ICBC's new premium rates take effect

ICBC's new premium rates take effect | Insurance Business

ICBC

The Insurance Corporation of British Columbia (ICBC) has implemented its new approach to calculating basic auto insurance premiums earlier this week.

Effective September 01, 2019, driving experience and crash history will be even bigger factors in determining the cost of insurance than before.

Under the new premium calculation approach, the premium is mainly determined by who is behind the wheel. Insurance premiums for one vehicle are 75% based on the main driver and 25% on the incidental driver with the highest level of risk.

"This is about calculating rates in a way that is more fair," ICBC business process advisor Tyler McGilvery told CBC News. "Cars don't cause crashes, drivers do."

McGilvery added that one in five crashes in BC is caused by someone who is not a registered owner, or is not the principal driver of the vehicle. But ICBC’s new premium calculation approach makes it mandatory for drivers to list anyone else who drives their vehicle on their policy.

"By asking customers to provide their drivers, we're able to more accurately rate based on the true risk of who is driving the vehicle," he said.

Read more: ICBC unveils overhauled basic insurance premium calculation

Some 1,200 BC residents have already insured their vehicles under the new premium calculation by renewing in advance. Of those drivers, about 43% saw an average increase in their premiums of $212 a year, while 56% saw an average decrease of $329 a year.