ICBC applies for another rate increase

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VANCOUVER (NEWS1130) – Another ICBC rate hike could be on the way.

The insurance corporation has applied for a 4.9 per cent bump. The increase would amount to about $36 a year for the average driver with just basic coverage.

The public insurer is expected to make a $1-billion profit in the coming years, but CEO Mark Blucher says the reason they’re applying for a rate hike is simple: the amount of money it’s shelling out for people hurt in crashes is up.

“In 2012, those payments were up $165-million over the previous year to $1.9-billion. It’s expected to be up again by another $100-million in 2013,” he tells News1130.

Blucher says 80 per cent of drivers who buy full vehicle insurance, the average increase would be about $11 per year because the hike would be offset by a four per cent drop in optional rates.

If the BC Utilities Commission approves the increase, it would take effect November 1st.

ICBC says the number of personal injury claims has also gone up and in turn it’s having an increase in legal fees.

But Personal Injury Lawyer Brahm Martz says most of the cases shouldn’t even be going to court.

“I think that ICBC is taking cases to court, forcing injured parties to go to court on cases that ought to settle to pressure injured people to accept less than what they ought to receive,” says Martz.

Martz recently won a $1-million court settlement for someone who was ready to settle for $350,000 but ICBC wouldn’t pay out more than $185,000 to the injured electrician.

He says in his experience ICBC usually ends up losing and having to pay out much more than the customer was originally asking for.

Government standing behind ICBC

A provincial government that has talked about making life more affordable appears willing to stand by as ICBC seeks another hike in basic insurance rates.

The Transportation Minister notes the increase for most will be less than one percent.

Todd Stone points out while ICBC is asking for basic rates to go up, the Insurance Corporation also wants to lower optional rates.

Combined, he says that means a point nine per cent hike for as many as 80 per cent of customers.

“While a rate increase is unfortunate, I think ICBC has done a lot here to try and keep the rates as affordable as possible.”

The minister makes no suggestion ICBC’s strategy of offsetting basic with optional rates should change.

“They are two very different sides of the business that have different realities that have to be managed and ICBC is working hard to keep the rates affordable overall.”

Stone also defends annual cash transfers from ICBC to the government, and says that helps pay for health and education.

“There is an expectation when Crown Corporations have positive financial results, British Columbians generally can benefit from that.”

NDP critic Mable Elmore is outraged and blames the provincial government for taking much of ICBC’s profits over the last several years.

“ICBC generates those profits so it should be re-invested back into ICBC to benefit the motorists of British Columbia,” says Elmore.

Elmore says the increase should be avoided all together.

“ICBC contributes hundreds of millions of dollars in profits to the BC government so there’s no justification for the increase,” explains Elmore.

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