Although the Insurance Corp. of B.C. (ICBC) has announced there will be changes to how auto insurance premiums will be calculated, the Crown corporation has yet to explain in detail the nature of those changes, which are slated to go into effect Sept. 1.
As a result, drivers who are involved in relatively minor, at-fault accidents from now until whenever ICBC does fully explain the new premium calculation will be left to gamble on how a claim may impact their insurance rates upon renewal versus paying out of pocket.
Some collision repair shops Glacier Media spoke to say they are still waiting for details to emerge on the new premium rate calculations. In the meantime they say customers are left guessing as to how to proceed. And shops foresee the new premium calculations could result in drivers not repairing damaged vehicles.
What is known is that after Sept. 1 the existing claim-rated scale (CRS) system that calculates discounts based on up to 20 years of claimless driving will be abolished.
As of today, drivers are able to make claims and calculate how they affect their premiums by looking at their CRS level. A driver with at least 13 years of claimless driving from the base rate, for example, would maintain their 43% discount thanks to what some refer to as a “free accident” claim. But commencing Sept. 1 any claim in the past 10 years will result in a higher premium.
After Sept. 1, each renewed insurance policy will start with a base premium of $1,000. That premium then increases or decreases depending on newly established factors, including the driver’s “10-year scan,” according to ICBC.
But how much one claim within 10 years will affect premiums is yet to be determined.
Also, after Sept. 1, claim repayment will apply only to claims of less than $2,000. It remains unclear if a claim over $2,000 prior to Sept. 1 can be repaid upon renewal thereafter.
ICBC acknowledged the problem exists until details are ironed out and made public.
“Customers will be able to find out the impact of a current crash at the time of renewal,” said ICBC spokeswoman Joanna Linsagan via email “We will not be able to provide those details prior to renewal, because there are many factors (such as who you want to list on your policy, where you live, how your car is used, whether you’re eligible for any discounts) that will determine your basic premium beyond just your at-fault crashes.
“We do recognize this may be a challenging decision for some customers, so we’re currently actively looking at ways to help ease the transition to the new model,” she added.
ICBC has stated online that at-fault crashes will have a greater impact on premiums than they do today. However it also remains to be seen whether all at-fault claims are treated equally as they are today (a $3,000 dent is as much of a claim against a driver as $100,000 worth of damage to a luxury vehicle).
ICBC has also stated that it will provide “one-crash forgiveness” to drivers with one at-fault claim after 20 years of driving. And whereas drivers today stop receiving discounts after nine years of claimless driving (from the base rate), ICBC says it will look at up to 40 years of driving to assess premium discounts (although it has not stated whether discounts will be higher than the existing 43 % maximum).
Another known change to new premium calculations is that crashes will follow a driver and not the vehicle.
A spokesperson for Attorney General David Eby, who is overseeing changes to the insurer, said he was not available for comment.
At least two auto collision repair shops Glacier Media spoke to said the planned higher premiums levied against just one claim could result in people driving around with damaged vehicles.
“The worst part I foresee is people leaving damaged cars and driving around unsafely,” said Cam Russell, manager at Rich City Collision in Richmond. “Who knows if they have frame damage beneath a seemingly superficial dent.
“Until you take things apart you ever know. It’s like an X-ray, you don’t know until you strip apart.”
The tighter restrictions on claims is said to be a result of the need to bring down vehicle repair costs. Between 2014 and 2017, vehicle damage claims rose 20%, ICBC said.
Car repairs and property damage account for 18% of auto insurance costs in B.C. whereas injuries and legal costs account for 61%, according to ICBC.
This month the Trial Lawyers Association of B.C. took the provincial government to court over sweeping changes to auto insurance that took effect April 1.
The association launched a constitutional challenge, arguing ICBC changes aimed at keeping minor-injury cases out of the court system restrict access to justice. The $5,500 cap on pain and suffering claims for minor injuries will unfairly reduce compensation for those injured in crashes, the association said.
- With files from Times Colonist