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Experienced driver’s ICBC rate hike shows goal posts have moved for discounts

Click to play video: 'Driver hit with ICBC rate hike despite clean driving record' Driver hit with ICBC rate hike despite clean driving record
The company promised measures to put out its dumpster fire would target bad and inexperienced drivers. But as Jordan Armstrong explains, one recent renewal is raising questions about how they classify good drivers – Oct 31, 2019

Lisa Wagner is a good driver — or so she thought.

For 14 years, the full-time teaching student has never been at fault in an accident. That made her believe she’d see a discount when she renewed her ICBC insurance, her first renewal under the new rate structure.

Instead, the 30-year-old Surrey resident was shocked to find her rate went up by 18.75 per cent, adding nearly $400 to her annual bill.

READ MORE: British Columbians pay the highest on average in car insurance in Canada

“I was surprised and kind of confused how such a huge increase could happen, considering previous years I hadn’t seen that much of an increase,” Wagner said.

Under the new rate structure, drivers get a 43 per cent discount on their insurance after 15 years of safe driving experience. Under the old structure, that discount kicked in at nine years.

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But bumping that discount up to 52 per cent requires drivers to go 40 years without any blemishes on their record, with the remaining nine per cent spread out over 25 years.

Click to play video: 'Delayed overhaul of broker system contributes to ICBC dumpster fire' Delayed overhaul of broker system contributes to ICBC dumpster fire
Delayed overhaul of broker system contributes to ICBC dumpster fire – Oct 29, 2019

The structure leaves Wagner just shy of the first discount threshold — and puts the province’s argument that the new structure rewards experienced drivers into question.

“I have two part-time jobs to try to make ends meet,” she said. “And I’m just trying to get to my different destinations to work or school. And so I need a car to do that.”

No explanation was given to Wagner for the increase. She says the insurance broker who gave her the bad news also appeared confused.

READ MORE: B.C. won’t look at moving ICBC broker system online until insurer’s financial mess is cleaned up

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“He even said that he hadn’t seen such a high increase happen to somebody with a driving record like mine,” she said.

ICBC spokesperson Brent Shearer says two-thirds of Wagner’s increase comes from optional insurance. He attributes the rest to the 6.3 per cent increase to basic insurance rates that came into effect this year.

“We’ve seen tremendous cost pressures on the optional side, especially over the past few years,” Shearer said. “Those cost pressures have been driven by increasing claims, increasing legal costs, and so our optional insurance rates reflect those increasing pressures.”

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Another ICBC new driver horror story – Sep 27, 2019

Attorney General David Eby, the minister responsible for ICBC, has repeatedly said the NDP government is working to lower rates for drivers.

While those earlier promises have been made in the wake of many young drivers complaining about skyrocketing rates, Eby says change will come to experienced drivers as well.

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“We’re grappling with a pretty serious mess the previous government left us,” he said.

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

“The good news is we have other initiatives we’re working on that we expect to be bringing in that will be, in my opinion, making rates more affordable for British Columbians.”

Eby said many drivers are seeing lower rates under the new structure. Early returns for renewals prior to Sept. 1 showed a majority of drivers saw decreases.

Based on those early numbers, 8,406 people saved an average of $287 a year under the new plan, while 6,483 had their rates go up an average of $205 annually.

But Aaron Sutherland with the Insurance Bureau of Canada says Wagner’s story is proof more insurance options should be made available in B.C.

Click to play video: 'New drivers getting sticker shock under ICBC rate structure' New drivers getting sticker shock under ICBC rate structure
New drivers getting sticker shock under ICBC rate structure – Sep 24, 2019

“While it can take 40 years to get ICBC’s full discount, other insurers in Canada will give it to you in as little as 10,” he said. “That’s one of the benefits of a competitive marketplace.”

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Eby has repeatedly said the province is not looking at opening the market up to other insurers at this time, focusing instead on getting ICBC’s finances under control.

Wagner says the increase means she’ll likely have to pick up extra work shifts, making it more difficult to focus on her studies.

READ MORE: Outrage continues among new drivers forced to pay high ICBC insurance rates

It also makes the prospect of living in B.C. even more tenuous.

“I love this province. I love this city. I would love to stay here long term,” she says.

“However, it’s getting more and more difficult with all the rising costs of living, driving, gas prices. Everything is just getting too much.”

—With files from Jordan Armstrong and Richard Zussman

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