Critics say ICBC’s payouts to repair luxury car show need for choice in insurance market
A dispute over repairs made to a luxury car is shining a light on ICBC’s ongoing financial woes.
Court documents show the insurer has already spent $789,375 in damage claims for a Ferrari F40, which accidentally crashed into a utility pole in Vancouver in 2012.
WATCH BELOW: Footage of the wrecked Ferrari after it crashed into a utility pole in 2012.
But the costs could now rise to $982,000 — far beyond the estimated cost of the car itself, which was appraised at $696,061 in 2014.
The driver has now taken the dispute to court, alleging ICBC breached its duty to carry out the work quickly and in good faith, and wants those additional costs covered.
All of which comes at a burden to B.C. taxpayers.
“It just makes you cringe,” Kris Sims of the Canadian Taxpayers Federation said. “This should be an issue between [the driver] and his insurance company of choice. But unfortunately, we’re on the hook.”
ICBC has admitted coverage and agreed to cover a majority of the costs, but argues it’s already paid enough towards the claim. The case is ongoing.
Sims says the court case not only illustrates the need for major changes to ICBC, which is dealing with a projected $1.3-billion deficit, but also highlights why giving drivers the option to choose among private insurers could be a win for both the province and taxpayers.
“A corporation that is actually caring about the bottom line would have had this dealt with efficiently and quickly, because their bottom line matters,” she said.
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Luxury cars, which ICBC defines as vehicles retailing over $150,000, are covered through higher-rated insurance premiums in order to keep costs down for average ratepayers.
But according to Attorney General David Eby, there’s concern when the driver of one of those high-end vehicles is not the one at fault in a crash.
“When someone else hits that car, and it’s covered by that person’s basic insurance, [that’s] where the costs can get out of control, so that’s something I’ve asked ICBC to address,” Eby said.
An Ernst and Young report commissioned by the Liberals last year suggested charging higher rates for luxury vehicles, among a suite of options for reducing losses at ICBC.
Eby said luxury cars are not responsible for those losses, pointing instead to a “significant” increase in everyday accidents and the resulting legal and repair costs.
The province launched an online survey last week asking the public to share their thoughts on major shifts being considered to modernize the insurer.
With files from Tanya Beja and the Canadian Press
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