection plan

Examination of potential hazards includes increased population, climate change

‘Connecting Threads’ and more in Surrey Art Gallery’s fall shows

Free admission at opening reception and panel discussion Sunday afternoon

SFU unveils new lab at Surrey Memorial Hospital

Combination of MRI, MEG allows for ‘best possible windows’ intro brain function

B.C. RCMP turn to Const. Scarecrow to shock speeders into slowing down

New addition will watch over drivers from a Coquitlam median for first-of-its-kind pilot in Canada

B.C. home to 1/3 of Canada’s overdose deaths in first 3 months of the year

There were 1,036 overdose deaths in the first three months of the year, with 94 per cent accidental

B.C. candidate moves from hospice care to council race

He beat terminal cancer twice and entered hospice when he decided to run for council.

Canadian tobacco exec pushes back against vaping health concerns

A warning from Interior Health about the unknown health risks of vaping is getting a partial rebuke

New ‘meowyoral’ race featuring felines announced by B.C. animal shelter

Organizers hope the cat election will generate attention for shelter and local municipal election

Ministry of Agriculture commits $300,000 to help B.C. farmers obtain land

B.C. Land Matching Program supports access to affordable farmland for young farmers

Canadian air force short 275 pilots

Attrition outpaces recruitment and training claims Air Force

Teacher suspended after physically shushing, saying ‘shut up’ to student

Grade 5 student reported feeling ‘confused and a little scared’

A B.C. society helps to reforest Crown land after wildfires

Forest Enhancement Society of BC focuses on wildfire mitigation and the reforestation

Most Read