Following feedback from nearly 35,000 British Columbians, the B.C. government has asked ICBC to bring forward increased premium rates for bad drivers to the B.C. Utilities Commission.
If approved by the regulatory agency, there would be increases to the Driver Risk Premium (DRP) program (which includes excessive speeding, impaired driving and distracted driving) and the Driver Penalty Point (DPP) program for minor driving violations.
The increases would result in penalty amounts increasing by 20 per cent in the first year and an additional 20 per cent in the next year. The government said this will help ensure drivers are paying an appropriate amount that reflects their driving behaviours.
Once these changes have been implemented, future penalty program premium increases are anticipated to be aligned with any future basic insurance rate changes.
“Changes to our auto insurance rating system are long overdue,” Attorney General David Eby said. “The responses from the ICBC rate fairness engagement indicate the majority of British Columbians favour changes that will make insurance more affordable for low-risk drivers and see high-risk drivers pay increased insurance premiums to better reflect the risks they represent.”
Feedback from 34,277 British Columbians was collected during the ICBC rate fairness engagement survey between March 5, 2018, and April 5, 2018. There were 494 individual email submissions from the general public and seven stakeholder submissions from organizations and experts in the industry.
Eighty-two per cent of British Columbians surveyed believes drivers who are found to be at-fault in crashes should pay more. Written comments from the respondents believe the current system does not penalize high-risk drivers appropriately.
“While moving quickly to implement changes for dangerous driving, we are also using this feedback to inform additional changes in the coming months to help make rates more fair for drivers,” Eby said. “This feedback will help ensure our improved auto insurance rating system is consistent with the values of British Columbians.”
The highlights of the survey include:
- 82.3 per cent said that drivers who are found to be at-fault in crashes should pay more. Written comments indicated they believe that the current system does not penalize high-risk drivers appropriately.
- 63.5 per cent said that the option to pay back at-fault claims should be modified or eliminated entirely, while 30.7 per cent believed it should be kept the same. The most popular response (41.4 per cent) was that the option should be kept only for vehicle damage claims totalling $2,000 or less.
- 92.1 per cent indicated that the driver – not the registered owner – should be held responsible and see their premiums increase if they cause a crash.
- 74.3 per cent agreed that drivers with one serious conviction within a three-year period should pay higher insurance premiums.
- 58.7 per cent agreed that drivers with two or more minor convictions in a three-year period should pay higher premiums.
- When asked about an appropriate scan period to consider convictions, responses were mixed, with 39.3 per cent at five years, while 50.6 per cent preferred a scan period of two (21.2 per cent) or three (29.4 per cent) years. Age and driving experience had a strong influence on the responses.
- 50.6 per cent supported transition caps of 20 per cent or more annually, to phase in rate increases for high-risk drivers, and decreases for low-risk drivers. Written feedback from those who chose the 20 per cent or greater than 20 per cent transition options suggested that higher rates for higher-risk drivers are appropriate, and lower-risk drivers deserve to receive the benefits as soon as possible.
- Regarding the amount of a one-time penalty for a registered owner who did not list a driver who was found at-fault in a crash, 70.9 per cent of people chose a fee option ($250, $500 or $1,000), while a 29.1 per cent chose don’t know/no opinion. Of this, 38.5 per cent selected $250 (54.3 per cent of those who chose one of the three fee amounts)
- 46.5 per cent of respondents disagreed or strongly disagreed that distance driven should have a greater impact on insurance rates, while 38.8 per cent agreed or strongly agreed. Written comments indicated that respondents believed distance driven was a poor estimator of risk, and cited the typically longer driving distances of those who live in rural and remote areas as a reason why considering distance may be unfair.