VANCOUVER, B.C. – ICBC is submitting its next basic rate application with the British Columbia Utilities Commission.
The Crown Corporation is asking for a 6.3 percent increase to basic insurance rates; an increase which would have needed to be almost 40 percent if not for the major reforms being introduced to B.C.’s auto insurance system.
Last month, ICBC projected a net loss of $890 million for its current fiscal year, as external pressures continue to grow from a record number of crashes taking place in B.C., and the increase in claims volume and higher claims costs.
According to ICBC, the escalating cost of injury claims is the single biggest factor impacting basic insurance rates.
“Injury claims costs have soared by 43 percent in just five years; projected to total $3.67 billion in 2018 alone. These costs have been spurred by increased injury claim legal representation, larger payouts and the rise in large and catastrophic injury claims.”
Government and ICBC have responded to these challenges by putting in place major reforms to the auto insurance system in B.C. to reduce the burden that rising claims and legal costs are putting on the insurance rates British Columbians pay.
According to ICBC, B.C. is the last province in Canada to introduce some form of restrictions to address rising minor injury claims payouts. Without these changes, every vehicle owner in B.C. would be faced with an approximate $360 increase to their basic insurance rates.
“The significant reforms will reduce legal costs by introducing a limit on payouts for pain and suffering for minor injuries and a new dispute resolution model, while at the same time providing substantially increased care and medical benefits for anyone who is injured in a crash. These changes are projected to bring in net savings of $1 billion annually to ICBC, without these changes, British Columbians would be paying more for their basic insurance.”
If approved, the new basic insurance rate would be effective April 1, 2019, and will mean an average increase of less than $60 for personal customers’ basic insurance coverage.