B.C.’s Transportation Minister Todd Stone has ordered an audit into ICBC billing mistakes, worth an estimated $110 million.
According to the Province Newspaper, ICBC has overcharged 240,000 drivers on optional insurance over the course of the last six years. It raked in $36 million more than it should have received.
ICBC said less than five per cent of their optional insurance customers are affected, meaning approximately 40,000 customers per year overpaid $21 a year.
“We are going to ensure all of our customers who overpaid on their optional insurance over the last six years receive full refunds with interest,” said Mark Blucher, president and CEO of ICBC. “The modernization of our systems will ensure this doesn’t happen in the future and we sincerely apologize for any inconvenience this has caused our customers.”
Stone said he has directed ICBC to fix the issue following five principles. “First, this error must not result in higher premiums. Next, I expect those who have been overcharged to be reimbursed with interest. I have also directed ICBC not to go after those who have underpaid, as it is not fair to expect them to pay retroactively for ICBC’s error. I also expect ICBC to fix its insurance management system so this error cannot happen again. Finally, I expect an outside auditor to audit ICBC’s numbers and handling of this issue,” said Stone.
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The problem relates to how vehicles were being described in ICBC’s system.
ICBC said updates to vehicle descriptions will be made in the coming months. New technology will use the vehicle identification number (VIN) provided by the vehicle’s manufacturer to automatically capture the vehicle description (make/model/type). Currently, this process is done manually.
In addition to the overcharging, Stone said ICBC is out approximately $71 million due to undercharging customers. ICBC estimated, on average, 2.7 per cent or 58,000 optional insurance customers underpaid on a portion of their optional insurance per year, which resulted in $34 a year.
“I am pleased that ICBC has engaged the Fairness Commissioner, their internal auditors Price Waterhouse Coopers, and soon an independent outside auditor to ensure accuracy, completeness, transparency and fairness,” said Stone. “It is my job to hold ICBC accountable. I will be watching this very closely to ensure that ICBC does right by the hardworking ratepayers of BC as quickly as possible.”
What will happen if you are affected:
Check with your VIN number at checkmyvehicle.icbc.com
Within 90 days, ICBC will be able to tell you if you’ve paid too much or too little.
In July 2014, letters will be sent to optional insurance customers who have an incorrect vehicle description which resulted in a financial impact. Cheques, including interest, will be sent along with the letters if you paid too much for your optional insurance.
If you have paid too little you will not be charged the difference for prior years.
Customers will receive their full entitled refund in July 2014.
In the meantime, drivers’ insurance remains valid. Vehicle descriptions for affected customers will automatically be updated when you renew your insurance, starting in July.
Vehicle descriptions apply only to optional insurance and will have no impact on rates.
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