ICBC basic rate application paves way for Enhanced Care savings
With the vast majority of legal costs removed from the system, Enhanced Care will provide average overall basic and optional insurance savings of about 20%, or $400. Some drivers will save even more, while some will have less-than-average savings.
Young or inexperienced drivers
For years, young or inexperienced drivers have paid higher premiums due to their increased risk of causing a crash and therefore their increased risk of being sued in B.C.’s current litigation-based system. Enhanced Care coverage will remove the vast majority of legal costs, resulting in higher-than-average savings for many young or inexperienced drivers.
ICBC customers with higher optional third-party coverage
Most drivers who purchase higher limits of optional third-party liability coverage currently – either $3 million or $5 million of coverage – can also expect to have higher-than-average savings. Under Enhanced Care, anyone injured in a crash in B.C. will no longer need to pursue litigation through the courts to receive all of the care benefits and compensation they need. This makes the cost of optional third-party liability coverage significantly lower. However, it will still be an optional coverage available to help protect customers – for example, when they drive out of province or cause non-vehicle property damage.
Drivers with ICBC’s basic and optional insurance
Customers who purchase basic and optional insurance through ICBC will have average savings of 20%, or $400. While customers who only have basic insurance coverage with ICBC (about 12% of personal insurance customers) will not benefit from the decreases in ICBC’s optional insurance coverage, they will still have average basic insurance savings of about $150. If those customers have optional liability coverage with a private insurer, they may also have a decrease in the cost of that coverage should the private insurer choose to pass on the savings.
Motorcyclists and niche customers
Some other customers will have savings that are lower than average, such as those who use seasonal vehicles like motorcycles and trailers, collector vehicles (since their insurance is typically less expensive) or customers who live in areas of the province where auto insurance is already less expensive. Other small or niche customer segments may have limited to no savings if their risk has not materially changed under Enhanced Care, such as vehicles that mostly operate outside of B.C., including long-haul vehicles and out-of-province buses. In those cases, drivers are still at risk of being sued under another jurisdiction’s auto insurance system.
Enhanced Care refund
When Enhanced Care coverage takes effect May 1, 2021, millions of British Columbians will be owed a one-time, pro-rated refund of the difference between their current Autoplan coverage and the new, lower-cost Enhanced Care coverage, for the portion of their existing policy that extends past May 1, 2021.
For example, a customer who renewed their annual insurance policy on Nov. 1, 2020, would have an expiry date of Oct. 31, 2021. After Enhanced Care coverage comes into effect on May 1, 2021, this customer will get a pro-rated refund for the difference between their existing rate and the new, lower rate for the six months of their policy that overlaps with Enhanced Care coverage (from May to October 2021). On average, their refund for those six months would be approximately 10%, or $200.
When this customer renews their first full annual policy under Enhanced Care coverage on Nov. 1, 2021, they will have the full benefit of the savings in their annual premium. At that time, this customer will save, on average, about 20% or $400, compared to what they paid for their full basic and optional policy the previous year (excluding their Enhanced Care refund).
Customers who purchase optional third-party liability coverage with ICBC after Feb. 1, 2021, may already have a portion of their Enhanced Care savings before May 1, and therefore will receive a lower refund amount.
These refunds will be issued in a timely fashion following the implementation of Enhanced Care. More details will be made available on the refund process in the coming months.
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