Private insurance companies say B.C. drivers aren’t being informed of optional choices

Advocates for more public auto insurance in British Columbia are concerned auto brokers are not explaining all of the choices available for optional insurance.

With financial pressures building at ICBC, private companies are more optimistic they can compete with the public insurer. ICBC currently has a monopoly on basic insurance, but has to compete on the optional side.

“I would encourage all British Columbians when they are in the broker office just to spend a few more minutes to ask for a quote for another company to see if they can find something more affordable,” Insurance Bureau of Canada vice president Aaron Sutherland said.

6:17 Extended interview with David Eby on what the governemnt plans to do with ICBC

Optional insurance is not required to operate a vehicle in B.C.

It can include rental vehicle coverage, more a million dollars in third party liability, vehicle travel protections and other insurance add-ons.

Currently, ICBC provides 90 per cent of the optional insurance coverage in the province, compared to 10 per cent for all other companies. Drivers in the province purchase $2 billion in optional insurance every year, of which ICBC gets $1.8 billion of the business.

ICBC is required to disclose any rate increases on basic insurance and they must be approved by the independent B.C. Utilities Commission. But the public insurer is not required to disclose increases on the optional side because they are in competition with private companies.

The public insurer has lost more than $1 billion over the last two years and has been required to increase rates. The basic rates went up 6.3 per cent last year and it’s unclear how much optional rates have gone up.

Surrey resident Lisa Wager says she is an experienced driver and her rates went up nearly $400. ICBC says $300 of that is because of increases on the optional side.

“We’ve seen tremendous cost pressures on the optional side, especially over the past few years,” ICBC spokesperson Brent Shearer said.

“Those cost pressures have been driven by increasing claims, increasing legal costs, and so our optional insurance rates reflect those increasing pressures.”

Private insurers say the biggest challenge for them is having access to crash records, road safety data and driving records from ICBC. The other challenge is that brokers often don’t tell customers they have an option, or the customer doesn’t know to ask.

“There needs to be more knowledge out there for customers to ask for choice. Insurance can be $2,000 now. You wouldn’t spend $2,000 on anything and not ask and not check what else was out there,” Stratford Underwriting CEO Colin Brown said.

“It’s difficult to do business here. When you have to go to a broker to get the basic insurance, it’s easy for them to turn it into a full package.”

ICBC says drivers can retrieve their own driving records from ICBC online and take them to private insurers to compare rates.