Victoria, British Columbia -- November 24, 2016 -- The government of British Columbia has stated that it will no longer insure high-end luxury cars. British Columbia, like Manitoba and Saskatchewan, has a public auto insurance system. In BC, auto insurance is typically purchased through the Insurance Corporation of British Columbia (ICBC), an arm of the provincial government. Going forward, owners of vehicles worth $150,000 and over will have to use private insurance instead, according to an announcement made by BC's Minister of Transportation and Infrastructure, Todd Stone.
High-end luxury cars have seen a boom in BC recently, with 3,000 of the cars insured this past year. This is a 30 percent increase compared to just three years ago. Repairing these vehicles after a crash carries a much higher cost than for a more moderately priced vehicle. Repair bills can average as much as six times higher, but motorists in BC pay similar rates. According to Stone, this effectively means that the majority of motorists are subsidizing the repairs to high-end vehicles.
“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 Stone. “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.”
A statement from the Minister's office says the government will get to work on the necessary legislative changes to have ICBC no longer insure these high-end luxury cars. Drivers will still be required to carry a certain amount of coverage to protect themselves and other drivers, but it will not be provided through ICBC’s public insurance plan.While this work is underway, government will immediately take steps so high-end luxury car owners will pay more than double for their basic insurance and ensure their premiums fully cover all costs of any repairs. These interim changes will be formally implemented as soon as possible.
|Repairs to high-end luxury vehicles average approximately six times the cost of similar
repairs made to mass-market vehicles, leading the province to conclude that the average
motorist is effectively subsidizing repairs to these cars.
The new rates will apply to private passenger cars only, and not commercial trucks, pick-up trucks, collector cars or limousines. The new rule also will not apply to recreational vehicles (RVs).
ICBC's numbers show that the average repair cost for a high-value luxury car was approximately $13,000 last year, compared to the average repair cost of approximately $2,500 for a typical private vehicle. For example, the cost for parts to repair the fender, grille, headlight and intercooler on a 2015 Bentley Flying Spur W12 was approximately $38,000. While that's even higher than the average for a "high-end" repair in BC, it's by no means the highest. It's not even in the top six, according to ICBC's list.
2015 McLaren 650S
Total repair costs: $93,574
Actual cash value (ACV / Declared value (DV): DV of $405,697
2011 Ferrari 458 Italia
Total repair costs: $88,481
Actual cash value (ACV / Declared value (DV): DV of $299,700
2016 Maserati Gran Turismo
Total repair costs: $78,999
Actual cash value (ACV / Declared value (DV): DV of $215,654
2015 Mercedes-Benz CLS63 AMG
Total repair costs: $76,796
Actual cash value (ACV / Declared value (DV): ACV of $120,952
2015 Porsche 911
Total repair costs: $76,617
Actual cash value (ACV / Declared value (DV): ACV of $158,785
2011 Rolls Royce Phantom
Total repair costs: $76,474
Actual cash value (ACV / Declared value (DV): DV of $246,500