British Columbians may have to pay 30 per cent more for auto insurance unless the provincial government makes big changes to how it runs a Crown corporation, a report released Monday suggests.
British Columbia’s attorney general is reassuring drivers they will not be on the hook for a hike in auto-insurance rates, despite a report released Monday forecasting prices could soar as much as 30 per cent without immediate and drastic action.
David Eby said such a rate increase would not happen under his watch, as he lambasted the former Liberal administration for leaving the Insurance Corp. of British Columbia in a financial mess.
“This is a very serious and a very grave concern,” Eby said during a news conference in Vancouver Monday.
“We will take the steps necessary to fix what is happening at ICBC, to make British Columbia’s roads safer for British Columbians and to ensure that rates are affordable for British Columbians, because clearly that is not where we are tracking right now,” said Eby, who is also the minister responsible for ICBC.
The report by Ernst & Young, commissioned under the previous government and leaked on the weekend to Postmedia News, says a massive overhaul to the Insurance Corp. of B.C. must happen immediately in order to avoid steep rate hikes forecast over the next two years.
“B.C.’s auto insurance system is facing unprecedented challenges,” says the report. “The average driver in B.C. may need to pay almost $2,000 in annual total premiums for auto insurance by 2019.”
The report points to a spike in the number of car crashes and a jump in the cost of vehicle repairs and injury claims as some of the main reasons for growing financial pressure at the Crown corporation. The government has also sheltered B.C. drivers for years from necessary rate increases, it says.
“This rate protection has eroded ICBC’s financial situation to a point where such efforts are not sustainable.”
The previous Liberal government directed the board of ICBC to commission the report last year, months before the May election.
The report suggests changes that include capping payments for pain and suffering, making high-risk drivers pay more, charging higher rates for luxury vehicles and bringing back speed cameras, commonly referred to as photo radar.
Eby dismissed some of the report’s proposals as non-starters, including photo radar and no-fault insurance, which directs a person involved in an incident to deal with their own insurance company regardless of who is at fault.
He also criticized the previous government for treating the Crown corporation as a “bank machine,” withdrawing money when it was convenient in order to distort the province’s overall finances to show them as healthier than they really were.
“ICBC has been careening toward a crisis over at least the last couple of years. This should have been an election issue,” Eby said.
“Our goal is to make roads as safe as possible and to make sure that rates stay affordable for British Columbians, and that’s what we’ll be doing. It was not a priority of the previous government, obviously.”
Liberal MLA Andrew Wilkinson, who served briefly as attorney general, criticized Eby for failing to outline a concrete plan to help ICBC.
“It’s time for the NDP to show some competence in office and tell us what they’re going to do,” he said of the government that was sworn in last week.
Wilkinson did not respond when asked about what responsibility the Liberal government accepted for its role in ICBC’s financial circumstances.
Published on: July 24, 2017 | Last Updated: July 24, 2017 5:46 PM PDT