The Insurance Corp. of B.C. is applying for a 15 per cent rate decrease for its monopoly basic vehicle insurance as the B.C. government’s changes to eliminate most of the costly lawsuits against the province’s auto insurer take effect next year.
Public Safety Minister Mike Farnworth says the rate cut, subject to approval of the B.C. Utilities Commission, will be a substantial step to delivering on a promised 20 per cent reduction in insurance costs. ICBC is also cutting its optional insurance rates starting Feb. 1, 2021, and the rate reductions should start showing up on ICBC renewals.
ICBC got approval for a 6.3 per cent rate increase in January 2019, the latest increase as the province prepared to bail out the corporation with $1 billion to cover a deficit caused by ballooning crash and injury awards and court costs.
The new injury coverage, which the government calls Enhanced Care, takes effect on May 1, 2021. When it takes effect, ICBC customers are told to expect a one-time refund.
“It will be calculated using the difference between a driver’s current Autoplan coverage and the new, lower-cost Enhanced Care coverage, for the portion of their existing policy that extends past May 1, 2021,” Farnworth and ICBC president Nicolas Jiminez said Dec. 14.
Farnworth was assigned responsibility for ICBC with the formation of the new majority NDP government, after Premier John Horgan and Attorney General David Eby pushed through the changes over the objections of the Trial Lawyers Association of B.C. Eby first moved to limit expert witnesses in injury cases, prompting a legal challenge.
Horgan and Eby have rejected the lawyers’ description of the new system as “no fault,” pointing out that people can still be sued in some circumstances.
“You can’t run into someone without consequences,” Horgan said in announcing the new system in February 2020. “Your rates will go up. If you are found criminally responsible or criminally negligent, you can be sued.”