VANCOUVER — Drivers who cause crashes or have fewer than 15 years of experience will pay more for vehicle insurance in British Columbia as part of a sweeping plan to overhaul how premiums are calculated.
The provincial government introduced the proposed changes on Thursday to modernize the system used by the Crown auto insurance corporation, which hasn't been updated in decades.
If the changes are approved by the B.C. Utilities Commission, two-thirds of drivers will pay less than they otherwise would while one-third will pay more, said Attorney General David Eby.
The current model to calculate rates used by the Insurance Corporation of B.C. is "broken," he said.
"From now on, British Columbians can have more confidence that if they drive safely and don't cause crashes, the rates they have to pay will much more closely represent the risk they actually represent on the road," he said.
Nearly 40 per cent of drivers would see up to a $50 reduction in their annual premiums, while 15 per cent would see more than a $100 reduction, the province said, adding that just over 10 per cent would see an up to $50 increase and 17 per cent would see their rates hiked more than $100.
The adjustments would take effect in September 2019, although some elements will not be fully implemented until 2027.
The changes are revenue-neutral and not intended to put a dent in ICBC's forecasted $1.3 billion deficit — a situation Eby has called a "financial dumpster fire."
However, Eby said he hopes the measures will reduce costs to ICBC with a financial incentive to drive safely and prevent crashes, which are at a record high.
One key change is that B.C. would move to a driver-based model from a vehicle-based insurance, so at-fault crashes are tied to the driver and not the car owner.
Premiums would be calculated based on years of experience, number of at-fault crashes, place of residence and how the vehicle is used, with additional discounts or add-ons on top.
Customers would have to list all the drivers who may operate the vehicle, and the experience and crash history of each driver would be taken into account in the premium.
Those with a vehicle being used by a driver with a learner's permit would have to pay as much as $200 more annually. But crashes caused by the learner before they get their licence won't be counted in their driving history.
ICBC would still offer discounts to inexperienced drivers, but those discounts would be reduced to better reflect the "risk" that those drivers represent, the province said.
Under the plan, a driver would be considered inexperienced if they have fewer than 15 years of experience on the road.
The corporation would consider at-fault crashes that happened over the past 10 years — up from three — to help determine a driver's premium.
But when the changes come into effect in September 2019, ICBC will only look back at two and a half years of at-fault crashes to determine premiums. Each year after that, it will extend the period by one year until 2027, when the full 10-year period will be in place.
The corporation would forgive one at-fault crash for customers with 20 years of driving experience.
The proposed model means drivers with more years of experience and no at-fault crashes would see greater discounts.
Drivers are already paying more if they live in dense, urban areas, which are more risky for crashes. But the province is updating the map to better reflect what B.C. looks like in 2018, the province said.
The utilities commission is set to hold a hearing in December to determine whether auto insurance rates will go up overall in the province.
Andrew Wilkinson, leader of the Opposition Liberals, accused the NDP government of doing little to fix the problems at ICBC.
"All the Attorney General has done today is lay blame at the foot of B.C. drivers, instead of overhauling the broken system that is ICBC," said Wilkinson in a news release.
The NDP countered with a news release saying the Liberals raided $1.2 billion from ICBC while they were in power in order to pad their own annual budgets.
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Laura Kane, The Canadian Press