If you want to save money on car insurance, cancelling your policy could be the way to go

B.C. Attorney General David Eby speaks at a press conference in Victoria on March 27, 2019. The British Columbia government has reached an agreement that will provide a one-time grant of $7.9 million to help develop a new approach to legal aid funding, averting a withdrawal of the legal service on Monday. The Association of Legal Aid Lawyers says the agreement it has reached with the province means its members will not limit or suspend the work they do. THE CANADIAN PRESS/Chad Hipolito.

The B.C. government will not be waiving cancellation fees or getting rid of the requirement to get new licence plates if ICBC drivers cancel their insurance to take advantage of the new rate structure.

Attorney General David Eby says the public insurer is in the midst of its largest rate structure change in history and there have been some potential issues arising from the change.

Click to play video: 'Do ICBC rate changes make it worth cancelling and renewing your insurance?'
Do ICBC rate changes make it worth cancelling and renewing your insurance?

“Now that the new system is in place it is possible for someone to go to their broker and say, ‘What if I renew now and not on the renewal date to take advantage of this new system?’ And one of the implications of that, if they renew early, is they have to turn over their licence plates. We are dealing with an older computer system at ICBC,” Eby said.

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“There is not a lot we can do to avoid that. It’s just a fact of the current system and something that will be addressed down the line.”

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All insurance plans that expire after Sept. 1 will be renewed under the new rate structure. As of Aug. 20, 14,951 drivers had renewed under the new rate structure. More than 55 per cent have paid less with the average of $287 in savings per year.

Those who have seen an increase are seeing rates go up on average of $205 a year.

The rate structure is based on listing drivers. Listed drivers with little experience, at-fault crashes or road violations could lead to higher rates.

But drivers will only have access to the new rates once their plan expires or if they cancel. Cancellation comes with a $30 fee, plus $18 for new plates and an additional $15 fee for customers who pay monthly.

WATCH HERE: Major ICBC rate changes could lead to savings (Aired August 23)

Click to play video: 'Major ICBC rate changes could lead to savings'
Major ICBC rate changes could lead to savings

Brokers understand these savings may drive customers to want to see if they would save money under the new system. But doing that is complicated and will require a visit to your ICBC broker.

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“We would need to know the exact driver of the vehicle, the exact serial number. It is the only way we can put in an accurate estimation for your new policy,” said Allwest Insurance Brokers chief operating office James Beaulieu.

ICBC has just launched an estimation tool for British Columbians to see how much they will pay under the new rate structure. But the tool only works for customers with an existing policy that’s within 44 days of renewal.

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Owners will be able to save the information saved on the estimator before visiting a broker. But the customer must bring the B.C. driver’s licence number and date of birth for each driver they plan on listing.

The estimation tool will not help many drivers looking to cancel the policy in order to get a break now. ICBC is not recommending customers head to their broker on Sept. 1 to ask about how much they could save by cancelling after all the fees are added up.

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“You also have to turn in your licence plates and we do know that some people don’t want to give up their plates. So for most people it’s not an easy thing to do and for some, the costs involved may outweigh the benefit,” ICBC wrote in a fact sheet provided to Global News.

“It’s going to be a busy time for brokers and we encourage customers to wait until they receive their renewal notice to speak to their broker.”

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The public insurer explained the reason customers are required to cancel their plate is because when you cancel a policy, the licence plates are also permanently cancelled.

This situation occurs most often when people move out of province or sell their vehicle and ICBC needs to ensure the plates are permanently removed from circulation.

The rate change is obviously a different scenario for ICBC, but at this point it isn’t convinced waving the fees or not requiring new plates would help the insurer’s bottom line.

“It isn’t necessarily true that customers pay more the further they are away from renewal,” ICBC wrote in the fact sheet.

“Some pay less, some pay more – and again, it depends on their individual circumstances. And if we waive fees, everyone pays for that.”


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