Making rates more fair

We want to make insurance rates more fair for British Columbians by holding all drivers more accountable for their driving decisions and behaviour.

British Columbians were invited to participate in a month-long public engagement on some changes we’re considering to improve the way Basic insurance rates are determined. Almost 35,000 British Columbians provided feedback - thank you to everyone who took the time to participate. A report of the public engagement results are posted on the B.C. Government website at engage.gov.bc.ca/ratefairness.

Overwhelmingly the feedback confirmed British Columbians believe risky drivers should pay more.

If the proposed changes are implemented, the majority of B.C. drivers (about two-thirds) would see lower Basic insurance premiums, and one-third (high-risk drivers) would see higher rates.

Proposed changes

Crashes and driving experience

Right now, driving experience and at-fault crashes are taken into account when determining rates, but only in a limited way. We believe drivers should be held more accountable because the more at-fault crashes a customer has, the higher their risk of causing another crash.

We also want to extend the discount safe, experienced drivers receive. Currently, there are no additional safe driving discounts given after nine years for Basic insurance customers and 20 years for Optional insurance customers.

Driving violations

Research has shown that drivers with convictions, particularly those with multiple or serious convictions, are more likely to have a crash in the future. Their insurance premiums should reflect this added risk.

ICBC and the B.C. government are already taking steps to further penalize people who choose to drive dangerously. But more can be done with how ICBC sets rates for high-risk drivers.

Multiple and serious driving convictions would also be taken into account when determining premiums for ICBC’s optional insurance coverage.

Additional new discounts

Drivers who use their vehicle only occasionally, or who purchase vehicles with advanced safety features, are currently not rewarded with appropriate discounts.

Customers who drive their vehicles less than 5,000 kilometres per year will receive a discount to reflect the reduced risk they pose. Drivers who purchase vehicles with an automatic emergency braking system – a safety feature proven to reduce crashes – will also receive a discount.

Location and vehicle use

Where you drive, and what you use your car for, helps to determine what you pay in insurance. However, the data ICBC uses for this is over 10 years old. It hasn’t been updated to reflect changes in things like population density, commuting patterns and other factors which affect the risk of getting in a crash.

We’ll be updating this data to more accurately reflect the risks associated with location and vehicle use today.

Next steps

The B.C. government and ICBC will be considering the feedback during the coming months in order to design an improved auto insurance rating system. The feedback will also help inform ICBC’s application to the BCUC on Basic insurance rate design, which will be submitted later this year.

Overwhelmingly the feedback confirmed British Columbians believe risky drivers should pay more. As a first step to improve rate fairness, government has asked us to bring forward to the British Columbia Utilities Commission (BCUC) increases to the premiums of the Driver Penalty Point (DPP) and Driver Risk Premium (DRP) programs to be ready for implementation as early as this fall. In line with one of the proposals we put forward and once approved by the BCUC, these changes will result in DPP and DRP amounts increasing by 20 per cent in the first year, and 20 per cent next year.

On April 23, 2018, government introduced legislation that will provide the framework for an improved auto insurance rating system which will make drivers more accountable for their decisions and driving behaviours.