British Columbia's government is overhauling the way auto insurance rates are calculated to better reflect the level of risk a driver poses on the road.
“Right now, the system is broken. A driver with no crashes could be paying the same premium as a driver with three at-fault crashes in a year," Attorney General David Eby said during an announcement in Victoria Thursday.
“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."
Key features of the announcement include the shift to a driver-based model that will see the operator of a vehicle—not necessarily its owner—held accountable in the event of an at-fault collision.
Around 80 per cent of drivers are currently eligible for the maximum discounts under the Insurance Corporation of British Columbia, a situation officials say doesn’t reflect the reality on the roads.
Discounts for seasoned drivers will be extended to reflect up to 40 years of experience, up from the current limit of nine years. Insurance rates for inexperienced drivers will also be adjusted to represent the greater risk they tend to pose.
Similarly, at-fault accidents will have a larger impact on a driver's premiums than they currently do, but one at-fault crash will continue to be forgiven over a period of 10 years.
New discounts will be made available for those with manufacturer-installed automatic emergency braking systems in their vehicles as well as those who drive fewer than 5,000 kilometres a year.
One of the first impacts that British Columbians will feel is that if a driver gets a ticket or a serious traffic conviction, related penalties will go up 20 per cent this fall, and another 20 per cent in fall 2019.
According to Eby, about two-thirds of drivers will see lower premiums as a result of the changes. The rest will pay more.
During the announcement, he said 39 per cent of B.C. motorists will see reductions of up to $50 a year, while 13 per cent will save between $50 and $100. Fifteen per cent of drivers will see more than $100 in savings.
The other 33 per cent of drivers, however, could pay significantly more. Five per cent of those deemed at an increased risk of causing a crash will pay between $50 and $100 more while 17 per cent will see their premiums rise by at least $100.
Learners will pay an extra premium between $130 and $230 a year, depending on where they live.
All drivers will have to be listed on the vehicle’s insurance, with 75 per cent of the premium calculated with the principal driver, and 25 per cent with a highest risk driver. Lending your car to someone will require purchasing unlisted driver protection insurance.
ICBC will apply for further changes from the BC Utilities Commission, with the expected changes to take place in September 2019.
A "transition cap" will limit how much a driver's premium can change from year to year, Eby said, but most drivers will see the full impact of the new model within three years of implementation.
Geography will also become a bigger factor in how rates are calculated, meaning people who live in denser areas such as cities are likely to pay more. That’s going to be determined using current data, rather than the 10-year-old numbers the agency is currently using.
And depending on how much of role location plays in ICBC's new pricing formula, the move could make a significant difference for some.
According to numbers obtained by CTV News through the Freedom of Information Act, those living in the Fraser Valley and eastern parts of Metro Vancouver are currently costing the insurance provider more money in payouts per per capita than any other part of southern B.C.
Surrey and Mission top the list with a per-capita cost of more than $1,300 a year.
Those in Langley, Maple Ridge and Abbotsford are costing ICBC at least $1,000 per person. Further west, Burnaby, New Westminster, Port Coquitlam and Coquitlam also fall into that category.
At the other end of the spectrum, the per capita cost for those living at the University of British Columbia is the lowest by nearly $300 at $464.76 per year. The District of North Vancouver is second-lowest at $752.76. The City of Vancouver comes in at $847.43
The cost in West Vancouver, Chilliwack as Richmond is between about $800 and $1,000 per capita. The same goes for Port Moody, Pitt Meadows, Delta and White Rock.
It's unclear, however, exactly why those living further east tend to receive more money from ICBC—whether it's because more people are driving, drivers are spending more time on the road or the routes they take are more dangerous depending on where they live.
These numbers don't reflect where incidents that lead to claims are more likely to occur either.
Eby said ICBC's 30-year-old pricing model has "increasingly failed to make sure that drivers are held accountable" and accused the province's previous Liberal government of failing to take timelier action to make premiums fairer for British Columbians.
The changes announced Thursday stem from an online survey conducted earlier this year asked B.C. residents what changes they'd like to see in the way rates are calculated. More than 82 per cent of its 35,000 respondents said they felt risky drivers should pay more.
That sentiment was echoed by drivers on the streets of Vancouver Thursday as they learned about the incoming changes to ICBC's system.
"I love it. I've got a clean slate, so it's time to get rewarded," said Ernie Yee.
The Canadian Taxpayers Federation said it agrees in principle with the revamping, but remains skeptical about the province's promise to ease the burden on good drivers.
"Those are really numbers that we need to take a good, hard look at because as of right now, today, B.C. drivers pay the highest auto insurance rates in all of Canada," said Kris Sims, the federation's B.C. director.
Sims said the federation still believes that the only way fully ensure British Columbians are paying a fair price for auto insurance is to end ICBC's monopoly.
"While we're happy to hear, on the surface, that good drivers will pay less and bad drivers will pay more, we want to see serious numbers here and we urge the province to open ICBC up to competition," she said.
Sims, however, would not answer questions about how much money, if any, the CTF receives from private insurance companies that could have an interest in auto insurance being de-centralized in the province.
The changes come as the government works to help ICBC recover from what Eby has called a "financial dumpster fire" that's projected to cost the Crown corporation some $1.3 billion by the end of Q4.
But the attorney general said the changes are "not about increasing revenues."
“British Columbians have told us they expect the premiums they pay to be fair,” he said.
Several changes had already been introduced prior to Thursday's announcement, including legislation that would limit pain and suffering payouts on personal injury claims to $5,500.
With files from CTV Vancouver's Jon Woodward and The Canadian Press