If you own a high-end, luxury vehicle worth more than $150,000 you’ll soon have to acquire your car insurance through a private insurance company.
The Government of British Columbia announced the changes Wednesday, saying they will begin work on the necessary legislative changes so the average ratepayer no longer subsidizes the cost of fixing these pricey performance vehicles. Current legislation that requires drivers to still carry a certain amount of coverage to protect themselves and other drivers will not change, however, it will no longer be provided through ICBC’s public insurance plan.
“Right now, whether a person drives a $15,000 Honda Civic or a $300,000 Ferrari – their basic insurance premiums are similar. If owners of high-end luxury cars can afford a high-priced car, they certainly can afford to pay higher premiums to cover the real cost for their repairs,” said Todd Stone, Minister of Transportation and Infrastructure.
“This policy needs to be fair for all British Columbian ratepayers, and we want to ensure that the regular everyday driver is not paying for the additional repair costs of these cars through their insurance rate.”
With the high-end luxury car market growing by 30 per cent over the past three years in B.C., there was a need to address the rising costs of repairs before they added any additional pressures to already rising insurance rates.
ICBC has already outlined the hypothetical possibility of steep rate hikes for basic auto insurance following news that the crown corporation had applied to the BC Utilities Commission for a 4.9 per cent this year. Further projections could see rates compounding to more than 42 per cent.
The government has hinted that interim changes would see luxury car owners charged double the current amount for their basic insurance costs and also ensure their premiums fully cover the cost of any repairs.
Data from the province shows the average private vehicle is worth $15,000 or 10 times less than the growing number of luxury high-end cars in B.C. (worth $150,000 and above). When these expensive cars are involved in an accident, it costs approximately six times more to fix.
The new rates would only apply to private passenger cars, and not commercial trucks, pick-up trucks, collector cars, limousines or RVs.