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British Columbia’s government-owned auto insurer is proposing changes to the way it calculates insurance premiums to better target high-risk drivers.

The proposed changes, including a move to a model in which at-fault crashes are tied to the driver instead of the person who owns the vehicle, would be revenue neutral and would not impact ICBC’s more than $1-billion deficit. The government says if the new measures were enacted today, two-thirds of drivers would pay less.

Under the changes, which will be submitted to the BC Utilities Commission for approval and would take effect in September, 2019, high-risk drivers and those who have been behind the wheel for less than 15 years would face higher premiums.

David Eby, B.C.’s Attorney-General and the minister responsible for ICBC, at a news conference Thursday said the Crown corporation’s current model for calculating basic premiums is “broken.”

“The model ICBC uses to determine these premiums is more than 30 years old and it’s increasingly failed to ensure that drivers are held accountable for their driving habits and risk levels through their insurance rates,” he said.

Mr. Eby said under the current model, a person could have up to three crashes in a single year and still pay the same basic premium as a driver who is crash-free. “That is not fair to those who drive safely,” he said.

ICBC could not say how many drivers have had three crashes in a single year.

Joy MacPhail, ICBC’s board chair, told the news conference the message from a recent public engagement process was low-risk drivers should not be paying the same rate as some high-risk drivers.

She said it is also not fair that 80 per cent of drivers receive the maximum discount available for basic insurance.

“Eight out of 10 drivers can’t possibly have the same risk profile, especially when crashes on our roads are at an all-time high,” she said.

The province said it has directed ICBC to file its application with the BC Utilities Commission next week. If approved, premiums would be calculated based on years of driving experience, number of at-fault crashes for all drivers using the vehicle, rate class (how the vehicle is used) and territory (where the driver lives), among other things.

Based on today’s insurance rates, ICBC said 39 per cent of drivers would see up to a $50 annual payment reduction. It said 13 per cent of drivers would see a reduction between $50 and $100, and 15 per cent would see a reduction of more than $100.

ICBC said 33 per cent of customers would see increased premiums if the changes were enacted today. It said 11 per cent would see an increase of up to $50 annually, while 5 per cent would see an increase of between $50 and 100. It said 17 per cent of drivers would see an increase of more than $100.

Mr. Eby said under ICBC’s proposal, less-experienced drivers – those who have been driving for less than 15 years – would see an increase in their premiums. He said less-experienced drivers cause a disproportionate number of crashes and fatalities in B.C. and higher premiums better reflect their risks.

Andrew Wilkinson, Leader of the Opposition BC Liberals, said in a written statement the NDP government is not addressing the major problems at ICBC. He said the government should look at what’s working in other jurisdictions and implement those best practices to help lower insurance rates.

Mr. Eby has said the former Liberal government hid the financial mess at ICBC and avoided the difficult measures needed to restore its balance sheet.

Andrew Weaver, Leader of the BC Green Party, which is supporting the NDP government, said in a written statement he was pleased with the proposed changes. He said they would ensure ICBC’s rates were more closely aligned with risk.

But Kris Sims, B.C. director of the Canadian Taxpayers Federation, in a written statement said the provincial government needs to open ICBC up to competition. She said B.C. drivers need to have a choice in auto insurance and a chance to actually save money.

“Today’s announcement about good drivers versus bad drivers only tinkers with a clunker that needs a full overhaul," she said.

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