ICBC to increase rates as bodily injury claims rise
Public Safety Minister Shirley Bond says B.C. motorists should buckle up and expect to pay more for their vehicle insurance in the coming months.
A skidding global economy and out-of-control injury claims have hit the bottom line at the Insurance Corporation of B.C. and that likely means higher rates down the road, Bond said Tuesday.
ICBC is expected to apply within days to the B.C. Utilities Commission for approval for a rate increase.
Bond said the rate increase, if approved by BCUC, will be the first since 2007.
ICBC officials said the increase will boost the average vehicle insurance premium by about $30.
"Since 2007, drivers have had the advantage of no increases, and, in fact, we saw a drop in rates," said Bond.
"The greatest pressure that ICBC is facing is as a result of a loss in investment income and bodily injury claims."
ICBC's president Jon Schubert said the corporation's net income for the first nine months of 2011 was $52 million, down from $331 million last year.
Claims costs rose to $2.47 billion, an increase of $200 million compared to the first nine months of 2010. Schubert blames bodily injury claims for most of the hike.
Current worldwide economic conditions have also cut into ICBC's investment income returns, with $341 million received this year, down $38 million over the same period last year.
Schubert said the specific details on changes to insurance rates will be revealed when ICBC files its rate increase application to the utilities commission, an independent regulatory agency that monitors natural gas and electric utilities.
"I can tell you that the impact of these rate changes on the majority of our customers -- and that's those people who purchase their full personal vehicle insurance from ICBC -- will be an average increase of less than $30 a year," he said.
Bruce Cran, president of the Consumers Association of Canada, said drivers should be furious because the provincial government has siphoned off more than $700 million from ICBC over the past two years and dumped the money into general revenue.
"I think we've all got to be wondering about whether this raise is necessary and would be necessary if the provincial government hadn't virtually stolen (money) from motorists in the province," said Cran.
"I think this is absolutely outrageous. In fact, what they should be thinking about is returning the money that they purloined."