The BC Government says the proposed changes will allow lower-risk drivers to pay less for car insurance, while those at a greater risk will pay more.
The Insurance Corporation of BC's current rate structure is more than 30 years old, and while Attorney General David Eby says the system was fine when it was first introduced, too much has changed for it to stay the same.
"We want to modernize ICBC so that British Columbians pay according to their crash history, driving records and level of risk, and take responsibility for their driving habits. It's only fair."
Earlier this year, Eby called ICBC a "financial dumpster fire" and a "broken system" after it lost $1.3 billion in just the 2017 fiscal year.
The province believes the proposed changes announced Thursday are a great reflection of the desires expressed by the 35,000 British Columbians who took part in a survey on basic insurance premiums.
The changes include:
- At-fault crashes are tied to the driver, not the person who owns the vehicle
- Urban drivers being considered at greater risk than those in rural communities
- Increasing insurance discounts for drivers with up to 40 years of experience, up from the current nine-year limit
- New discounts for vehicles that are driven less than 5,000 km per year
- Discounts to be adjusted for inexperienced drivers to reflect their risks
- At-fault crashes having a larger impact on insurance premiums
- An increase to the Driver Penalty Point (DPP) and Driver Risk Premium (DRP) programs of 20% in fall 2018 and 20% in fall 2019
If approved by the BC Utilities Commission, the province estimates that two-thirds of ICBC customers will benefit.
- 39% of drivers would see a $50 annual reduction in insurance premiums
- 13% of drivers would see a $50-$100 annual reduction in insurance premiums
- 15% of drivers would see more than a $100 annual reduction in insurance premiums
Eby adds that the changes will be revenue-neutral, meaning that the government is not looking to bolster its own revenues.
"The changes we are proposing are the most significant updates to how ICBC's basic insurance premiums are set in more than 30 years," says ICBC Board Chair Joy MacPhail. "When British Columbians were asked for their feedback on this topic, one message came out loud and clear - lower-risk drivers shouldn't be paying the same as some high-risk drivers. We wholeheartedly agree."
Eby hopes these changes would be in effect in early-to-mid 2019.
More details on the proposed changes can be found here.
- David Opinko / with files from ICBC