If ICBC won’t provide relief and support when people need it most, it’s time British Columbians were allowed to get insurance from a company that will.
For years, we have heard one consistent narrative from the Insurance Corporation of British Columbia (ICBC) – accidents and claims costs are up, so ICBC’s prices must increase as well. It’s been the key narrative for the Crown insurer; on average, it has increased prices nearly $400 since 2016.
If that’s the case, it stands to reason that if accidents and claims costs drop (and, boy, have they fallen lately), prices should go down.
If only it were that simple. But nothing ever is when it comes to our Crown auto insurer.
Despite reporting a 46% reduction in accident claims due to the ongoing pandemic and $158 million in savings from reduced claims costs in just a six-week period (March 15 to May 2), ICBC announced, last week, that none of those savings will be passed on to British Columbians.
And why would they? ICBC knows our hands are tied, and so they are keeping the windfall. Even where we are supposed to have a choice – in optional insurance – ICBC does everything in its power to block, bar or force out any company that seeks to compete. As a result, ICBC controls 90% of the optional market as well – a virtual monopoly.
It’s a stark contrast to what is happening elsewhere. While car insurers in other provinces are returning $600 million in insurance premiums to their customers, ICBC feels no obligation to do the same. Despite charging the highest insurance premiums in the country, the only relief ICBC will provide is waiving a $30 fee for those who cancel their policies outright.
In other provinces, some insurers are providing automatic rebates (no questions, no calls, just money back in pockets), while others have created new “stay at home” policies to provide savings. More than anything, other insurers are encouraging their customers to call them to discuss vehicle usage and coverage options to see what savings are available. Yet ICBC isn’t even doing that.
ICBC is still running ads during the pandemic, but none suggest calling them to discuss your coverage options. Instead, ICBC remains focused on selling the public on its no-fault insurance reforms, which will eliminate any legal recourse for drivers who feel they aren’t getting the benefits they need in order to recover following an accident.
No relief. Not now. But maybe later (maybe).
In defending ICBC’s refusal to support British Columbians at this time, Attorney General David Eby suggested the government is unable to determine the total impact COVID-19 will have on ICBC’s finances and that the Crown corporation has seen a decrease in the value of its investment portfolio.
News flash: Every insurer in the country is facing these same challenges as COVID-19 has shocked investment markets and drained portfolio values. While other companies have found ways to support their customers during the pandemic, ICBC is focused solely on its own bottom line.
There is one thing all insurers, including ICBC, know for sure: during the COVID-19 pandemic, everyone is driving less. But that’s just one reason the other companies have been providing financial relief to their policyholders.
Where drivers have a choice, insurance companies are compelled to return premiums because, if they don’t, their customers are free to shop around and find a company that does.
So why are British Columbians forced to accept this? This is just the latest example of ICBC business practices that would never be tolerated in a system where there was choice and competition.
Last month, Eby suggested that “it’s been a difficult time for British Columbians to remember why we have a public insurer.” With ICBC refusing to support drivers in any meaningful way during this crisis, I couldn’t agree more.
Aaron Sutherland is Vice-President, Pacific with the Insurance Bureau of Canada (IBC). IBC is the national association representing Canada’s private home, business, and auto insurers.