If people can afford high-end luxury cars, they can afford to pay higher premiums to cover the cost to repair their vehicles, according to Transportation Minister Todd Stone.
Right now, whether a person drives a $15,000 Honda Civic or a $300,000 Ferrari – their basic insurance premiums are similar.
“The owners of these cars will have to go to private insurance instead,” Stone said.
The decision is meant to level the insurance playing field, so that “exceptionally expensive” vehicles are not subsidized by the broader ratepayer.
Last year, the average repair cost for a luxury car was about $13,000, compared to the average repair – such as a Honda Civic – amounted to about $2,500.
The cost for parts to repair the fender, grille, headlight and intercooler on a 2015 Bentley Flying Spur W12 was about $38,000 alone. While the cost to repair this car is substantially more than the everyday car, the basic insurance rates of about $1,000 per car are about the same.
Under the new framework, drivers will still be required to carry proper coverage, but it will not be provided through ICBC’s public insurance plan.
Commercial vehicles, pick-ups, RVs, collector cars, and limos will be exempt.
The framework and policy changes between B.C. government and ICBC will begin immediately.
This is one of a number of actions that government and ICBC will be rolling out over the coming weeks and months to continue to address cost pressures on rates.
ICBC is also asking to raise rates 4.9 percent this year.
