ICBC seeking rate increase
Aug 30, 2013 / 7:05 pm
British Columbia's government-run auto insurance company is seeking permission to once again hike its premiums, prompting critics to question why the Crown corporation is increasing the burden on drivers as it continues to rake in hundreds of millions in profits.
The Insurance Corp. of BC announced Friday it will be asking the province's utilities commission for permission to increase its rates for basic automobile insurance — the type of insurance required by law and only available through ICBC — by 4.9 per cent, effective Nov. 1.
ICBC stressed reductions in optional coverage will mean most drivers will pay an average of $11 more a year.
The request comes after ICBC increased basic insurance rates by 11.2 per cent in 2012, then the first increase in five years.
Mark Blucher, the corporation's interim president and CEO, blamed the latest rate hike on rising costs for personal injury claims partly due to an increases in accidents involving distracted drivers, pedestrians and bicycles, and partly due to higher medical and legal costs that have driven up the average price of those claims.
"It's cumulative," Blucher said in an interview. "When you have average costs of these claims increasing as well, it doesn't take too many claims to increase the costs."
The corporation said injury claims reached $1.9 billion in 2012, an increase of more than $165 million from the previous year. The total bill for such claims in 2013 is expected to top $2 billion for the first time ever, the corporation said.
Blucher said one additional claim for every 1,000 drivers increases ICBC's claims costs by $100 million.
ICBC is asking the BC Utilities Commission to immediately approve the 4.9 per cent increase on an interim basis starting Nov. 1 while the regulator considers whether to make the new rates permanent.
At the same time, ICBC also announced plans to reduce its optional coverage, such as collision insurance, by four per cent.
Since 80 per cent of drivers in the province purchase their optional coverage through ICBC along with their mandatory insurance, the combined impact on those customers will be $11 a year, the corporation said.
For the remaining customers who only have basic insurance with ICBC, either because they purchase extended coverage from a competitor or because they simply don't buy optional insurance, their rates will increase by about $33 a year.
BC is one of four provinces, along with Saskatchewan, Manitoba and Quebec, that have public auto insurance.
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