Already under fire for the steep cost of auto insurance in BC, the Insurance Corporation of British Columbia (ICBC) is now being criticized for charging drivers with out-of-province licenses even more for insurance.
A new report by Vancouver Sun offered a reminder that following ICBC’s rate changes in September, an individual who insures a vehicle in BC but has a driver’s license from another province is ineligible for a safe driver discount – thus, the individual pays more for coverage.
Prior to the changes to basic auto insurance rate calculation, ICBC would credit an individual’s clean driving record accumulated in another province.
Read more: ICBC's new premium rates take effect
“The data from ICBC shows that people who are new drivers to B.C. have more collisions, and the whole rate design piece is around reflecting driver risk,” Attorney General David Eby explained to Vancouver Sun in a statement. “So if you are driving on another province’s driver licence, people tend to have more collisions. As a result, their rates are higher.”
Drivers can still receive an insurance discount from ICBC for their safe driving record from another province. However, this will involve surrendering their out-of-province driver’s license and applying for a BC license. ICBC will then credit up to 15 years of their non-BC driving experience for a discount.
Before ICBC made rate calculation changes, it only credited up to eight years of driving experience for the discount to apply.
But even after reapplying for a license in BC to take advantage of accumulated safe driving experience, a former non-BC driver will be served a “new resident” surcharge of 15% on their first year, which gradually lowers to 5% in the third year.
Citing crash data, ICBC noted that new residents pose a higher risk for the first three years of driving in BC.
“To account for this, the model applies a risk premium in their first three years of driving in BC,” the insurer stated.
Critics have questioned the surcharge.
“From the speculation tax to now this, it’s one more nail in the coffin for British Columbia attracting visitors and investors in this province,” argued Jas Johal, MLA for Richmond-Queensborough.
Johal pointed out that these visitors and/or investors in the province might only be spending several months in the province, but are being charged unfairly simply for insurance they will not be able to make full use of.
