Private car insurance comes with pros and cons as ICBC makes changes
Posted November 24, 2016 11:55 am.
Last Updated November 24, 2016 1:09 pm.
This article is more than 5 years old.
VANCOUVER (NEWS 1130) – Now that ICBC has said it will no longer insure luxury cars, some are discussing the possibility of whether an entirely private system is superior. The suggestion is that competition will drives prices down for consumers.
While you may look at average rates in other provinces and assume you’d get a better deal there than you do with ICBC, Chuck Byrne with the Insurance Brokers Association of BC says that actually varies depending on who you are.
If you’re a driver in your prime years, you might save, but that could change if you’re a young driver.
“Traditionally, auto insurance, regardless of jurisdiction, has been far more expensive based on actuarial evidence that younger drivers, especially male drivers under the age of 25, are the most likely to cause accidents and crashes and cause damage. And typically you have a curve where gender, marital status, is allowed to be part of the rating and it has been upheld by the Supreme Court of Canada in those jurisdictions.”
He adds it is a legitimate form of discrimination. “…Hence why that rating can still exist elsewhere. You have young males paying a lot more than you do here, young people in general paying a lot more than you do here.”
Byrne says another aspect here is your right to sue.
The system we have with ICBC allows you to sue without limitations — other provinces have restrictions on that right. “The levels of coverage, particularly with respect to accident benefits, the kind of coverage that any one injured in a crash is capable of having turned their way in support of their injuries, is the highest in Canada as far as I know at this point,” says Byrne.
While some people would save under the private system, Byrne suggests not everybody would be a winner.
ICBC says the number of claims and the cost to settle them keep climbing and that’s one of the reasons they’ve asked for a 4.9 per cent rate hike this year. That follows a more than five per cent increase last year. Transportation Minister Todd Stone says the BC government wants to make sure costs of repairing luxury cars are not impacting basic rates for drivers of cheaper ones.
According to Stone, there are about 3,000 cars worth more than $150,000 insured in BC this year, a 30 per cent increase from three years ago.
