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ICBC will stop insuring high-end luxury cars

Last Updated Nov 23, 2016 at 10:49 pm PDT

Transportation Minister Todd Stone getting a rundown on damages to display vehicles @icbc ahead of his announcement on insurance rates (Nov 23, 2016) (Hana Mae Nassar, NEWS1130)
Summary

Government getting out of the business of insuring high-end luxury cars

VANCOUVER (NEWS 1130) – Driving your Bugatti around town will likely cost much more in the near future. The BC Government is planning to stop allowing owners of luxury vehicles worth more than $150,000 to get their insurance through ICBC.

BC’s transportation minister made the announcement at an ICBC claims centre in Vancouver. Todd Stone presented two cars, one is a rare type of Ferrari and the other a 2005 Toyota Corolla. Stone says it cost $6,000 to make a repair to the bumper of the Ferrari, the same amount it cost ICBC to write off the Corolla.

As you’ve heard many times, ICBC says the number of claims and the cost to settle them keep climbing. ICBC is asking to raise rates 4.9 per cent this year. That follows a more than five per cent increase last year. Stone says the BC Government wants to make sure costs of repairing luxury cars are not impacting basic rates for drivers of cheaper ones.

According to Stone, there are about 3,000 cars worth more than $150,000 insured in BC this year, a 30 per cent increase from three years ago. He says it’s unfair to expect drivers of average cars to subsidize the cost to fix luxury cars. “Right now, whether a person drives a $25,000 Honda Civic or whether that person drives a $200,000 Lamborghini, their insurance rates are similar, while the costs of repair are substantially different… When these more expensive vehicles get into a crash, it costs approximately six times more to fix them because these vehicles are rare. They’re also built using high-end technology and much more expensive materials.”

This will take new legislation to implement, but until then, luxury vehicle drivers will pay at least double the rate of the average car owner so the premiums will cover the cost of repairs. Stone says the government will move on that change as soon as possible. Drivers of luxury cars will still be required to have a certain amount of insurance and will be expected to find that through the private sector.

There’s no word from the province on whether private insurance companies are prepared to provide basic luxury car insurance. We’ve reached out to providers and have not yet had response.

Commercial vehicles, pick-ups, RVs, collector cars and limos will be exempt.

This is one of a number of actions that government and ICBC will be rolling out over the coming weeks and months to continue to address cost pressures on rates.