The provincial government announced on Monday that ICBC’s new “Enhanced Care” coverage will save drivers 20 per cent on average — approximately $400 — on basic insurance, starting next spring.
During a press conference held on Dec. 14, Mike Farnworth, the province’s minister of public safety and solicitor general, said the Enhanced Care coverage is aimed at making auto insurance “more affordable” when it rolls out in 2021.
“A new auto-insurance system with more affordable premiums and greater care benefits is on the way for British Columbians,” said Farnworth. “If approved by the BCUC, this basic insurance rate decrease will be the largest in our province in more than 40 years. British Columbians deserve auto insurance that is affordable and takes care of them when they need it, and this is exactly what Enhanced Care will deliver.”
To support this, the B.C. government says it has directed that ICBC’s basic rate application cover the next two years, claiming this will help provide British Columbians with predictability on the basic insurance rate change through to at least 2023.
The basic rate application also sets out how ICBC will begin building a rate stabilization fund to help ensure better rate stability in the future, noted the government on Monday.
“ICBC is committed to more affordable insurance premiums and rate stability for British Columbians now and into the future,” said Nicolas Jimenez, the president and chief executive officer of ICBC. “The vast majority of British Columbians can expect to start seeing significant savings on their auto insurance in 2021, in addition to Enhanced Care refunds.”
ICBC’s application is for basic insurance rates only and will seek a 15 per cent decrease, which the vast majority of customers will receive, says the government in a press release.
According to the province, ICBC will also be reducing its optional third-party liability rates starting Feb. 1, 2021.
Customers with optional third-party liability coverage with ICBC who renew on or after Feb.1 will experience some of the savings from Enhanced Care at that time.
“Most drivers with ICBC basic and optional coverage can expect average savings of 20 per cent, or approximately $400, once Enhanced Care launches on May 1, 2021,” reads a statement from ICBC.
The government says the British Columbians will receive a “pro-rated refund” when Enhanced Care takes effect in the spring. ICBC says this refund will be calculated using the difference between a driver’s current Autoplan coverage and the new, lower-cost Enhanced Care coverage, for the portion of their existing policy that extends past May 1, 2021.
“With the vast majority of legal costs being removed from the insurance system, auto insurance will be more affordable. Enhanced Care will also provide British Columbians with significantly improved care and recovery benefits if they are injured in a crash, regardless of fault, with overall benefits of a maximum of at least $7.5 million,” says the province.
The government expects to confirm further details of the care and recovery benefits in early 2021.