Topic 1 – Claims
How it currently works
The current rate model does not fully consider at-fault crashes a driver has had when determining the rates he/she should pay. Too many drivers have had at-fault crashes that are not accounted for in their premium calculation. Many drivers have had at-fault crashes forgiven or were not held accountable because they were driving someone else’s car.
- Over 40% of claims are forgiven each year. This is because they are crashes caused by drivers who are at the maximum discount and can have multiple at-fault crashes with no impact on the Basic insurance premiums they pay. Under the current system, at least one crash is allowed to be forgiven after 13 years without any at-fault crashes.
- About 10% of claims are repaid each year because ICBC allows customers the ability to repay vehicle damage claims and not have their premiums impacted. In these cases, the driver’s true risk level is not reflected in their insurance rate going forward.
- Drivers who have had an at-fault crash are able to return to their pre-crash discount level after three years of being claims-free.
- 1 in 5 drivers were driving someone else’s car when they caused a crash. Currently, it is the vehicle owner who is held accountable for those crashes, not the at-fault drivers.
Proposals to make Basic rates more fair:
- Crash less, pay less. Crash more, pay more.
The more at-fault crashes a customer has, the higher their risk of causing another crash. We believe the premium should increase with each at-fault crash over the previous 10 years.
- Claim forgiveness: ICBC would forgive one claim after 20 years of driving experience, including at least 10 years of driving crash free (no at-fault crashes). Once a claim has been forgiven, customers would need to accrue another 10 years of crash-free driving before being able to have another at-fault crash forgiven without any impacts to their premium.
- Claim repayment: ICBC would propose to either set a dollar threshold for claims that can be repaid or completely eliminate the program that allows drivers to repay vehicle damage claims.
- Getting your discount back: Customers who cause a crash would not be able to return to their pre-crash discount after three years of safe driving as in the current model. Rather, customers would gradually return to the pre-crash discount level. After 10 years, the at-fault crash would no longer impact their premium.
- Move to a driver-based model.
Under this proposal, at-fault crashes would follow the driver rather than the registered owner of the vehicle.
- Registered owners whose vehicles are crashed by other drivers would not see rate increases for the cost of someone else’s driving behaviour.
- Crashes would follow the at-fault driver on all vehicles they drive.
- Vehicle owners would be asked to list the drivers who will operate the vehicle during the policy term. This would allow for more fair and accurate pricing because it better reflects the risk for each vehicle and holds at-fault drivers more accountable for their actions.
If an unlisted driver (e.g. a neighbour, family member) crashes the vehicle, the owner of the vehicle would not be held in breach of their insurance and their premiums would not increase, however:
- The vehicle owner would have to pay a one-time fee (per occurrence) for not listing that driver as an operator and that crash would follow the at-fault driver’s record for 10 years if they reside in B.C.
- If the at-fault driver resides with the owner (e.g. son or daughter) and was not listed as a driver the fee would be more significant.
The intent of this fee is to provide customers an incentive to declare the drivers of their vehicle to better reflect the risk and enable them to bear more fairly some of the responsibility of lending their vehicle to an unlisted driver. ICBC would have some exemptions to recognize extraordinary events, such as an unlisted driver using a vehicle to drive a family member or neighbour to the hospital.