Families will be nailed with ICBC rate hikes disguised as flat fees, critics say

VANCOUVER (NEWS 1130) – What you have to pay for basic auto insurance next year in BC could be higher if you let learners or unlisted drivers take the wheel of your car. Some critics say too many drivers will be nailed with flat fees under ICBC’s monopoly.

Those flat fees include things like a $50 premium for “unlisted driver protection” or up to $230 annually if you let someone with a red learner’s “L” drive your vehicle.

The “unlisted driver protection fee” would apply to someone who plans to lend their car to say, family, friends, neighbours or co-workers, fewer than 12 times a year. If the owner doesn’t get this coverage and someone with a worse safety record than the owner crashes the vehicle, the owner would face a steep fine.

If someone might drive the vehicle more than a dozen times a year, that driver needs to be listed on the insurance policy. That person’s driving record will be factored in when determining premiums.

The insurer plans to charge a premium for new drivers who need to display the “L” sign. The levy ranges from $130 to $230, depending on where you live.

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Kris Sims with the Canadian Taxpayers Federation says parents will be “punished” for allowing their teenager to drive their car.

“To start nailing people who have insured their own vehicles now, for years on end, with specialized fees just because they might allow their teenager to occasionally drive their car and to factor in the teenager’s lack of driving experience into the auto insurance is going to increase their rates.”

ICBC says those fees are meant to cover increased risk, but Sims says the devil is in the details — some of the changes in ICBC’s coming overhaul of premiums are simply rate hikes disguised as flat fees.

She says drivers have no choice, given that ICBC holds a monopoly of basic auto insurance.

“They should be able to shop around for other car insurance and find a lower rate, if the can. But the catch here is we’re just told by the government how much we’re going to pay for auto insurance.”

Sims makes a comparison to grocery stores. “Imagine if we had one grocery store chain in all of British Columbia — it was controlled by the government. What kind of quality produce do you think we’d actually have? The same thing with ICBC.”

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She also points out we pay the highest car insurance premiums in the country. “Our average rate is over $1,700 per year here in British Columbia, and we’re stuck with it.”

Sims says she recently spoke to a man who moved to B.C. from Montreal. “He was blown away by how much we pay for ICBC. He’s an adult, clean driving record, etc. I said, ‘What were you paying in Montreal?’ I could barely believe him — he was paying about $40 a month.”

She adds for many people, having a vehicle is mandatory. “We need our vehicles. So, for many of us, these are fixed costs.”

ICBC says proposed changes to premiums next year are designed to increase rates for the riskiest drivers, while safer drivers will see savings.

The Canadian Taxpayers Federation is pushing for co-op insurance model, where people can choose whether to stay with ICBC or a competitor.