Transportation Minister Todd Stone said Monday a potential 6.7 per cent hike to ICBC basic rates is too high but gave no indication of whether the government would reduce the dividend it takes from the public auto insurer.

ICBC may hike basic insurance rate 6.7 per cent

Soaring injury costs to drive up basic premiums at B.C.'s public auto insurer

The Insurance Corp. of B.C. is warning motorists they’ll soon pay more for basic auto insurance.

Because of a rate smoothing policy introduced by the province in 2013, this year’s rate hike must be between 3.7 and 6.7 per cent – within 1.5 per cent of last year’s 5.2 per cent increase on basic rates.

ICBC president and CEO Mark Blucher said the initial calculations suggest the maximum 6.7 per cent basic rate hike is required, but pledged to work with the government to find ways to reduce that number by Oct. 30, when the formal rate application is to be filed with the B.C. Utilities Commission.

He said ICBC is grappling with “an unexpected and rapid escalation in the number of injury claims being reported to us in recent months.”

ICBC’s bodily injury claim costs, which cover pain and suffering, future care and loss of wages, are forecast to hit $2.3 billion this year, up 64 per cent since 2008.

Higher legal and medical costs, more represented claims and more complex, catastrophic claims leading to bigger settlements are among the factors blamed for the jump.

Injury claims are up 10 per cent from a year ago even though the number of crashes is unchanged. ICBC says more fraud is one potential explanation, as well as more minor soft tissue injury claims.

If regulators approve the request, this will be the fourth straight year of basic insurance premium increases following hikes of 11.2 per cent in 2012 and 5.2 per cent in each of 2013 and 2014.

ICBC has simultaneously reduced its optional insurance rates – on which it competes against private insurers – in five of the last seven years.

ICBC spokesman Adam Grossman said the net effect is the average customer has seen their overall auto insurance costs rise by less than 10 per cent since 2008.

Grossman said this year’s required increase would actually be “on the order of 12 per cent” were it not for the constraint of the rate smoothing policy.

Transportation Minister Todd Stone said even the maximum 6.7 per cent this year is too much.

“We believe that’s not acceptable and the rate can and should be lower than that,” he said Monday.

Stone appointed ferries commissioner and former deputy minister Gord Macatee to help ICBC pare the hike.

Asked if the province might reduce the annual $160-million annual dividend it extracts from ICBC each year, Stone said those transfers are from ICBC’s excess capital on its optional insurance business and do not affect basic rates.

He acknowledged an optional rate cut would help ease the pain for the majority of motorists who also buy their optional coverage from ICBC, but made no commitment to enable that.

The Bank of Canada’s recent interest rate cut has significantly reduced the projected returns of ICBC’s investment portfolio, Stone added.

ICBC RATE CHANGES and GOV’T DIVIDENDS | Create infographics

Just Posted

VIDEO: Fire destroys historic Hitching Post restaurant in Hedley

Two people were injured as fire ripped through the Hedley restaurant around 2:30 a.m. Tuesday

RDOS supports agriculturalists to reduce burning

Regional District of Okanagan-Similkameen encourages ag properties to grind rather than burn debris

Former Kamloops sheriff caught in sex-related sting pleads guilty to lesser charge

Kevin Johnston will be sentenced on Nov. 6 for his role in communicating online with a person posing as a 14-year-old girl.

Plans for Bugnut property delayed

Plans to built an outdoor social pavilion at the downtown location of… Continue reading

Coyne “overwhelmed” with certain mayoral victory

Spencer Coyne asked Princeton to “Vote for Change.” And it did. The… Continue reading

Federal carbon tax rebates will exceed the cost for most people affected

Officials say 70 per cent of people in those provinces will get back more than they end up paying out as fuel costs rise to incorporate the carbon tax.

VOTE: Nature in Focus reader’s choice photo contest

The Penticton Western News Reader’s Choice photo contest

New rules introduced to protect B.C. foreign workers from exploitation

More than 16,000 temporary permits issued last year

Vancouver Canucks’ Elias Pettersson ‘feeling good’ after concussion

Rookie is back practising after being sidelined by Florida defenceman Mike Matheson

UPDATED: 34 rescued off whale watching boat in Georgia Strait

Tour company says vessel experienced some kind of mechanical issue

Pipeline opponents blast Trans Mountain re-approval plan

Environmental advocates, First Nations leaders say NEB review has same flaws as it had before

Opioid crisis may be shortening British Columbians’ life expectancy: report

Canada among healthiest wealthy countries, but 8,000 overdose deaths since 2016 are causing concern

B.C. cold case helps ‘60 Minutes’ explain genetic genealogy

An arrest in the 1987 double-murder of two people from Victoria was one of three examples highlighted in a segment you can watch here

Delivery of cannabis could be impacted by postal strike

BC Liquor Distribution Branch look at alternative third-party delivery services

Most Read