ICBC Seeking Rate Hike
ICBC has asked the British Columbia Utilities Commission to approve a 4.9 percent rate increase to basic insurance. ICBC cites in their application the same reasons that they always cite when asking for a rate increase, increased number of crashes and claims being filed. Last year ICBC raised rates by 5.5 percent. If the 4.9 percent increase is granted it will result in an average increased cost of $3.50 per month for basic coverage.
News 1130 reporting on the ICBC rate hike application quotes Adrian Dix as saying that the average one-car driver would pay about $700 less for insurance per year if the BC government did not move ICBC profits into general revenue. Dix also reportedly points to the increasingly litigious atmosphere at ICBC and the unsustainable nature of the current business model as contributing to the financial problems that the corporation is experiencing.
Another factor likely contributing to the growing financial needs of ICBC is the increased cost of vehicle repairs. Vehicles are increasingly complex and the cost of repairs reportedly increased by 17% last year alone. The growing prevalence of smart phones has also likely led to an increase in the number of car accidents. ICBC reports that distracted driving is the second leading cause of car accident fatalities in BC and that one of the most common distractions behind the wheel is a mobile electronic device.
Is the answer to ICBC’s financial woes a rate increase? Or is it taking a look at some of the contributors to the financial problem in the first place? Eliminating the transfer to government coffers which is simply a form of taxation would likely assist. As would looking at ICBC’s business model and claims handling procedures. The new distracted driving laws will hopefully work to change the culture around using a mobile device while driving which in turn will hopefully lead to decreases in the numbers of injuries caused by distracted drivers. The Utilities Commission will this fall rule on ICBC’s application.