Minister Todd Stone says that ICBC is moving towards no longer insuring luxury vehicles.

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

Pedestrian injured after train collision in Cloverdale

Police say the investigation is in the early stages

Surrey filmmaker creates ‘Monster’ movie about gang life in the city

Fleetwood resident Inderveer Sodhi wrote, directed and stars in his coming-of-age fictional drama

Surrey author wants to create awareness of colourism with latest book

The Desirable Sister is Taslim Burkowicz’s second book

Surrey drunk driver gets 32 months in prison for killing grandma, injuring girl

Shavin Reynold Singh, 31, is also prohibited from driving for four years

Surrey ‘foam-free Vaisakhi’ initiative inspires ‘Sweet Takeaways’ business

KPU students launch business selling sugarcane takeout containers as alternative to foam, single-use items

Shatner, Obomsawin among 39 inductees to Order of Canada today

Shatner is being given one of Canada’s highest civilian honours for his 60-year career

VIDEO: One man dead after early morning house fire in Langley

Two other people were sent to hospital with injuries

John Mann, singer and songwriter of group Spirit of the West dead at 57

Mann died peacefully in Vancouver on Wednesday from early onset Alzheimer’s

Teacher tells B.C. Supreme Court that student was ‘happy’ to watch smudging ceremony in classroom

Case being heard in Nanaimo over indigenous cultural practice in Port Alberni classroom

VIDEO: B.C. high school’s turf closed indefinitely as plastic blades pollute waterway

Greater Victoria resident stumbles on plastic contamination from Oak Bay High

B.C. mayor urges premier to tweak road speeds in an ‘epidemic of road crash fatalities’

Haynes cites ICBC and provincial documents in letter to John Horgan

South Cariboo Driver hits four cows due to fog

The RCMP’s investigation is ongoing

B.C. won’t appeal decision protecting ICBC court experts

Change to evidence rules next to save money, David Eby says

Most Read