ICBC seeks 4.9% rate hike

Photo: Contributed

UPDATE: 11:50 a.m.

An increased number of vehicle crashes in the province and the growing cost of repairs and claims are behind a push by ICBC for a hike in basic auto insurance rates.

Transportation Minister Todd Stone insists the government wants to ensure that ICBC rates remain as affordable as possible and has taken steps to do so.

“The reality is that ICBC continues to face mounting costs as a result of the frequency, complexity, and severity of bodily injury claims, in addition to higher vehicle repair costs,” Stone said in a statement. “In fact, the number of crashes in B.C. jumped from 260,000 in 2013 to 300,000 last year.

“Added to this, vehicles are more expensive to repair than ever before – vehicle damage costs totalled $1.36 billion in 2015 alone, up 17 per cent from 2014.”

Injury claims topped $2 billion for the first time in 2014 and reached $2.4 billion last year, according to government figures.

“The actual cost of these pressures would have required a rate increase of 15.5 per cent,” said Stone.

He said $472 million has been transferred from ICBC’s optional side of the business to offset some of the cost.

The Insurance Corporation of British Columbia will be seeking a 4.9-per-cent hike to its basic auto insurance rates.

The corporation has submitted its application to the B.C. Utilities Commission, with interim approval expected in early September, covering rates effective Nov. 1.

Mark Blucher, the corporation's president and CEO, says a final decision is due by the spring and ICBC estimates the increase will add about $3.50 per month to the cost of basic insurance coverage.

Blucher says more crashes, more damage to vehicles, higher repair costs and a leap in injury claims are some of the reasons for the rate increase.

He says in the past, the corporation has offset claims costs by relying on investment income but low interest rates and challenging market conditions mean that is no longer an option.

The 4.9-per-cent boost is lower than the 5.5 per cent approved in 2015, but Blucher says without internal measures, such as the transfer of $472 million from the corporation's optional insurance business, ICBC would have needed a 15.5-per-cent increase to cover 2016 costs.