B.C. drivers are being forced to pay higher premiums for their ICBC basic car insurance even though a rate hike has yet to be formally approved by the province's utility commission.

The interim 11.2-per-cent rate hike was approved by the B.C. Utilities Commission in mid-December and took effect on Feb. 1. It applies to motorists who have basic vehicle insurance only and amounts to around $68 more each year.

The increase is being offset by a six-per-cent drop in optional insurance rates, which also took effect Feb. 1. ICBC says this drop will shave about $41 off the majority of drivers' insurance bills.

"With those two rate changes, for the vast majority of our customers -- more than 80-per-cent of our customers -- they'll see an average increase of around $27 this coming year," ICBC's Adam Grossman told CTV's Steele on Your Side.

There will be a formal BCUC public hearing later this spring on the rate increase application.

Grossman said currently 88 cents of every premium dollar being collected is going "straight back out the door to pay for claims," and the agency can't afford to wait until a decision is made to start collecting the additional money.

"That's not sustainable unfortunately," he said.

Like many B.C. motorists, Mill Bay resident Maureen McMahon was surprised to see the rate hike applied to her bill before it was formally approved.

"I was a little surprised, and then I became a little angry," she said.

"I think to put the burden on the taxpayer to have to pay this extra, when we're not even sure if it's going to be approved or not, that disturbs me."

ICBC says the rate hike is necessary because of rising bodily injury claims. While the number of serious crashes is down, the company says the number of bodily injury claims has skyrocketed.

In the past year alone, injured drivers have made over $3 billion worth of claims in B.C.

ICBC doesn't know why bodily injury claims are rising, but other provinces like Ontario are also grappling with the problem -- and attempting to crack down on bogus personal injury claims that are jacking up premiums for all drivers.

Rising rates and an insurance monopoly in B.C. are making many good drivers like McMahon feel powerless.

"We don't really have a say anymore. They have the final say. There's no competition, so we really have to abide and go along with it," she said.

This is the first rate increase since 2007. While B.C. has the second highest car insurance rates in the country, ICBC argues that the insurance benefits in other provinces are not as good as they are within B.C.

ICBC should know later this year if the rate is approved at 11.2 per cent. If it has to drop the percentage, drivers will be reimbursed the difference already paid – likely through a credit on their next year's insurance.

To its credit, the corporation saved $26-million last year on internal operating costs, including not immediately filling job openings when someone leaves the company. It also just announced changes to performance-related pay, meaning bonuses and incentives for the CEO and executives will decrease.

"We think it's the right move to do and especially at a time like this, it's the responsible thing to do as well," Grossman said.

Watch CTV News for a full report from Lynda Steele…

Have your say: What do you think of the rate changes?