Find answers to common questions about the proposed changes to how Basic insurance premiums are set.
At this time, we’re not able to estimate how a previous at-fault crash would impact individual customer’s Basic insurance premium.
However, we’re committed to helping our customers understand and are prepared for the changes prior to implementation, September 2019.
One resource we’re looking to provide is an online interactive insurance tool to help our customers better understand how their Basic insurance premiums are set, including how previous at-fault crashes impact premiums.
The proposed model considers many factors and as a result, Basic insurance premiums would be highly personalized to better reflect the risks associated with the drivers using the vehicle.
However, customers should be aware that under the proposed model at-fault crashes would have a greater impact than they do today. We also encourage you to review some customer examples we have available.
Our current model is vehicle-based where crashes are attached to the vehicle owner. That means a person who is at-fault for a crash in a vehicle that is not insured by them, can then insure their own vehicle and be treated as if they have never had an at-fault crash. This is unfair to those drivers who have a crash-free record. Approximately 20% of crashes are caused by a driver other than the registered owner or principal operator.
A driver-based system means crashes follow the driver, not the vehicle. Under our proposed model, owners would be required to list all drivers of the vehicle, including those drivers living in the same household and any employees of the vehicle owner. Of those listed drivers, the owner would be asked to declare the principal driver of the vehicle (the person that drives the vehicle more than any other listed driver).
The majority of the Basic premium (at 75%) would be based on the principal driver, with the remaining 25% reflecting the other listed driver with the highest risk. This is a fairly common rating method that’s used in other jurisdictions around North America.
Listing all the drivers of a vehicle allows for more accurate pricing by better reflecting the risk for each vehicle and making sure drivers that have at-fault crashes are accountable for their actions.
We’re proposing to introduce unlisted driver protection – additional protection to allow for the occasional use by somebody that is not a member of the household or an employee – like a neighbour or friend. Occasional use would be defined as up to 12 times in year.
Customers would not be penalized for an unlisted driver using the vehicle in the event of a medical emergency.
If your vehicle is involved in a crash caused by an unlisted driver and you didn’t have the unlisted driver protection, you may be faced with a financial consequence based on the premium differential, up to $5,000 per claim. There would not be an insurance breach for not listing the drivers and the crash would follow the at-fault drivers.
This financial consequence ensures 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.
The objective is to make drivers more accountable for their driving behaviours and have their premiums reflect their risks.
At-fault crashes are representative of future behaviour. The data tells us that a person who has had a crash – even as far back as 20 years ago – is more likely to have another crash in the future. This new proposal would see premiums affected more significantly and for longer for those customers who cause crashes compared to the current system.
ICBC would look back at 10 years of a customer’s claims history to determine how much to charge for their insurance premium. This period is known as the scan period.
To minimize impacts, upon implementation in September 2019, we would only look back to March 1, 2017 to review a driver’s at-fault claims history. Each year thereafter, we’ll extend the scan period by one year. This means that by 2027, we would be looking at the full 10 year scan.
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.
This proposed discount isn’t about using distance to determine premiums. This is about recognizing that if your vehicle is used very rarely, it is less likely to be involved in an at-fault crash.
The people that may benefit from this could include those who live in the city and do not regularly use their vehicle, but it would also include those who don’t; those who only drive on evenings/weekends; those who use public transportation for commuting to school or work during the week; or those who have a second vehicle that is not used as often. Find out more on the Discounts and savings page.
We will begin to collect odometer information on August 23 – in anticipation of being able to offer a 10% discount for annual policies that renew on or after September 1, 2018. The discount is still subject to approval by the BCUC. A decision is expected this fall.
Customers who think they have a vehicle that may qualify for the discount will be encouraged to provide their Autoplan Broker the vehicle’s current odometer reading at their next annual renewal. Customers can do this by providing a photo of the vehicle’s odometer reading, taken within seven days, to their broker. The broker will record their mileage at that time.
At their following annual renewal in 2019, the customer will need to provide an updated photo. If the customer has driven less than 5,000 km during the year, they could be eligible for the discount. Find out more on the Discounts and savings page.
We will be working closely with our broker partners on the various aspects of this proposed change.
Yes, the low kilometre vehicle’s odometer information would need to be provided to the broker at the beginning and end of the annual policy period. Eligible customers would receive a 10% discount on their Basic insurance in the following year. Find out more on the Discounts and savings page.
We’re starting off slowly in the area of distance driven as this is new to us and we want to do it right. Pricing for rate classes, such as collector vehicles and motorcycles, already reflect low kilometres travelled as most of these vehicle are not used year round. This discount is meant for those customers who are in rate classes where the majority of the vehicles are driven longer distances. As such, we have limited it to certain rate classes.