With both the number and cost of auto claims rising, ICBC is looking to increase the insurance rates of its basic coverage by an average of $3.50 monthly.
The insurer is requesting the British Columbia Utilities Commission to approve a 4.9% rate increase, claiming that "external pressures" on insurance rates in B.C. are "accelerating." ICBC filed an application for the rate hikes yesterday, reported
CBC News. If the rate changes are approved, they come into effect Nov.1.
"We certainly don't like to have to ask our customers to pay more but these external pressures are very real and they have created a perfect storm which we are struggling to hold off," said ICBC president and CEO Mark Blucher in a statement.
Last year, ICBC increased its rates by 5.5%.
Blucher underlined that the number of vehicle crashes across B.C. surged by 15% between 2013 and 2015. He also noted that damage and injury claims are also up over 10% since 2012. Similarly, he pointed out that the costs of repairing automobiles as well as the legal and medical costs of settling claims have also risen.
ICBC would realistically need to raise its rates by 15.5%—an extra $130 a year per customer—to offset the increased costs, Blucher said.
According to B.C. minister of transportation and infrastructure Todd Stone, the provincial government has ordered ICBC to transfer $472 million in income and capital from its optional insurance business to its basic insurance unit to make up for the deficit.
"Not only will these transfers help apply downward pressure on basic rates, they will also help to rebuild ICBC's basic capital," Stone explained.
Stone also mentioned that ICBC is not allowed to raise or lower its basic rates by more than 1.5%.
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