VANCOUVER (NEWS 1130) – Basic car insurance rates will probably go up again by about 5 per cent in the fall, despite what the province says are its best efforts to keep costs low.
ICBC President and CEO Mark Blucher says there are three reasons why a basic rate increase is needed.
“More crashes, we’re getting more claims from those crashes. Vehicle claims and injury claims, both of those are up significantly as well. And we’re also getting an increase in the cost of those. The cost to fix vehicles and the medical and legal costs associated with injury claims, they’re up as well.”
Basic rates rose by 5.5-per cent last year. ICBC says the rate increase it really needs to cover all the cost increases would amount to 15.5-per cent. That would mean $130 dollars more per year for the average driver
Transportation Minister Todd Stone is laying out several steps the government has taken in an attempt to push rate increases lower.
The province has authorized ICBC to transfer $472-million from option side profits over to the basic side.
He says the government is also forgoing its annual $160-million dividend this year.
“That is one of the strategies we are embracing for this fiscal year to do everything we can to apply as much downward pressure on rates as possible. Obviously, I can’t speak to future fiscal years. Those will be decisions that will be made by the minister of finance in the months and years ahead.”
Stone also highlights strategies taken by ICBC which could lower costs. He says there is some instance of fraud in ten to 20-per cent of claims and they’re working to cut that number down.
“ICBC is now testing a new fraud analytics tool which will help it much more quickly target claims with the highest risk of fraud.”
ICBC is bringing in a new computer system as well, which Stone says could save the corporation up to $100-million per year. He adds 160 new claims staff were hired earlier this year to handle the increase in injury claims and improve customer service.
While the province isn’t taking a dividend this year, the BC NDP’s critic Adrian Dix says drains in previous years have taken a toll.
“Massive increases, misleading people about the state of the finances, Christy Clark has done something which used to be illegal and taken money out of ICBC and the consequences are what we see.”
He says ICBC’s increasing litigious approach is also increasing costs in the end.
Dix doesn’t think it’s fair to blame drivers and fraud for all of ICBC’s financial woes. “Fraud has always been a problem. It’s not hundreds of millions of dollars worse than it used to be. What’s changed at ICBC is they’ve transformed ICBC, they’ve conducted an experiment in how insurance is delivered in this province. That experiment has failed and they’re trying to cover it up until after the next election.”
The BC NDP points out the only years during which the Liberals have gone without the ICBC dividend are ones preceding an election.
LISTEN: Dix speaks with NEWS 1130 anchors Amanda Wawryk and Jim Bennie
*The number of injury claims per 100 crashes has jumped by a staggering 32 per cent over the last six years
*After a few years of relative stability, the number of injury claims reported to ICBC has increased — 67,300 new claims over the last 12 months (July 2015 to June 2016) which is 8,000 more than just two years ago
*Injury claims now cost more than $2 billion every year: The increasing number of injury claims has been exacerbated by the cost of settling these claims — totalling $2.4 billion in 2015 alone. That’s an increase of approximately $900 million over the last seven years.