READING - Affordable & Effective Auto Insurance

According to this report for ICBC and the Ministry of Transportation & Infrastructure from Ernst & Young our provincial auto insurance program is currently facing the following five challenges:

  1. More accidents on BC’s roads are resulting in more claims
  2. The number of claims being filed is going up faster than the number of accidents
  3. Average settlements for minor injuries (such as minor soft - tissue) are increasing
  4. Claim costs for minor injuries have increased from 30% to almost 60% of total bodily injury claims costs since 2000
  5. Insurance premiums collected by ICBC do not cover claim costs

This review has identified a number of opportunities to address the current failings of the system. For simplicity, these opportunities have been presented as three priority initiatives as follows:

  • Firstly, there is a need to increase the effectiveness of BC’s road safety approach. Successfully changing high - risk driver behaviours will result in fewer accidents on BC’s roads;
  • Secondly, a re - design of the current insurance product is required. This is where the bulk of the savings will come from. Successful change will alter claimant behaviour, reward safer driving, increase fairness, and keep costs and premiums under control; and
  • Thirdly, a set of additional interim measures should be initiated by ICBC in the near term (such as continued process and productivity improvements and changes to the risk rating model) that will have an incremental impact to the future performance of ICBC and BC’s auto insurance system and lay a platform to enable successful reform.

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