Province announces 6.4 per cent hike to basic ICBC rates
B.C.'s public insurer is increasing its premiums as it grapples with annual losses in the hundreds of millions of dollars.
Basic ICBC rates are going up 6.4 per cent this year, while optional insurance rates will increase 3.1 per cent for the first quarter then gradually rise over subsequent quarters to a maximum hike of 9.6 per cent.
The changes will amount to an extra $57 a year for the average driver with basic coverage and $130 a year for the average driver using blended coverage, Attorney General David Eby told reporters Tuesday.
Eby blamed the hike on the BC Liberal Party, which he accused of taking a "cavalier and reckless attitude" toward ICBC's finances during its long reign in power.
"It's clear that the previous government failed to make the necessary, difficult decisions to ensure financial stability at ICBC," Eby said.
Given the state of the insurer when the NDP took over in July, hikes are unavoidable, Eby added. ICBC lost more than half a billion dollars last year, the largest annual loss recorded in its history.
Even with the newly announced increases, the Crown corporation is projected to lose upward of $300 million next year.
The 6.4 per cent hike to basic premiums is far below the 20 per cent increase recommended in an Ernst & Young report on ICBC's finances that was made public earlier this summer, but Eby said such a drastic jump would not be fair to rate-payers.
"B.C. drivers should not be made to pay for the mismanagement of this critically important public asset," Eby said.
Ernst & Young's report warned rates could have to increase 30 per cent by the year 2019 if action isn't taken; while ICBC premiums are already among the highest in Canada, they're still not covering increasing claim costs.
Eby said the new increases are only intended to mitigate some of the losses while the province enacts a number of measures designed to ease ICBC's financial burden.
Those include an operational audit of the Crown corporation, a pilot project to introduce distracted driving-reducing technology, and an initiative to identify dangerous roads and intersections.
The province is also going to start activating its existing red-light cameras 24 hours a day, instead of the current six-hour blocks.
ICBC has been struggling amid an increasing number of crashes and pricier vehicle repairs. Without significant changes, Ernst & Young projected its costs would exceed the amount collected in premiums by over $1 billion within a couple years.
The situation would be less dire had the Liberals not taken a total of $1.2 billion from ICBC's coffers between 2010 and 2016 to help balance provincial budgets, Eby noted.
Asked whether the NDP would consider outlawing those kinds of transfers, Eby said it's something to consider in the future, but not currently a good use of his bureaucrats' time.
"The cupboard is bare. There's no more money for any government to take from ICBC. That option is over," Eby said.