The Insurance Corporation of British Columbia's Board of Directors has finalized the Terms of Reference and have set out a job posting on BC-Bid for a third party expert to collaborate with. Although no official details on the terms have been made public, the first launched in order to identify key factors impacting basic insurance rates and to provide fair and affordable basic insurance for the province with a range of options to deal with future inflation. Transportation Minister Todd Stone has first directed this review in December when ICBC launched a worst-case scenario forecast of insurance rate hike of up to 42 per cent by 2020. The commission ended up agreeing on a 4.9 per cent increase for the upcoming year.
ICBC claims the rise in premiums is a result due to a rise in accidents, fraud and cost in claims. "Rapidly increasing numbers of crashes, claims and claims costs are putting significant pressure on the cost of insurance in British Columbia - pressures shared across the auto insurance industry in North America," in a statement made by ICBC spokesperson. They reported the number of vehicle damage claims increased by 11 per cent and the number of injury claims increased by 14 percent. The average of cost of vehicle claims is also up to 17 percent as vehicles become more expensive to repair. However, the biggest issue lies with the highly profitable corporation itself. While the ruling political parties throughout the years has siphoned revenue away from the insurance monopoly and directed it as revenue to be used for the province, there is no rainy day fund to combat these issues. While the government has agreed to not touch any revenue from the corporation for the next three years, it doesn't make sense that they would do it again and then leave the people to foot the bill when the insurance company is unsustainable.
The company also tried to deflect some of the issues last year by dropping insurance on luxury vehicles. Any vehicle over $150,000 in value needed to find separate insurance coverage except for collectibles, limousines and RV's. Their logic was that the cost to fix a bumper on a Porche could amount up to $5000 while it may cost a Civic a fraction of that cost. The biggest joke is they claim the insurance cost between the two vehicles are similar - which brings the logic of why would the insurance for a $150,000 vehicle be similar to a $40,000 vehicle. Dropping luxury vehicle insurance would only save the company a few million dollars where the deficit sits in the hundreds of millions, a minimal fraction of the problem. I personally believe the insurance company needs a complete overhaul and an ethics review, not an independent review on this nonsense they are feeding the public.