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B.C. mulls 5.2 per cent insurance hike for vehicle owners

Traffic on Highway 1 near Kensington Ave. in Burnaby, B.C., on June 2, 2014.

Darryl Dyck/The Globe and Mail

Accidents linked to distracted driving have prompted the B.C. Crown corporation that sells vehicle insurance to seek a 5.2-per-cent increase to basic rates that could add about $36 a year to customers' bills.

It will be up to the British Columbia Utilities Commission to decide whether to approve the rate application from the Insurance Corporation of British Columbia (ICBC), which announced its application plans Tuesday.

"We understand nobody likes a rate increase of any kind. We don't like to deliver that news and raise customers rates, but we need to bring in enough basic premium dollars to pay out insurance claims," Adam Grossman, an insurance-corporation spokesman, said Tuesday in an interview.

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While the commission considers the rate hike, ICBC is asking for interim approval effective Nov. 1 pending a final decision on the application.

ICBC is seeking the increase due to the rising number and cost of injury claims, which rose by $73-million between 2012 and 2013 to a total of $1.9-billion a year.

"Certainly in terms of the number of injury claims increasing, the rapid adoption and use of personal electronic devices, particularly cellphones, behind the wheel is a factor," Mr. Grossman said.

Mr. Grossman said distracted driving ranks second among causes of fatal crashes in B.C. – an average of 88 fatalities each year – and is a leading cause of rear-end crashes, which are most common for causing injuries. "Why are these rear-end crashes occurring? According to police data, the biggest factor by far is distracted driving."

ICBC plans to launch a campaign against distracted driving next week.

Mr. Grossman said ICBC's declarations are based on police data, but police attend only about 15 per cent of crashes – those serious enough in terms of injuries or fatalities to warrant their attention. He said police have said distracted driving is key to those rear-end crashes.

Speed is considered the key cause of crashes. Alcohol ranks third.

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In recent years, rate hikes have fluctuated wildly.

In 2008 and 2009, there was no adjustment in rates. In 2010, rates were actually cut by 2.4 per cent. There was no rate hike in 2011. However, in 2012, there was an 11.2 per cent increase and ICBC applied for a 4.9 per cent increase in 2013. The commission approved a 5.2 per cent increase.

Last spring, the B.C. government approved an ICBC-proposed rate framework that means rate hikes must be within plus or minus 1.5 percentage points of the previous year's rate hike – a policy Transportation Minister Todd Stone cited when asked about ICBC's announcement.

"I have been very clear in my direction to ICBC that it must continue to explore ways to help decrease claims costs and keep rates affordable and stable for British Columbians while, at the same time, allowing ICBC to meet its financial targets," he said in a statement issued by his office.

But Mable Elmore, the opposition ICBC critic, said Tuesday's announcement continues a trend of hidden tax hikes by the government of Premier Christy Clark.

"This is an effective tax increase for a government that has ruled out tax hikes," the New Democrat said. "We've seen hidden tax hikes."

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She said she wondered how ICBC could be raising rates when the corporation has been profitable and has transferred millions to the government's general revenues.

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About the Author
B.C. reporter

Ian Bailey is a Vancouver-based reporter for The Globe and Mail.  He covers politics and general news. Prior to arriving at The Globe and Mail, he reported from Toronto and St. John’s for The Canadian Press.  He has also covered British Columbia for CP, The National Post and The Province. More


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