By CRM staff
Toronto, Ontario -- December 17, 2018 -- Drivers in British Columbia are going to experience another increase in auto insurance premiums as the Insurance Corporation of British Columbia (ICBC) announced a 6.3 percent hike - working out to be about $60 extra each year for the average plan.
"Today's rate increase is yet more evidence that the solution to the challenges in B.C.'s auto insurance system must be found outside our Crown insurer. Under ICBC's monopoly, British Columbians pay the highest auto insurance premiums in Canada – hundreds of dollars more than nearly all other Canadians, and double what Canadians in some provinces pay," said Aaron Sutherland, vice president, Pacific, Insurance Bureau of Canada (IBC).
According to the public insurer, the escalating cost of injury claims is the single biggest factor impacting basic insurance rates, which has gone up by 43 percent in the past five years. These costs have been spurred by increased injury claim legal representation, larger payouts and the rise in large injury claims.
“The changes will come into effect in the spring, which will significantly reduce the legal costs associated to minor injury claims and provide enhanced care for people injured in crashes,” said Nicolas Jimenez, president and CEO at ICBC.
The Insurance Bureau of Canada (IBC) envisions the solution to ICBC's "dumpster fire" is to allow competition for the crown insurer and give B.C. drivers more of an option to shop around for their auto insurance.
"Opening B.C.'s auto insurance market to competition and giving drivers choice and the ability to shop around is the best way to improve the affordability of auto insurance in BC going forward," said Sutherland.
But, this isn't a new strategy as an MNP LLP report ordered by IBC, which was released at the beginning of the year, showed how a competitive market for auto insurance could reduce premiums in B.C. The report found that Canada's private insurers have increased efficiencies, developed product innovations and identified new ways to cut claims costs that could lower premiums for B.C. drivers.
"Opening B.C.'s auto insurance market to competition could save drivers up to $325 annually. Competition is a powerful incentive for any company to deliver the best service at the best price. Auto insurance is no exception to that rule," said Sutherland.
B.C. drivers also agree. A recent survey found that British Columbians overwhelmingly want increased choice in auto insurance: close to 80 percent support increased competition in the market.