Making rates more fair

We want to make Basic insurance premiums more fair by holding all drivers more accountable for their driving decisions and behaviour. That means drivers should pay the right premium for the risk they represent on our roads.

A month-long public consultation with almost 35,000 participants earlier this year confirmed that British Columbians believe that lower-risk drivers shouldn't be paying the same premiums as some high-risk drivers. We also want to reward safe, experienced drivers for their positive driving behaviour.

ICBC and the provincial government will be asking our regulator, the B.C. Utilities Commission (BCUC), to approve a number of proposed changes to make Basic insurance premiums more fair for everyone.

If approved, these changes would take effect in September 2019.


What will determine your premiums?

If approved by the BCUC, starting September 2019, Basic insurance premiums will be determined by a number of factors that fall under these categories: the driver, the vehicle, and discounts and add-ons.

The driver

Significant changes are being proposed to increase driver accountability. The Driver category is broken down into two factors: how long you’ve been driving (experience) and how many crashes you’ve caused (crash history).

Right now, these factors affect your premiums, but only in a limited way. In the future, these two factors would have a greater impact on your premiums than they do today.

What's changing for personal insurance (including non-fleet commercial and business rate classes)

Listing all drivers

  • You would need to list all drivers of your vehicle to more accurately reflect the risk involved.
  • With all drivers listed, the majority of your premium (75%) would be based on the principal driver, with the remaining 25% reflecting the other driver with the highest risk. This is a fairly common rating method that’s used in other jurisdictions around North America.

Crashes 

  • At-fault crashes to follow the driver, not the vehicle. ​For example, if your neighbour borrows your vehicle and causes a crash, the claim would be attached to their driving record, not yours. It’s the driver who would be accountable, not the owner.
  • We would look at a customer's at-fault crashes over the past 10 years. This is known as the "scan period." To minimize impacts upon implementation, we would only look back to March 1, 2017 of at-fault claims history. Claims older than March 1, 2017 would not be used in the new premium calculation. Each year thereafter, we would extend the scan period by one year, until 2027 when the full 10-year scan period would be in place.
  • We're proposing to update the rules around repaying a claim. Claim repayment would only apply to crashes where the total cost of the claim is less than $2,000. Currently, there are no limits on the ability to repay a claim and that allows some drivers to mask the true risk they represent.
  • We know that crashes do happen and are proposing “one-crash forgiveness”. This means we wouldn’t increase the premiums of a driver who has one at-fault claim after 20 years of driving experience, providing they haven’t caused any other crashes in the last 10 years.

Experience

Drivers with more years of driving experience and no at-fault crashes would see greater discounts compared to today.

  • Driving experience recognized for longer. The proposed model recognizes up to 40 years of driving experience whereas today, customers stop receiving additional driving experience discounts after just nine years.
  • New B.C. residents’ credit increased. We would increase the maximum credit available to new residents to 15 years, up from the current eight. To acknowledge the challenges of obtaining previous insurance documentation which is a requirement today, new residents would no longer be required to provide this. They would only need to provide proof of how long they’ve had a driver’s licence. However, new residents represent a higher risk during the first three years of driving in B.C. As a result, while new residents would receive up to 15 years of credit, their insurance premiums would reflect the additional risk they pose during their first three years driving in B.C.
  • Changes to inexperienced drivers’ discount. Under the current model, inexperienced drivers pay less than the risk they represent – their Basic insurance premiums are significantly discounted. We would continue to offer inexperienced drivers discounted premiums, however, these discounts would be reduced to better reflect the actual risk inexperienced drivers represent. Another change is how we’d treat these drivers when they consistently demonstrate risky behaviour. We would reduce that discount after their first at-fault crash and eliminate it after the second time they cause a crash within the scan period.

The vehicle

This category focuses on where you live (your territory) and how you use your vehicle (your rate class).

Today, both territory and rate class help to determine your premiums. However, these factors haven't been updated since 2010 and are based on data from 2007; a lot has changed during this time. Crash rates have increased due to traffic density, population growth and changes in infrastructure.

What’s changing?

Adjustments to the current territory and rate class model would recognize the changes in communities and vehicle use across B.C. These changes would be rolled out gradually over the next 10 years. We’ll review this information on a regular basis to ensure it stays up to date.

Discounts and add-ons

This category includes additional considerations that may apply.

Discounts 

Below are the discounts available today:

  • Disability discount. The current discount for qualifying persons with disabilities will stay the same.
  • Seniors’ discount. Seniors would still receive a discount. Also, they would benefit from more years of safe-driving discounts over their driving life – up to 40 years from the current nine years.

Two new discounts are proposed:

  • Vehicles that have original manufacturer-installed automatic emergency braking technology would be recognized with a 10 per cent discount. In the future, other technologies may also qualify for a discount if they are proven to prevent crashes.
  • Vehicles that are driven less than 5,000 km in a year would be eligible for a 10 per cent discount.

Think you may qualify for the low-kilometre discount?

If you think this low-kilometre discount may apply to you, you can provide your current odometer reading at your next annual renewal starting on August 23.

More information is available on the Discounts and savings page.

Add-ons

  • If you think you may need to lend your vehicle occasionally to a driver not listed on your policy, a new "unlisted driver protection" add-on would be available should they cause a crash. This protection is entirely optional and would be available starting at $50.

If your vehicle is involved in a crash caused by an unlisted driver and you didn’t have the unlisted driver protection, there would be a financial consequence for that. The idea is to ensure that the right incentives exist and, more importantly, that all drivers aren’t paying for the decisions that individuals make about who they lend their vehicle to.

We know that extraordinary events occur - such as an unlisted driver using the vehicle for a medical emergency - and there would be exemptions to recognize these situations.

  • If a learner will be using the vehicle, we are proposing an additional premium to recognize the risk that a learner driver represents. That said, crashes caused by the learner would not be counted against them, nor would the learner stage count towards their driver experience. The premium would range from $130 to $230.

The proposed change recognizes that they are just learning to drive and we don’t want to penalize learners for 10 years for the crashes they caused. The learner premium would help cover the costs of crashes caused by learners. These changes recognize that a learner's true driving experience starts once they are licensed - at the novice stage – and driving without a supervisor.


How will premiums be calculated?

Each insurance policy would start with a base premium of $1000.

This base premium would then increase or decrease depending on the factors within each category. This equation would then determine your highly-personalized Basic insurance premium.

    

See customer examples

Find out more with these customer examples of how premiums might change for drivers in certain situations or watch our video below.

 

 

Driver Penalty Points and Driver Risk Premiums

We’ve already taken action to improve rate fairness by asking the BCUC to approve changes to the Driver Penalty Point (DPP) and Driver Risk Premium (DRP) programs.

  • The Driver Penalty Point program applies to drivers who receive four or more penalty points in a one-year period. These points are for traffic offences such as disobeying a stop sign or driving without due care.
  • The Driver Risk Premium program applies to drivers who receive serious convictions such as roadside suspensions or prohibitions, excessive speeding and distracted driving.

The DPP and DRP programs are separate from insurance premiums – they are linked to the driver’s licence and are billed even if the driver does not own or insure a vehicle.

Once approved, the DPP and DRP amounts will increase by 20 per cent this year, and another 20 per cent next year.

These increases only apply to those who represent a higher risk and aligns with how much Basic insurance rates have increased over the past decade.