VANCOUVER (NEWS 1130) – ICBC won’t be asking to raise basic insurance rates by as much as expected. The provincial government has given the insurance corporation permission to dip into optional rate profits to keep the increase lower.
ICBC originally planned to apply to the BC Utilities Commission to raise rates by 6.7 per cent. The province will allow ICBC to pull $450 million from the optional side to offset the increase and lower it to 5.5 per cent. The increase would now amount to an extra $3.70 per month for the average customer.
ICBC president Mark Blucher is happy to have help this year.
“In the best interest of our customers, we have worked alongside government during the last few weeks to identify strategies to help lower both this year’s rate increase and to attempt to help alleviate the expected ongoing pressure injury claims will continue to put on insurance rates in future years.”
The insurance corporation plans to focus on fraud prevention to get costs down.
Transportation Minister Todd Stone says the same thing can’t happen next year because there’s nothing left to use.
“There will not be the capital room on the option side of the business in order to make a transfer, certainly not in the neighbourhood of $450 million… Government has done this before as recent as 2013. When the capital does build up to a point of excess on the optional side, we do consider that as a viable strategy.”
Rates have been steadily increasing for the last few years, but the government continues to take a share of optional profits each year.
Stone says going without the $160 million it was expecting this year isn’t possible. “Contrary to what many believe, it is actually used as critical dollars for the delivery of healthcare, education and other services that British Columbians have come to reply upon.”
The NDP is pointing out that rates have increased by 30 per cent since Premier Christy Clark took office. Critic Adrian Dix says that’s nearly $200 more per year for the average driver. “It reflects what they’re doing, which is shifting costs onto the middle class, onto ordinary people.”
The number of injury claims being reported to ICBC has escalated in recent months with almost 68,000 new injury claims reported between July 2014 to June 2015, that’s roughly 7,000 more than the previous 12 months.
Meanwhile, bodily injury claims costs, which cover payouts for pain and suffering, future care and loss of wages, topped $2 billion for the first time in 2014 and are expected to hit $2.3 billion this year.