VANCOUVER -- B.C.'s public insurer is applying for a "significant decrease" to basic insurance rates beginning next year as the province moves to a no-fault system, the government said Monday.
ICBC is asking the B.C. Utilities Commission for a decrease of 15 per cent to basic coverage, which Public Safety Minister Mike Farnworth said would be the biggest rate drop in more than four decades.
"British Columbians deserve auto insurance that is affordable and takes care of them when they need it," Farnworth said in a news release.
The decrease would last until 2023 at the earliest, according to the province.
ICBC is also reducing rates for optional third-party liability coverage starting on Feb. 1. The insurer doesn't require the commission's approval to adjust optional insurance rates.
The Ministry of Public Safety and Solicitor General has promised that drivers with basic and optional coverage should expect an average annual savings of 20 per cent, or about $400, when the province switches to its new Enhanced Care system next spring.
The government said when Enhanced Care takes effect, customers will receive a "one-time, pro-rated" refund calculated using the difference between the new rates and previous rates for policies that extend past May 1.
“Forgive us if we’re a little hesitant and cynical, but we’re going to wait and see if average drivers do actually see savings coming up this spring,” said Kris Sims of The Canadian Tax Payers Federation. “We’ve been promised savings from ICBC before, but things just get worse.”
The B.C. Utilities Commission, an independent commission from the government, must decide whether to approve the cut. It could find it’s a move the struggling corporation can’t afford to make, or it might recommend a smaller reduction.
But Nicolas Jimenez, President and CEO of ICBC, said three teams including Ernst and Young have crunched the numbers to get the math right.
“And all three parties feel that we’ve got our case solidly made,” he argued.
