ICBC is asking the B.C. Utilities Commission for a rate hike of 4.9% on basic car insurance.
It says that translates into an average increase of $42 a year, or, $3.50 a month.
President and CEO Mark Blucher says it’s not a matter of making money, but rather handling an increase in crashes and claims.
“We also have the costs of those claims actually escalating as well, so the costs of repairing vehicles and the legal costs associated with injury claims, combine those three things together, even with all of the mitigation we’re doing, we are needing a rate of 4.9%.”
Last year’s increase was 5.5%.
Blucher says if green lit, the rate would go into effect on November 1st.
Could have been higher
Transportation Minister Todd Stone says the actual increase needed to offset increases is 15.5%, but ICBC is taking $472 million from its operations side.
The increase, allowed under their current framework, could have gone up by 7%.
“It’s less than last year and does represent an increase that’s on the lower end of that rate smoothing scale.”
Stone was also asked if the B.C. government would be extracting its annual $160 million dividend.
“I can confirm on behalf of Government that we will not be provided a dividend for this current fiscal year”
But NDP ICBC critic Adrian Dix says the Liberal government is playing politics with the public insurer.
He says in 2012, the province used the same tactic, forgoing a dividend from ICBC in order to soften insurance rates in an election year.
And he says the government isn’t being honest about the “true state” of ICBC.
“Is a failure to get through claims, to pay out claims, so the number of unpaid claims keeps rising, which is a huge pressure on rates. It’s also an indication of the problems they are having delivering front-line service.”
He says front line service has been replaced, in some cases, with a computer system that isn’t working that well.
Dix says the Liberal government has transformed ICBC from a non-profit insurer into a Liberal experiment in collecting profit.