The B.C. government is looking at waiving cancellations fees at ICBC as drivers grapple with whether to get rid of car insurance during the COVID-19 pandemic.
Right now, cancelling an ICBC policy comes with a $30 fee, plus $18 for new licence plates and another $15 if you pay monthly.
“A number of people — because of loss of employment — may need to put their insurance on hold or cancel their insurance, where deferrals are not enough, and we don’t want them to pay an extra fee,” said Attorney General David Eby.
“For people who are looking at potentially cancelling their insurance and restarting it, I would suggest to the extent it is possible, waiting to cancel to give us the chance to have in place a system to allow them to do that without any charge.”
But even with the cancellation fees, drivers could save a ton if they were to cancel their policies now.
If the pandemic were to drag on until the end of June, B.C. drivers would save nearly three months worth of premiums.
For example, a driver commuting more than 10 kilometres a day, with 20,000 annual kilometres and an at fault crash pays on average $2654 a year in insurance premiums commuting from Abbotsford into Vancouver.
If that driver cancelled their policy now and parked their vehicle, they would save $547 after cancellation fees and getting a new licence plate and policy at the beginning of July.
The province itself is also seeing savings from ICBC under the pandemic, but it’s unclear how much at this point.
“Risk is lower. There are fewer collisions because there are simply fewer cars on the road,” Eby said.
“I don’t think anyone pictured anything quite like this. We are still quite early in the pandemic to understand what the financial impacts are, but I have asked ICBC to report back to me on how this is effecting ICBC’s finances.”
A new law introduced by the government will ensure any savings to the system during the pandemic will eventually be passed on to drivers, Eby added.
Two insurance companies operating in the United States, Allstate and American Family Insurance, announced Monday they will give about $800 million back to their auto insurance customers because people are driving far less during the outbreak.
Allstate will refund about 15 per cent of premiums paid in April and May, for a total of about $600 million. That includes Canadian customers with personal auto insurance.
The BC Liberals are calling on the Horgan government to do something similar.
“This is the moment where ICBC and government should be offering rebates or at the very least clawbacks from the rates we are paying presently,” BC Liberal ICBC critic Jas Johal said.
The province says one of the factors being considered before looking at a rate discount is the insurer’s investments. Like so many others, the corporation has been hit hard financially by the stock markets taking a significant downturn.
Canadian Taxpayers Federation B.C. director Kris Sims said the government should allow drivers staying at home to shift to the cheaper recreational insurance without any penalties.
“We aren’t driving to and from work every day of the week, so that means they should be allowed to change insurance to recreational,” Sims said.