WATCH: B.C. drivers will pay more for their ICBC car insurance. Some will have to pay up to 130 dollars more a year. As Mary Griffin reports, the Crown insurer is dealing with serious financial issues.
ICBC is seeking a 6.4 per cent increase to basic rates as it deals with annual losses in the hundreds of millions of dollars, B.C. Attorney General David Eby said Tuesday.
Eby said the Insurance Corp. of British Columbia (ICBC) will be proposing 6.4 per cent basic rate increase in its 2017 application to the B.C. Utilities Commission, a $57 a year increase for the average driver.
The increase is lower than the 20 per cent hike that was recommended in the Ernst & Young report commissioned by the previous Liberal government and released to the public in July.
“B.C. drivers should not be made to pay for the mismanagement of this critically important public asset,” Eby said.
ICBC will also be seeking an overall optional rate increase of 3.1 per cent in the first quarter with a subsequent quarterly increase of 2.2 per cent to a maximum of 9.6 per cent. For the average driver with basic and optional, blended rates will increase by 8 per cent or $130.
“British Columbians were deceived about the true state of our public insurer before the election,” Eby said.
“We are paying for those short-sighted decisions today.”
The B.C. government also announced new measures to improve ICBC’s operations and reduce accident rates. These include activating red-light cameras 24 hours a day, seven days a week, up from the current six hours per day and starting a pilot project to evaluate distracted driving reduction technology.
The other actions include launching an operational audit of ICBC, 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.
“We need to take drastic action to fix ICBC’s devastating current financial situation,” Eby said.
According to the recent report by Ernst & Young, B.C. drivers could see auto insurance rates climb by almost 30 per cent by 2019 unless the government reforms the basic insurance system.
The report said there were more accidents in the province and the average settlement of claims is rising, leading to increased auto insurance premiums. It also said the rate protection has eroded ICBC’s financial situation to a point where such efforts are not sustainable.
Eby said on Tuesday that legislation passed in 2010 allowed the former government to take “unprecedented levels” of cash out of ICBC. He also said after that regulation was introduced, $1.2 billion was removed from ICBc and put into the government’s general revenue.
According to Eby, ICBC had their largest financial loss in the organization’s history last year when it lost half-a-billion dollars in 12 months.
Victoria autobody shop owner, Jose Lima, says that he sees costs are increasing for everything from parts to paint.
“Some clear coat packages for makes and models of cars with higher end paint, can be up to a thousand dollars,” Lima said. “For one gallon of paint.”