Owner's Certificate of Insurance

When issuing an owner's certificate of insurance, ICBC typically charges different rates that vary by areas within the province.  Does anyone know where in the Insurance (Vehicle) Act or Regulations that permits establishing different rates depending on the region where the vehicle is located? 

I found that Part 2 section 9(3) state that "the territory in which the vehicle is primarily located when not in use" must be updated upon a change if the premium was established based on territory, however, I don't see where it is permitted to establish premiums based on territory in the first place.

Section 34(3) of the Act permits establishing differing premiums for the driver's certificate of insurance based on class or subclass of driver where the class or subclass of driver can vary based on the region of the driver.  

However, for the owner's certificate of insurance, section 34(4) only permits establishing premiums based on the class of subclass of a vehicle with no variance based on regions.

Does anyone have any insight into how ICBC is charging varying premiums of owner's certificate of insurance based on regions that a vehicle is located?

 

I think I found the problem

I think I found the problem.  In 2003, section 42(2)(c) which allowed the establishment of premiums for owner's certificate of insurance based on regions of the vehicles.

Section 42(2)(c) (repealed) read:

"Without limiting any power of the Lieutenant Governor in Council to make regulations under any other Part of this Act, the Lieutenant Governor in Council may make regulations under this Part as follows:

....

(c) establishing classes and subclasses of drivers, by regions of British Columbia, or otherwise, establishing those regions, establishing classes of motor vehicles and trailers and prescribing the premiums payable by drivers and owners of motor vehicles according to the regions, or otherwise, and according to the classes;"

 

This was replaced by Part section 9(3).  Section 42(2)(c) did allow setting owner's certificate premiums based on the region that a vehicle is located.  Section 9(3) does not.  

If I'm not mistaken, ICBC is collecting owner's certificate premiums based on region illegally.

Wow. That's huge.

Seems to me then that once somebody takes this to court (Paul Hergott, maybe?) then there's a bunch of us in what ICBC would classify as high risk areas who have massive refunds due to us.

Of course, if that occurred then most of the folks in the province would suddenly find that they have been undercharged, and it's time for them to catch up on what they should have been paying.

That there DoubleClutch fella sure asks some interesting questions. 

ICBC

I sent this message to ICBC.  We'll see how it goes.

"When issuing an owner's certificate of insurance, ICBC typically charges premiums that vary by areas within the province that the vehicle is located.  Section 42(2)(c) on the Insurance (Vehicle) Act previously allowed owner’s certificate premiums to be based on varying regions.  Section 42(2)(c) also allowed the Lieutenant Governor in Council to establish those regions.  However section 42(2)(c) was repealed in 2003.

I believe Part 2 Section 9(3) of the Act was meant to replace section 42(2)(c) in order to shift some responsibilities from the Lieutenant Governor in Council to ICBC and expand upon section 42(2)(c).  However, Part 2 Section 9(3), unlike section 42(2)(c), does not allow ICBC to establish premiums for the owner’s certificate based on the region that a vehicle is located nor establish regions in relation to the owner’s certificate.

Can someone at ICBC please determine if ICBC is currently collecting owner’s certificate premiums varying by region in violation of the Insurance (Vehicle) Act?"

My Experience

I ran this past ICBC and they pointed back to section 34.

I explained as you did and they reiterated section 34.

Trouble is, they are only helping us try to interpret this. It's really not up to them, its the provincial government that creates, amends and cancels the guiding legislation.

It might be a better question for our MLA or the BC Utilities Commission.

I received a response from

I received a response from the BC Utilities Commission.  They said that the Commission regulates ICBC’s Basic insurance rates, pursuant to the Insurance Corporation Act and that my question relates to the Insurance (Vehicle) Act so I should contact ICBC or an Autoplan broker.  Clearly this relates to the basic insurance rates but I understand that first line response is to try to redirect the problem. 

I contacted the Minster of Transportation and boiled it down to this:

ICBC's Basic Tarriff document defines rates for ICBC's Owner's Certificate of Insurance. This document shows base premiums being established using territory and vehicle rate class.

Vehicle rate class is the class or subclass of vehicles established by the corporation under section 34 (1) of the Act (this is defined in the regulations).  Section 34(1) allows ICBC to establish basic premiums that apply to class or subclass of vehicle.  Subsection 34(2) allows Owner's Certificate of Insurance basic premiums to be established on class or subclass of vehicle only.   Therefore, Owner's Certificate of Insurance basic premiums can be established on vehicle rate class only.  

It's funny.  I talked to a couple people about this problem but they seems to just question how everyone could have missed this problem.

That's a good point.  I have

That's a good point.  I have had similiar experience that most people at ICBC do not know that driver's certificate of insurance is different than owner's certificate of insurance.  It's probably the same reason the section wasn't reconstructed properly.  I'll will try to get a hold of an MLA or someone at BC Utilities Commission that understands the legislature to give their opinion.

Yes, it could be a large

Yes, it could be a large problem.  The wording of section 34(1) allows neither the classification of vehicles based on region nor the creation of regions in relation to the owner's certificate of insurance.  

Looking at some figures for premiums from this ICBC publication:

http://www.icbc.com/about-icbc/company-info/Documents/bcuc/basic-tariff.pdf

for 002/022 rate class in 2017 (the rate class for a passenger vehicle driven to or from work >15km), $200k third party liability has a tariff range of $1244 to $2174.  Making some very rough assumptions, that 60% of cars in the province are in the Lower Mainland have third party liability policies at $2174 per year and 40% of policies in the rest of the province are at $1244, everyone should have been charged $1802, a differential of $372 per year for owner's certificates in the high range.  Best case scenerio, everyone has a 43% discount, puts that differential at $159 for high range policies.  Conservatively, it's a cumlative overcharge of $2 billion over the last 14 years.

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