ICBC is asking the province’s utilities commission to up basic insurance rates by 4.9 per cent, which would amount to an extra $3.50 a month on average.
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President and CEO Mark Blucher says it’s not a matter of making money, but rather handling an increase in crashes and claims.
The corporation says the increase is due to an escalation in the number of crashes, the number of claims being filed and the cost of settling the claims.
“There is absolutely nothing we like about having to ask our customers to pay more but these external pressures are very real and they have created a flawless storm which we are struggling to hold off”, said Mark Blucher, the Crown corp.’s president and CEO.
To cover those costs, ICBC says it would need to charge every customer about an extra $130 a year, which would be the equivalent to a rate increase of 15.5 per cent.
The Crown corporation said outside pressures on rates are accelerating, with the number of reported crashes going from 260,000 in 2013 to 300,000 past year.
The number of crashes has climbed 15 per cent in two years and damage claims are up 11 per cent.
“B.C.is the only province in Canada where you can sue another motorist for even a minor traffic accident”, Blucher said.
Vehicles are increasingly reliant on technology and expensive materials that have become more costly in recent years as the loonie sagged against the US dollar.
The typical driver will pay $3.50 a month or $42 a year more for basic insurance if the hike is approved.
Investment income that partly offset claims costs pressures past year has also plummeted.
The corporation has submitted its application to the B.C. Utilities Commission, with interim approval expected in early September, covering rates effective November 1.
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“It would not be right to increase our customers’ rates without first doing everything we can to hold off these rising external cost pressures”, said Blucher. That’s an increase of approximately $900 million over the last seven years.
