Call revived to end ICBC car insurance monopoly

Call revived to end ICBC car insurance monopoly

Private insurers advocate for access to vehicle insurance marketplace

Poor driving habits of British Columbians are leading to more accidents while ICBC is drowning in annual financial losses despite having a monopoly on the auto insurance industry.

Both of those factors generated different reactions in recent weeks from those with a stake in B.C.’s auto insurance industry.

Aaron Sutherland, vice-president, Pacific region, for the the Insurance Bureau of Canada, renewed his organization’s call to open up the car insurance business to the private sector, saying ICBC’s monopoly has led to complacency in developing new insurance products to reduce rising premiums.

“When competing for your business, companies must continually innovate, develop new products and endlessly strive to deliver the best possible service because they have to or they won’t survive. It is not rocket science,” said Sutherland in a news release earlier this month.

“Opening up B.C.’s auto insurance marketplace is the best way to ensure drivers receive the best insurance product at the best price.”

Meanwhile ICBC is looking to direct more funding to police enforcement, generating the funds for new initiatives by cutting its advertising budget in half.

In the 2019-20 fiscal year, ICBC will spend an additional $2.4 million for enhanced traffic enforcement across the province, raising the Crown agency’s annual investment in road safety to $24.8 million.

That is in response to last year, where 350,000 auto crashes were reported in B.C., a record high.

In an interview with Black Press, Sutherland said there is no connection between privatizing auto insurance and B.C.’s spiralling accident statistics.

“ICBC’s problems are not just about the accident rate. We are on par with the Canadian average. The problems you see in Kelowna with road safety are no different than in Kitchener (Ontario),” Sutherland said.

“With ICBC being a monopoly, it has been slow to respond in the marketplace with innovative or new products to help address these challenges.”

He acknowledged car repair costs have skyrocketed over the past decade, due in part to technology features being added to vehicles.

“Ten years ago, replacing a car bumper was a pretty routine thing to do, but today it costs $10,000 because of the technology equipment now involved with a bumper.”

Sutherland argued penalties for bad driving and incentives for good driving habits are lacking in ICBC’s insurance options, noting significant increases Attorney General David Eby warned B.C. drivers about earlier this year are not prevalent elsewhere in private insurance marketplaces.

He noted a survey commissioned by the Insurance Bureau revealed in January a potential savings of up to $325 for drivers by bringing competition into the B.C. auto insurance marketplace. He said it shouldn’t be surprising surveys have indicated up to 80 per cent of B.C. drivers want more insurance options.

ICBC was originally created by the NDP government in 1973 in response to several factors—the high cost of accident litigation under private insurance at the time, motor accident cases were plugging up the entire legal system and large numbers of uninsured motorists, especially young drivers, were being refused insurance by private operators.

“A lot has changed, particularly in the rural areas of the province, in the auto insurance market. What made sense 50 years ago may not make sense today,” Sutherland said.

“That’s why it is now best to improve the system and bring the most value to bear you have to consider all the options. One of those is seeking solutions outside of ICBC by bringing the best practices of private auto insurance across North America to improve auto insurance affordability.”

Paul Hergott is a West Kelowna lawyer is specializes in ICBC accident claims and is a long-time advocate in the Okanagan for enhancing safe driving practices.

From a lawyer’s perspective, he said fighting ICBC, or a private insurer, in court on behalf of his accident-victim clients involves the same legal process.

But Hergott cautioned the private insurance industry doesn’t have the same incentives to promote road safety ICBC has, and rewarding drivers with no claims doesn’t resolve what he points out is an alarming escalation in traffic accidents.

In the years leading up to 2010, the accident numbers were on the decline year over year, falling to 260,000 in 2010. That all began to change by 2014, when 280,000 crashes occurred, peaking this year at 350,000.

Hergott feels there is a direct connection between that accident increase and the provincial government’s policy decision to ban drivers from using hand-held technology devices while operating a vehicle, but allowing access to use of hands-free technology.

“That has been my mantra and as much as people are probably tired of me talking about it, stepping up enforcement with RCMP to catch people using hand-held devices does absolutely nothing for road safety because people just switch to hands-free technology,” he said.

“From a driver’s distraction perspective, both are equally bad but this government policy has in effect said it is okay to multi-task behind the wheel just like we do with everything else.

“By jacking up the penalties for hand-held device tickets, you are only really taxing those who can’t afford hands-free technology. If we could all afford it, we’d all have hands-free cell phones in our vehicles and how does that enhance road safety?”

He said auto insurance premiums should reflect poor driving habits, creating consequences for drivers who are inattentive when driving, but instead ICBC has chosen to focus on victims’ rights, imposing limits on injury claim costs.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Prince Rupert’s Bobby Brown celebrated his 95th birthday milestone on March 5 with family across the country in an online celebration. (Photo: supplied by Jodi Brown)
Prince Rupert man celebrates 95th birthday milestone online

Five generations come together COVID-19 style in Prince Rupert to say “Happy Birthday”

Main door at Cranes Crossing, Prince Rupert’s homeless shelter, on March 5. Northern Health issued a public notice of potential exposure occurring at the shelter between Feb. 22 and 24. (Photo: K-J Millar/The Northern View)
COVID-19 Public Exposure Notice issued for Prince Rupert’s homeless shelter

Northern Health said possible exposure between Feb. 22 and 24

Air Canada cancelled flights to Prince Regional Airport on Jan. 23, 2021 due to loss of ridership during COVID-19. An Air Canada Rouge takes off from Montreal in March 20, 2020. (THE CANADIAN PRESS/Graham Hughes)
BC Liberals call for immediate action and support for B.C. airports

Prince Rupert Regional Airport and others across the province struggle with COVID-19 effects

Paul Williams rector of St. Andrews Cathedral in Prince Rupert sits in front of the 95-year-old pipe organ on March 5. The church has put out a community call for volunteers to play the instrument to keep it fresh and operational. (Photo: K-J Millar/The Northern View)
St. Andrews Cathedral pipe organ needs players to make it sing

Prince Rupert volunteers who want to practice their playing skills are welcome

Alex Campbell, Velna Nelson, Beatrice Robinson and Ellen Mason take part in the Sm’algyax Word App and website launched by School District 52 on March 1. (Photo: Supplied by Roberta Edzera)
Prince Rupert SD 52 launches new Sm’algyax word app and website

Database for new language resources stems back more than 30 years

The James C Richardson Pipe Band marches in a Remembrance Day parade on Nov. 11, 2019 in Chilliwack. Wednesday, March 10 is International Bagpipe Day. (Jenna Hauck/ Chilliwack Progress file)
Unofficial holidays: Here’s what people are celebrating for the week of March 7 to 13

International Bagpipe Day, Wash Your Nose Day and Kidney Day are all coming up this week

Victoria man Brett Andersen is asking for people’s help to secure him one of eight free tickets to the moon. (Screenshot/@brettandersen Instagram)
Victoria man wants your help securing a free ticket to the moon

Japanese billionaire offering eight people a trip to the moon

The Conservation Officers Service is warning aquarium users after invasive and potentially destructive mussels were found in moss balls from a pet store. (BC Conservation Officers Service/Facebook)
Aquarium users in B.C. warned after invasive mussels found at pet store

Conservation officers were told the mussels were found in a moss ball from a Terrace pet store.

Hockey hall-of-fame legend Wayne Gretzky, right, watches the casket of his father, Walter Gretzky, as it is carried from the church during a funeral service in Brantford, Ont., Saturday, March 6, 2021. HE CANADIAN PRESS/Nathan Denette
Walter Gretzky remembered as a man with a ‘heart of gold’ at funeral

The famous hockey father died Thursday at age 82 after battling Parkinson’s disease

Donald Alan Sweet was once an all star CFL kicker who played for the Montreal Alouettes and Montreal Concordes over a 13-year career. Photo courtesy of Mission RCMP.
Ex-B.C. teacher who was CFL kicker charged with assault, sexual crimes against former students

Donald Sweet taught in Mission School District for 10 years, investigators seek further witnesses

During a press event on March 6, Const. Alex Berube, media relations officer for the West Shore RCMP, addressed a deadly shooting that occurred in Metchosin the night before. (Devon Bidal/News Staff)
VIDEO: One man shot dead on Vancouver Island in ‘targeted incident’

Highway 14 reopens following multi-hour closure for investigation

Personal protective equipment is seen in the COVID-19 intensive care unit at St. Paul’s hospital in downtown Vancouver. THE CANADIAN PRESS/Jonathan Hayward
$16.9 million invested to improve worker safety, strengthen B.C.’s food supply chain

Money to be used for social distancing, personal protective equipment, cleaning, and air circulation

More than ever before, as pandemic conditions persist, the threat of data breaches and cyberattacks continues to grow, according to SFU professor Michael Parent. (Pixabay photo)
SFU expert unveils 5 ways the COVID-19 pandemic has forever changed cybersecurity

Recognizing these changes is the first in a series of steps to mitigate them once the pandemic ends, and before the next: Michael Parent

Most Read