May 4, 2019 12:37 am
Updated: May 4, 2019 5:26 am

Online auto insurance sales and renewals on the way for B.C., attorney general says

WATCH: B.C.'s attorney general says ICBC is looking at introducing online auto insurance sales and renewals, but the system would still be run through brokers to keep costs down. Jordan Armstrong reports.

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B.C.’s attorney general is promising auto insurance sales and renewals will eventually be a click away, but won’t give a timeline for when drivers might see the change.

David Eby confirmed ICBC is looking into online purchases during a Reddit AMA on Friday, where he answered two queries into whether the province will modernize the sales process.

“Online renewals and purchasing is coming, just as soon as we stop the major bleeding and repair how rates are set,” Eby responded to one user.

WATCH: (Aired March 30) ICBC changes kick in April 1 for minor injury claims


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But when another user suggested moving sales and renewals online could cut out Autoplan brokers that make hefty commissions paid out by ICBC, Eby shut that down.

“If ICBC sold direct online without brokers they’d need to set up call centres, etc., so that’s a bit of a caution for me,” the attorney general wrote. “Brokers help ICBC externalize a lot of costs.”

READ MORE: ‘Massive changes’ at ICBC could fundamentally reshape the public insurer

In an interview with Global News Friday, Eby said ICBC plans to start looking at the issue in the fall, once more changes meant to curb massive cost overruns at the public insurer take effect.

“They were working on it as I understand it before the government shifted and we decided to focus on the big holes in the side of the ship,” he said. “But once we get things under control at ICBC financially, we will be working with our insurance broker partners on delivering online insurance.”

April 1 saw the introduction of major changes that are expected to save ICBC more than $1 billion, after the insurer reported it was set to lose that same amount this year.

Those changes include a limit of $5,500 on pain and suffering payouts for injuries that fall under the minor injury definition and a new independent dispute resolution process to help settle injury claims.

WATCH: (Aired Jan. 8) Exclusive documents raise questions about ICBC broker fees

September will see even more changes that will both increase costs for high-risk drivers and reduce them for low-risk drivers, Eby said, which will ideally free up time for staff to focus on setting up online sales.

Eby said those sales would still be facilitated through brokers, who would set up their own online systems in collaboration with ICBC. That would still be the cheapest option he said.

“If people need to contact someone in person to exchange information there would need to be remote offices set up, so there are additional staffing costs that come with that,” Eby said.

READ MORE: Auto insurance brokers receive nearly 20 per cent commission when safest drivers get optional insurance

At least one person who asked Eby about online sales during the AMA suggested setting up a central online system would cut out the “middle men” of brokers, who earn large commissions paid by ICBC on insurance packages.

Global News obtained documents in January that showed brokers can receive nearly 20 per cent commissions on optional insurance packages, depending on risk factors posed by drivers.

Those commissions, which differ from those for basic insurance packages, total about $334 million per year.

Eby said those commissions fall well below those in private insurance markets like Alberta, and the higher rates for optional insurance is meant to encourage brokers to sell ICBC product over private packages.

READ MORE: ‘Far and away expensive’: Auto insurance brokers charged ICBC $434 million in commissions last year

“Everything is on the table in terms of cost savings,” he said. “The biggest cost savings we’re chasing right away, and any issues with brokers we’re doing pretty well compared to other markets right now.”

Online insurance sales are available in most other provinces, many of which operate within the private model. Eby said he understands people’s frustration about not being able to do the same in B.C., but said getting the financial mess at ICBC settled first is the top priority.

“We were left with a pretty big mess, and we’re slowly starting to clean it up, and then we’ll be able to do the work to get ICBC into the future.”

With files from Jordan Armstrong and Richard Zussman

© 2019 Global News, a division of Corus Entertainment Inc.

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