B.C. says insurance rates to go up by 4.9 per cent as affordability is reviewed
Howard Alexander - News Editor
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December 19, 2016 - 8:00 PM
VICTORIA - Those who insure their vehicles in British Columbia will see a rate increase for basic insurance of 4.9 per cent.
The provincial government has directed the B.C. Utilities Commission to approve the rate for next year for the public auto insurer, but it wants to make sure that in the long term, the rates are in line with inflation.
Transport Minister Todd Stone told reporters in a conference call that he acknowledges an increase of nearly 5 per cent year-over-year is not affordable for most families.
"I've heard the message loud and clear that people are worried about the increasing cost of living," he said.
The minister announced the government has launched a third-party review to make recommendations that will keep auto insurance rates affordable in the long term.
Stone said the goal is to put British Columbia drivers first and for the Insurance Corp. of B.C. to manage its cost pressures and bring rate increases closer to the inflation rate.
He said the review will look at the entire spectrum of the insurer's operations to come up with as many solutions as possible for reducing cost pressures.
"We can't keep doing things the same way and expect a different outcome, so we're prepared to change," Stone said.
The minister said the government does not intend to move to a privatized model of insurance through this review.
The insurance provider has already begun the process to prepare for the review, and the third party is expected to be selected in the new year.
Stone said the aim is to have results of the review ready by early next summer to be able to effect the insurance provider's next round of rate filing that is due in August.
The third-party review comes as the frequency and severity of injury claims jumped, while the average cost of vehicle claims increased by 17 per cent between 2014 and 2015.
The province announced earlier this year that it would be doubling basic premiums for high-priced luxury vehicles and clamping down on fraud with a new detection tool.
ICBC is the province's public auto insurer and almost all drivers in the province must purchase basic auto insurance for their vehicle through the corporation.
News from © The Canadian Press, 2016