B.C. should follow Quebec’s lead on auto insurance, says industry bureau

VANCOUVER (NEWS 1130) — The Canadian insurance industry is pressuring the B.C. government to amend plans to make no-fault insurance more affordable and competitive.

In an open letter to B.C. Premier John Horgan, the Insurance Bureau of Canada outlines its concern with Bill 11 — to be debated Tuesday in the legislature — and suggests following the lead of Quebec.

“This government wants to make the case that only ICBC can take care of you in the event that you are injured in an accident and, therefore, ICBC should have a monopoly over that product. Fine. But there is no rational for ICBC being the only game in town as it relates coverage that makes sure your car gets repaired after an accident,” said Aaron Sutherland, a vice-president with the Insurance Bureau of Canada.

Bill 11 would reduce what little choice drivers have in B.C.’s optional auto insurance market, he added.

In Quebec, injury coverage is provided by the government insurer, while that for vehicle damage is done by private insurers.

According to the insurance bureau, ICBC basic insurance currently provides coverage for $200,000 in third-party liability, accident benefits, and uninsured motorist protection.

Optional insurance provides excess third-party liability — above $200,000 — as well as comprehensive and collision insurance.

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Total premiums in Quebec — including the government’s no-fault coverage — are $717 a year, on average. That’s less than half the $1,500 that ICBC projects its no-fault insurance will cost.

“Under ICBC’s monopoly, British Columbians pay more for auto insurance than anyone else in Canada,” Sutherland adds. “Canada’s private insurers want to help lower premiums in the province and are committed to working with the government to create a system that works for everyone.”

With the no-fault system in Quebec, he added, policy-holders can choose from over 50 different companies for vehicle coverage.

“We believe that’s a better system than we have here in B.C.”

Vehicle damage claims in B.C. are currently paid from the third-party liability coverage of the driver responsible for the crash.

Bill 11’s basic vehicle damage coverage would move that under ICBC’s basic policy and cover repairs if the driver is not at fault, says the insurance bureau.

“Removing excess third-party liability coverage under no-fault will shrink the optional insurance market by up to 30 per cent,” says the insurance bureau.

Last year, B.C. drivers spent $2.9 billion on optional insurance, with $300 million of that being spent on policies with private insurers.

In February, the province suggested B.C. drivers can expect a 20 per cent drop in their insurance premiums next year as part of a switch to a no-fault-type system.

The pressure from the insurance bureau comes as other stakeholders, including B.C. trial lawyers, are pushing back on the idea of a blanket no-fault insurance design.