ICBC admits 42 per cent in rate hikes possible, drops insurance for luxury cars ROB

[thumper]

Mike Smyth: Ignore the distractions — voters can handle the truth on ICBC rate hikes



Ignore the distractions ? voters can handle the truth on ICBC hikes | The Province

As soon as the B.C. government was forced to reveal possible ICBC rate hikes of up to 42 per cent over the next five years, it was time for them to reveal something else: A sleek, shiny, turbo-charged distraction.

The government’s message: Pay no attention to that humongous rate hike bearing down on your wallet like a runaway 18-wheeler, B.C. drivers! We’re bringing the hammer down on wannabe James Bonds tearing around in Lamborghinis and Maseratis.

I’ll explain in a minute why you should not fall for the government’s misdirection on sports-car-driving playboys. Let’s talk about how much you could be paying to drive your own car first.

The jaw-dropping, 42-per-cent rate hike was contained in ICBC premium projections that the public auto-insurer wanted to keep secret, but was forced to disclose Wednesday by the B.C. Utilities Commission.

With an election approaching in the spring, the last thing the government wanted to tell voters was the truth: Five more years of pain for B.C. drivers who have already seen premiums rise more than 37 per cent since 2011.

You can bet the government considered muzzling the nosy utilities commission with a cabinet order that would have kept the possible rate-hike shocker a secret.

(Remember that scene in the movies where Jack Nicholson told Tom Cruise: “You can’t handle the truth?” It would have been something like that.)

But that would have been such an obvious insult to voters’ collective intelligence that the government decided they could not keep the potential rate hike a secret.

Why could ICBC rates go up so high and so fast? Because the accident rate is up, fraudulent claims are up, court-ordered awards are up, high-tech cars are more expensive to repair and a weak Canadian dollar makes American-made auto parts more pricey to buy.

Still, a compounded 42-per-cent rate hike is an unwelcome pre-election talking point for the governing Liberals. (On a yearly basis, the projection is a 4.9-per-cent increase this year, 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.)

So Transportation Minister Todd Stone insisted Wednesday that the potential rate hikes are “an extreme, worst-case, hypothetical situation.”

“We are not going to allow a scenario that would provide for that level of basic rate increases to actually happen.”

He said the government will crack down on fraud and distracted driving to keep rate hikes lower.

And then he wheeled out that big distraction I mentioned earlier.

Stone announced ICBC will refuse to insure high-end luxury vehicles valued at over $150,000. He said these rare, exotic cars are six times more expensive to repair than normal vehicles.

Legislation will be passed to force the owners of these exotic cars to get private insurance. In the meantime, Stone said, ICBC will double their existing premiums.

Drivers, please don’t fall for this obvious distraction away from the looming ICBC rate hikes on your own vehicle.

For one thing, there are only 3,000 of these exotic cars on the road. If you think refusing to insure less than one-tenth of one per cent of the 3.1 million vehicles in B.C. will make any significant difference to your own ICBC bill, then I have a slightly used Yugo I’d like to sell you.

Here’s a friendly suggestion to Stone: If these cars really are six times more expensive to repair than normal cars, ICBC should be more than just doubling their premiums. It should be a lot more.

And minister: Please stop using ICBC like a heavily lactating cash cow. The government practice of extracting “dividends” from ICBC — more than $1 billion siphoned in recent years — should be stopped right now, forever, before we pay a penny more.

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[Harvey Specter]

So got my quote for the Lambo. It'll be around $4000/year (includes basic + optional), $2800 deductible so no increase from the quote I got a few months ago. I called CDI and they quoted the optional insurance for a $1000 less than ICBC but 3rd party liability is $1.5m compared to $3m ICBC is including.

I was also told that ICBC has no plans to cancel the insurance for exotics until the gov't actually passes something and even then it might take a couple years for the policy to go into effect. Like I was told by someone at ICBC it's all political talk.

[twitchyzero]

^ that quote actually seems very reasonable for an exotic

[Harvey Specter]

Originally Posted by twitchyzero

^ that quote actually seems very reasonable for an exotic

Yup, it's really based on your driving record and how many years you've been driving. If you have two+ at fault accidents on your driving record you're basically screwed or if you're under 25, male and you've been only driving for a few years.

[underscore]

$4k/yr for a Lamborghini? So your insurance is only 2.5x more than mine even though your vehicle is worth at least 50x more?

[unit]

4k to insure a lambo is a steal. literally, as in stealing money from those who pay just under half as much to insure beaters.

[Harvey Specter]

Well rates boil down to your age and driving record. I have a clean driving record, no violations, no accidents plus 20 years of experience.

[MarkyMark]

I'm the same as you except 15 years driving experience and my F150 costs me $2200 with max discount... At least my deductable is only $300 lol

[Urrtoast]

Originally Posted by Harvey Specter

Well rates boil down to your age and driving record. I have a clean driving record, no violations, no accidents plus 20 years of experience.

Like I was saying in the earlier post and this Proves my point, Good Drivers with 10plus year driving experience with no accident or stupid tickets should get a discount plain and simple.


Now all the crap drivers can fail this post as well. I need a laff......

[Traum]

For what it is worth, I just ran some insurance numbers yesterday. My ICBC rates were about $200 cheaper than CDI -- and that's on several different cars.

Mind blown, to be sure.

[Teriyaki]

Originally Posted by underscore

$4k/yr for a Lamborghini? So your insurance is only 2.5x more than mine even though your vehicle is worth at least 50x more?

I think this is pretty ridiculous. Someone insuring their $2000 winter beater (which they drive all year because they can't afford anything more) might pay half that cost. Yet when an accident occurs, the lambo's headlight probably costs more than the entire car itself of the cheaper car. What kind of math is this and how in the world is this possibly sustainable and profitable.

I'm not a hater of ICBC, and don't know enough about public vs private insurance but the math on this just doesn't make sense.

[Traum]

Someone insuring a $2k winter beater will probably pay $1000 - $1200k for liability insurance only. It makes no sense to pay extra for full coverage when the car is worth so little, and when the smallest accident will cause the beater to get written off.

I'm very surprised that Harvey Specter can score a $4k insurance rate on his Lambo, even when his clean driving record and experience is taken into account. The numbers that I've heard seem to hover around the $10k mark for super cars, and that seems more sensible to me. But even then, I am not sure if it is enough to be sustainable for that kind of vehicles.

On a different note, I priced out the insurance for a Cayman S and C7 GS just for the heck of it, and full coverage for those cars under my name should only be around $2k to $2.5k. Granted, those are not super cars per se, but they are still vehicles close to the $100k mark. Quite frankly, I am very surprised by how cheap their rates are.

[underscore]

Originally Posted by Harvey Specter

Well rates boil down to your age and driving record. I have a clean driving record, no violations, no accidents plus 20 years of experience.

I do too (albeit 11 years, but still max discount) yet any exterior component of your car (fender, light, etc) probably costs twice as much as my whole Jeep is worth. That's a great deal for you, and nothing personal but it's kinda bullshit that you can insure it so cheaply.

[Harvey Specter]

ICBC is honestly all over the map with rates when it comes to exotics. There's some guys paying what I'm paying, some guys are paying a tad bit higher. I've heard from people that some Aventador owners are paying well over $10k/year, I've even heard of someone paying something like $30k/year.

And another factor ICBC takes into consideration for the rate is things like where you live, your house, where your car is been parked and who else will be driving it. For example, if I put my wife on my insurance the rate would have gone up by a couple thousand just because she doesn't have a great driving record. So atm no one can drive my car, can't even move it a inch so that's pretty shitty unless I pay the extra and put my wife on it.

[whitev70r]

Seems like now ICBC is going to stop insuring high-end luxury cars altogether? Unless it's all talk ...

ICBC will stop insuring high-end luxury cars

VANCOUVER (NEWS 1130) – Driving your Bugatti around town will likely cost much more in the near future. The BC Government is planning to stop allowing owners of luxury vehicles worth more than $150,000 to get their insurance through ICBC.

According to Stone, there are about 3,000 cars worth more than $150,000 insured in BC this year, a 30 per cent increase from three years ago. He says it’s unfair to expect drivers of average cars to subsidize the cost to fix luxury cars. “Right now, whether a person drives a $25,000 Honda Civic or whether that person drives a $200,000 Lamborghini, their insurance rates are similar, while the costs of repair are substantially different… When these more expensive vehicles get into a crash, it costs approximately six times more to fix them because these vehicles are rare. They’re also built using high-end technology and much more expensive materials.”

[dark0821]

... sigh... this news is just depressing... my opinion will just be for ICBC to give a better discount than 43%...

Yes punish the good drivers to pay for the bad drivers...

[Gucci Mane]

Originally Posted by MarkyMark

I'm the same as you except 15 years driving experience and my F150 costs me $2200 with max discount... At least my deductable is only $300 lol

you're paying $200 more per year than i am and we drive the same vehicle and have the same discounts. but the difference might be that my deductible is $500. i think.. lol.

[Marco911]

1) There's a misconception that luxury car owners pay the same basic rates as econoboxes. The vehicles fall into a rate class depending on type of vehicle/age.
Perhaps they need to review the accident rates of the different rate classes and charge the appropriate premiums for each. They probably need to create some higher rate classes as well for super-exotics made of carbon fibre. That seems to be the basic role of insurance actuarial math. They haven't actually provided us with the data of the total repair claims of high end cars vs. the premiums collected on these, so it is impossible to tell how much money they are losing here. If there are only 3,000 of these cars on the road, there is no way they are driving up the total cost of insurance for everybody. So I agree, they are using this as a distraction.

2) Insurance costs are not just repair costs for vehicles but also injury and property damage costs. I'm sure fraud and injury costs are through the roof in BC. I haven't seen the data, but statements from ICBC seem to bear this out.

3) How has the ICBC investment portfolio done for the premium float they have invested each year? They haven't published their actual rate of return against their assumed rate of return for the actuarial estimates. I'm guessing their asset managers have performed very very poorly.

4) Private companies won't agree to come into the marketplace if they can only insure a small pool of vehicles. The admin costs alone such as hiring inspectors, lawyers, etc etc would not make the business viable. ICBC won't/can't get out of this business without allowing private companies to compete against them for basic insurance. So either they will change the law to privatise auto insurance in BC or everyone's rates will just go up. Remember you heard that here first.

[skylinergtr]

icbc and the news fails to bring up how icbc has spent hundreds of millions of dollars on this new computer system for their insurance which has caused nothing but problems so far. They need to recoup somehow... blame it on high end cars.

[MarkyMark]

Originally Posted by Gucci Mane

you're paying $200 more per year than i am and we drive the same vehicle and have the same discounts. but the difference might be that my deductible is $500. i think.. lol.

Our liability coverage could be different as well

[MrPhreak]

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[twitchyzero]

how is a new Fiesta ST under $1600 even with 40% discount? That's a good deal around these parts.

[MrPhreak]

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[TouringTeg]

PST ugh. Did you buy both cars within the last 6 months?

[MrPhreak]

Originally Posted by TouringTeg

PST ugh. Did you buy both cars within the last 6 months?

I bought them both new... I've had one for about 3.5 years, and the other for just over 2 now