About $1,800 a year.
That’s roughly how much the former mayor of the small community of Telkwa in northwest B.C. believes area households are overpaying each year for car insurance.
“In every case, we’re basically paying double the premium of what an urban driver is,” said Darcy Repen, who was mayor of the village outside of Smithers from 2014 to 2018. “We’re getting severely ripped off.”
Repen, who also co-founded the Rural BC Party last fall, based that calculation on data from a Freedom of Information request he submitted in January to see how much people in his community pay for car insurance, compared to people in the Lower Mainland.
It’s part of his campaign to try to prove rural drivers are paying inflated insurance costs to subsidize disproportionate Lower Mainland premiums and aims to put pressure on ICBC to change the way it sets rates.
He said he received the results last week for V0J 2X0, the postal code for Telkwa’s area, and a V6A postal code in east Vancouver.
The actual average premiums are nowhere near double, but Repen has factored in the disparity based on claims cost per policies in force. For example, the average claims cost per policies in force for Lower Mainland drivers was $2,102 in 2016, compared to $769 for north central motorists.
According to the FOI data, over the last five years, V0J 2X0 residents paid about $5.5 million in total ICBC premiums more than they received in total claims.
That works out to an average of 256 per cent of Telkwa policyholders’ average annual insurance costs, Repen said, noting that with 617 registered addresses that postal code, each address is paying $1,800 more in premiums than claims each year, according to his calculations.
Repen acknowledged it’s not a precise measurement of the disparity, as not every home in the postal code has a vehicle insurance policy, and because individual insurance rates vary based on factors such as driving experience and claim history. But he believes it gives an idea of the unfairness as a whole between premiums and payouts.
“Every single one of those five years we paid more than twice as much what our claims and the other operating costs totaled.”
The data Repen received for the east Vancouver postal code indicated policyholders paid 105 per cent more on average in premiums than they received in total claims each year over the last five years.
“I would tend to think that, based on of the volume of claims, they’re actually incurring more than 25 per cent [in urban areas] and we’re incurring less.”
In a prepared statement for The Interior News, ICBC spokesperson Joanna Linsangan said the Crown corporation has no plans to revisit the issue.
“Revising insurance rate territories is a complex undertaking that would take at least 18 months and would have to include approval from the B.C. Utilities Commission,” Linsangan wrote. “Undertaking such a large project while we are undergoing the biggest reforms in ICBC’s history is not practical at this time.”
Those reforms, based on a recent comprehensive review, do include a break for Telkwa and an increase for at least some urban areas, she said.
“Starting September of this year, Telkwa residents will see a decrease of 3.5 per cent to their territory factor and the decreases will continue over 10 years, totalling approximately 30 per cent. …
“At the same time, the territory factor in some other jurisdictions – including the Lower Mainland – will be increasing.” She did not say by how much.
But Repen isn’t buying it.
“What they’re saying is at the end of the 10 years, they’re looking at a 31-per-cent total reduction. We’re paying four times as much as what we’re getting in claims, so I’m going, ‘No, you should actually be reducing our territorial rate premiums by 300 per cent.’”
He’s pushing for ICBC to proactively release postal code data for the entire province, as he awaits results on eight more FOI requests to come in a few weeks.
Linsangan did not address an Interior News request to do so.
“If they’ve done it for one postal code, then one would assume they can do it for all postal codes,” Repen said. “The pressure should be on.”