ICBC has applied for a 6.3 per cent increase in basic auto insurance rates and says it could have been much higher without reforms already introduced to the insurance system.
The public insurer says it is submitting its next basic rate application for the 6.3 per cent hike to the B.C. Utilities Commission.
ICBC says in a release the increase would have been almost 40 per cent if not for major insurance reforms, aimed at reducing legal costs from claims including a limit on payouts for pain and suffering for minor injuries and a new dispute resolution model.
The corporation is projecting a net loss of $890 million dollars for its current fiscal year, saying pressure continues to grow from a record number of crashes in B.C., increasing claims volume and costs.
ICBC says increasing costs for injury claims is the single biggest factor impacting insurance rates, which it says have gone up 43 per cent over the last five years and projected to total $3.67 billion in 2018.
Last year, the basic insurance rate went up by 6.4 per cent and has gone up 27.2 per cent over the last five years.
According to ICBC president and CEO Nicolas Jimenez, rate increases are not welcome news, but it is encouraging to see the reforms have an impact with a projected net savings of $1 billion annually to the company.
“The next year will be a very important one for us – our job is to ensure our customers continue to see the benefits of these massive changes on both the rates they pay and the care and benefits they receive,” Jimenez said in a statement.
If the rate increase is approved, it will take effect April 1 and drivers will see an average increase of under $60 for basic insurance coverage.
ICBC says without the insurance reform changes, that average cost would $360.