B.C.’s worst drivers, those with the most at-fault crashes, will get the largest COVID-19 rebate cheques under the Insurance Corporation of B.C.’s new rebate program, CHEK News has learned.
Solicitor General Mike Farnworth announced an “average” rebate last week of $190 per driver, based on more than $600 million in savings ICBC had accumulated due to fewer crashes and claims during the pandemic. The cheques are due in March.
But a more detailed breakdown prepared by ICBC for CHEK News shows how a simple “average” distorts the fact that the biggest rebate cheques are actually flowing back to the worst drivers required to buy the most expensive insurance.
A “higher-risk driver” with three recent crashes, driving a 2015 Toyota Corolla, can expect as much as a $547 rebate if they live in Surrey, according to ICBC. The figure, however, assumes the motorist had $2 million in optional third-party insurance.
That compares to only a $95 rebate for a driver in the same vehicle in the same city with 45 years of crash-free driving and only basic insurance.
The reason has to do with how ICBC designed the rebate program.
The savings the Crown insurer accumulated due to fewer claims won’t be redistributed based on the safest driving records, but instead on a flat 19 per cent of whatever anyone paid for their insurance during the peak of the pandemic from April 1 to Sept. 30, 2020.
That means the riskiest drivers, who were forced to buy the most expensive premiums, see the most savings.
Farnworth said in a statement Tuesday that the government based the program on simply returning what drivers spent during COVID-19 in the form of rebates.
“This COVID rebate is not meant to influence driving behaviour during the pandemic, we simply believe returning these savings to drivers is the right thing to do,” said Farnworth.
The Opposition Liberals accused the NDP of hiding the true figures of the program.
“The public may have been misled thinking we had $190 coming back to us,” said Opposition Liberal critic Mike Morris.
“It does appear the high-risk drivers are getting a benefit over the average everyday driver on the road.”
In the example of the Corolla driver with recent crashes, that person was already paying more than $5,750 annually on insurance, compared to almost $1,000 annually for the crash-free driver.
Or, put another way, the risky driver was paying more than five times the amount of the crash-free driver on insurance, and so will get a rebate nearly five times as large.
The same goes for those who can afford ultra luxury vehicles.
The driver of a 2017 Range Rover, which costs almost $100,000, can expect a rebate of up to $402, with a 15-year clean driving record and $2 million in optional insurance.
The rebate for young drivers is also high, because ICBC considers them risky to insure.
That impacts a family, which could get a rebate of up to $496 if there are two parents, two children of driving age, one child had a recent crash, and everyone is swapping the keys between a 2015 Toyota Corolla and 2010 Dodge Caravan minivan. That example also assumes $2 million in optional third-party insurance and driving in Surrey as well, according to ICBC.
The disparity between rebates for high-risk drivers and those with clean records was not mentioned by ICBC, Farnworth or Premier John Horgan when the initial announcement was made last week.
Instead, the emphasis was on how 80 per cent of the 2.86 million people who will qualify for a rebate will get between $50 and $300.
The rebate cheques were an election promise by the NDP government in the October provincial election, amidst criticism some other provinces had already returned insurance savings back to drivers.
The COVID-19 ICBC rebate cheques in March are separate from other ICBC rebate and savings programs, including a switch to no-fault insurance in May, mid-term rebate cheques associated with that change and an average 20 per cent reduction in premiums expected under the new insurance system.
Morris said government should have been more upfront from the start on the rebate amounts.
“I hope whatever happens at the end of the day that we’re not rewarding bad behaviour for those drivers that are in the high-risk category that are getting a substantial amount of money back,” he said.