ICBC premiums could increase by 30% in the next two years

A report leaked over the weekend and officially released today warns that ICBC insurance premiums could rise as much as 30% by 2019.

The study by Ernst & Young calls for large-scale changes to the Insurance Corp. of British Columbia in order to prevent the forecasted rate hikes.

“There has been a grave financial crisis for at least two years,” said Attorney General David Eby in a conference call Monday afternoon.

Two Contributing Factors

Eby cited two driving factors that led to the current crisis. “[First], the BC Liberal Government had been taking money out of ICBC in the form of so-called dividends in the amount of hundreds of millions of dollars… The second is that British Columbia has seen a spike in the number of accidents and injuries.”

That spike has been steep, a 23% increase since 2013, which has created significant cost increases for ICBC.

“I am committing on behalf of the new government of British Columbia that it will be our priority to fix ICBC,” said Eby. “[We want to] make sure that drivers can be confident in having affordable insurance rates for their vehicles and for their families.”

Photo Radar and/or No-Fault System not on the table

“I want to assure British Columbians that we are not considering photo radar or moving to a no-fault system for auto insurance,” Eby said in a news release.

“We will focus on finding answers that put the corporation back on stable financial footing, while maintaining our number one priority of making rates affordable,” added Eby.

Details unclear for now

The ICBC overhaul likely won’t come cheap. Eby didn’t make any specific estimates about funding. However, he did confirm that “a number of the proposals… in the report require some level of preliminary investment by government.”

He said he’d have talks with Minister of Finance Carole James and with the ICBC board to determine specific costs.