Attorney general expected to hike ICBC car insurance rates

[thumper]

Attorney general expected to hike ICBC car insurance rates | CTV Vancouver News

CTV Vancouver
Published Tuesday, September 5, 2017 8:44AM PDT
Last Updated Tuesday, September 5, 2017 8:45AM PDT

Prepare to pay even more for car insurance.

B.C. Attorney General David Eby is expected to announce increases in basic and optional ICBC rates at a press conference Tuesday afternoon.

Eby's announcement will speak to the "short-term and immediate action being taken to rectify the serious financial challenges at ICBC," according to a release from the ministry office.

The announcement comes as B.C. tries to deal with the corporation's serious financial issues.

A recent report says there are more accidents in the province and the average settlement of claims is rising – making the current system unsustainable.

The Ernst & Young deep dive concluded that rates would have to go up 30 percent by 2019 in order to cover costs.

Fixing the Crown Corporation is one of the first major hurdles faced by the new NDP government.

Last month, Eby blamed the previous Liberal government for problems at the once-celebrated public auto insurer, saying the issues could have been dealt with much earlier.

[dapperfied]

[Mr.C]

I'm perfectly OK with that vs red light speed cameras or photo radar.

[mr00jimbo]

But I already paid a hike last year, and the year before that....

I've said it before and I will say it again - if they want to raise capital, they should encourage people to have a secondary vehicle (say a F250 and a commuter Civic) by offering multiple vehicle discounts.
But no, they're not willing to do so.

Are we going to have to prop ICBC up like we do with Translink by paying the highest price for gasoline in all of North America?

[MarkyMark]

I'll let it slide since everything else in BC is super affordable.

[320icar]

I'm so sick of this nickle and diming shit for every single dollar I earn.

[dapperfied]

I suppose they could use this money to pay off the bridges.

[teggy604]

I still don't see any recommendation of "fixing" the system. All we are doing is giving icbc more money to blow. So they raise the rates and by 2019 all the cost is covered then what? Ask for more money again??

[fliptuner]

So how much money is the government still taking from ICBC profits again?

[MarkyMark]

Giving money to the government is like giving it to a crackhead, the dollar amount they get doesn't matter, they'll find a way to blow it all and ask for more.

[Harvey Specter]

...

B.C. drivers can expect to pay an extra $130 per year as the NDP government boosts insurance rates to deal with serious financial challenges at the beleaguered Insurance Corp. of B.C.

At the news conference Tuesday, B.C.’s attorney general David Eby announced a basic rate increase of 6.4 per cent, or $57 on average per year, and an increase in the optional extended coverage rate of 3.1 per cent for the first quarter, with quarterly increases of 2.2 per cent to a maximum of 9.6 per cent.

Drivers that have both basic and option coverage, most drivers according to Eby, will face a blended rate hike of 8 per cent, or $130 annually on average.

“I’m assuming responsibility to get ICBC on the right track … We will fix this problem,” said Eby.

Last year’s basic rate hike was 4.9 per cent.

A report commissioned by the Crown insurance company and prepared by Ernst & Young that was leaked in July warned that B.C. motorists could see vehicle insurance rate hikes of almost 30 per cent in the next two years if the government doesn’t overhaul ICBC’s basic insurance system.

The report suggested measures such as capping payouts for pain and suffering for minor injuries, reintroducing photo radar, upgrading red-light cameras, increasing police efforts to catch distracted and impaired drivers, and making high-risk drivers pay more for insurance.

“Our commitment to British Columbians is to make life more affordable for — forcing 20 per cent rate increases on drivers is a non-starter,” Eby said Tuesday. “Our government is working overtime to clean up the mess we inherited in a way that minimizes impacts on drivers.”

ICBC premiums are among the highest in Canada, but according to the report “they are not high enough to cover the true cost of paying claims.” Basic rates have long been subsidized by money from the optional coverage side, however the optional insurance business has been dwindling and actually suffered a loss in the 2016/17 fiscal year. The gap between basic premium revenues and claim costs is currently $560 million and the shortfall will hit $1 billion by 2019 if nothing is changed, the report stated.

The report said ICBC is facing unsustainable financial pressures and requires immediate intervention by the provincial government.

On Tuesday, Eby announced a series of short-term measures the government will implement to improve ICBC’s operations and reduce accident rates. They include:

• Launching an operational audit of the Crown corporation, the goal of which is to make sure this type of mismanagement can never happen again;

• Moving forward with a pilot project to evaluate distracted driving reduction technology;

•Activating red-light cameras 24 hours a day, seven days a week, up from the current six hours per day;

• Increasing public awareness of the risks of distracted driving through a new advertising campaign; and

• Introducing a dangerous roads initiative to identify and rapidly retrofit infrastructure, regulations and signage at dangerous roads and intersections.

Eby dismissed some of the report’s recommendations, including bringing back photo radar and introducing no-fault insurance, which directs a person involved in an incident to deal with their own insurance company regardless of who is at fault.

In July, Premier John Horgan announced two new appointments to ICBC’s board — former NDP MLA Joy MacPhail as chair and TransLink’s Cathy McLay as a director.

Last week, ICBC was given a two-week extension — until Sept. 15 — to file its rate application for mandatory basic insurance. An interim rate will take effect Nov. 1 while the B.C. Utilities Commission reviews ICBC’s revenue application.

[StanleyR]

There's always the option to move to Alberta/Saskatchewan where the gas is 95 center per liter and insurance is about half what it is here...

and you have mosquitoes the size of softballs, snow and icy roads 10 months of the year, obesity ......

[6o4__boi]

dat increase doe...

[GS8]

Good thing I buy sub $5k cars now (in cash) since the cost of ownership is getting a bit much for me.

Too bad they all require premium fuel

[Traum]

Originally Posted by teggy604

I still don't see any recommendation of "fixing" the system. All we are doing is giving icbc more money to blow. So they raise the rates and by 2019 all the cost is covered then what? Ask for more money again??

They are going through with an audit to see where fat can be trimmed, but I don't really expect a lot of savings can be found from that one.

The ICBC money shortage problem has numerous causes, and IMO, the most glaring ones are:

1) the government siphoning huge $$$ from ICBC into its general revenues
2) the at-fault, litigation-driven system
3) too cheap an insurance rate for high risk / high cost drivers, and too expensive of an insurance rate for low risk / low cost drivers

#1 is an easy problem to fix, as long as the government is willing to implement it. However, not stealing money from ICBC means the provincial government will give up a major cash cow, and then they'll have to claw that back from somewhere else -- namely through tax hikes elsewhere, or from raising debt.

#2 is an un-fixable problem unless we are willing to adopt a no-fault insurance approach. IMO, our litigation-based system is more fair to those involved in the accident, but the downside is the higher costs that we are seeing now.

#3 is something that should be implemented. Personally, I don't know why it isn't.

[Lomac]

Originally Posted by fliptuner

So how much money is the government still taking from ICBC profits again?

This. So much this.

[meme405]

They keep trying to sell this to us every year with this "the cost of claims continues to rise".

The rate increases so far:

2012 - 11.2 (Because there was no hike in 2011)
2013 - 5.2%
2014 - 5.2%
2015 - 5.5%
2016 - 4.9%
2017 - 6.4%

Now the increase on the rent on a house is between 2% and 4% as far back as I know. Inflation hasn't been anywhere near 2% for the last decade. So what the fuck is going on with ICBC. Sure you can point fingers at the government taking yanking money out of ICBC's accounts, which is absolutely ridiculous I'll stand behind ICBC and shame the government on that one.

But you also have to think ICBC is doing a pretty shit job at managing the people causing accidents and making claims if a driver who hasn't had a claim in 6 years is still paying 38.4% more per year. This is the part that gets me. They say that accidents are costing more, but it looks to me that the cost of those accidents is getting spread inordinately to many people not causing any accidents with these blanket rate increases.

You have to understand that since ICBC also controls drivers licensing, they have enormous ability to stop bad drivers before they can even become bad drivers, and with all the videos and crap I see while I am driving around. I'd say this is probably where ICBC might benefit most from focusing some more attention.

Get the blind seniors off the road, get all the people who don't understand the rules of the road into a room and euthanize them, get the people who can't follow simple instructions like put down the phone, and learn to pay attention, don't drive drunk, etc into a room and just lock the door and leave it locked.

People might see me taking stabs at older people driving on here, but the reality of the situation is that we have an aging population, and if we don't control things like driving, it could get out of hand real quick, and I'm not just talking about the cost of insurance, I'm talking about real consequences like deaths, and serious injuries related to accidents caused by these road users. I happen to live in a building with many older residents, and the fact that I wouldn't trust most of them to hold a door open for me, terrifies me when I see them climbing behind the wheel of a car.

So there in my opinion tackling the issues surrounding who can actually drive in this province is what I think might be more effective than trying to recoup costs from bad drivers who cause accidents.

Also I think that those who cause accidents need to pay for more of the cost. I think ICBC kinda addressed this a little while back with the adjustment to the discount levels, but I'll be honest some of that update looked odd to me.

[mr00jimbo]

I'm sure there's a ton of high paying jobs within ICBC that can be trimmed down. Kind of reminds me of this photo:

[68style]

There's not enough dichotomy in ICBC's rates between drivers with no record and good drivers... not enough reward for going, say, 20 years without an at-fault claim... not enough punishment for repeatedly being a moron.

For example, you get a family comes over from China and the Mom has most likely never even driven a car before, maybe uses her BS China license (and lies about how long she will be in the country for so she doesn't have to get one here) and insures her Mercedes ML or whatever it is through ICBC... okay... sure... so she has no discount, she pays $5,000 or so for insurance which she can easily afford, and then she proceeds to learn on the job and cut people off and run stop signs and crash into shit for the next year, costs ICBC $50,000+ in claims or maybe even hundreds of thousands including injury payouts or even replacement cost on her $80k+ car in some circumstances... so she put $5k into the system and drained a couple hundred thousand or who knows how much out of it.

Your average resident here who knows how to drive, trained properly, got licensed (and even this sucks compared to countries like Germany where driver training is so far ahead of what it is here) and then basically goes claim free for the most part putting in only positive income to ICBC with maybe the odd little claim here and there... yes some people will get into big accidents, but a drop in the bucket comparatively speaking...

Why are we paying for people who obviously are going to fuck up? Don't let someone drive here unless they have a local license, it should be as simple as that. I've lived in Richmond my whole life and my neighbourhood is full of stop signs, etc... and every single day I leave my condo building within the first like 5km of my trip I will see 2-3 blatant road hazard situations from people who have NO idea how our traffic systems work or what any of the signs mean. It's ridiculous... and ICBC wonders why things have gotten unaffordable and they're losing money? Try looking at what's causing the claims maybe?

[68style]

Don't forget that in May 2018 the 3 steps back system is gone for any claims you make... they will go to a modified scale where you go back ELEVEN steps if you make any sort of claim... so a -20 rate driver under the old system would go to -17 and the rate increase would be basically nil to that person... which I am fine with, if they went 20+ years without screwing up then they can be forgiven for a bad day. As of May 2018? That -20 will drop to -9 and stay there for a few years until jumping back to -20 and cost you a tonne more on your comprehensive coverage.

It feels like we don't even really have insurance anymore. If you're a good driver and go 20 years without being at fault for anything, when something eventually does happen, you just end up paying for it yourself out of your own pocket if it's not something massive because you're too scared of what it will do to your premiums. Such a joke.

[Dragon-88]

$600 this year to insure the 125cc motorcycle and thats using 3rd party and ICBC if it was all ICBC it would be $800/yr. Now thats 1/3 of the cost of the bike @ retail pricing.. Why is it that in the states they can pay $35/yr. FML I love having toys but insurance is a bitch let alone finding places to park them when you only own two condo parking spots.

[underscore]

Originally Posted by Dragon-88

$600 this year to insure the 125cc motorcycle and thats using 3rd party and ICBC if it was all ICBC it would be $800/yr. Now thats 1/3 of the cost of the bike @ retail pricing.. Why is it that in the states they can pay $35/yr. FML I love having toys but insurance is a bitch let alone finding places to park them when you only own two condo parking spots.

I imagine the coverage is shit.

[Badhobz]

is anyone else not surprised this was announced right after they fucking cut all bridge tolls? thanks, NDP. Just pass all the costs to every single British Columbian you rat bastards.

The fact that ICBC workers still gets bonuses pisses me off even more. How the fuck are they still getting bonuses when the company is so called bleeding money and they need to increase our rates? Even their stupid ass claims adjusters get a 10% bonus along with their bullshit admin staffs.

http://www.icbc.com/about-icbc/compa...mpensation.pdf

[Lomac]

Originally Posted by Badhobz

is anyone else not surprised this was announced right after they fucking cut all bridge tolls? thanks, NDP. Just pass all the costs to every single British Columbian you rat bastards.

The fact that ICBC workers still gets bonuses pisses me off even more. How the fuck are they still getting bonuses when the company is so called bleeding money and they need to increase our rates? Even their stupid ass claims adjusters get a 10% bonus along with their bullshit admin staffs.

http://www.icbc.com/about-icbc/compa...mpensation.pdf

Because the Liberals were siphoning a good chunk of ICBC's profits in order to balance the budget. If they kept their hands out the cookie jar, it would be in far better shape.

[RRxtar]

Cost of claims has doubled from 3billion to 5.9billion from 2013 to 2017. At the same time, Revenue has rose from 3.9billion to 6.1billion. I think that is a much bigger factor than the couple hundred million the government transferred out per year.


John Horgan was the NDP energy critic before he became leader and was very outspoken about the government siphoning off capital from ICBC. lets see what happens with that. any guesses?


Also it should be noted that the Liberals stopped the transfer in 2016. It should also be noted that ICBC has been allowed to invest capital and I believe has had a higher return on that investment than the money transferred to the government.