Thoughts From the ICBC Rate Fairness Report
I was curious about the outcome of ICBC's rate fairness survey so I checked the box to be notified when the report became available. The notification arrived in my inbox this week and I've made a quick scan of the document. The diverse opinions on who should be held accountable for what and how rates should be set is interesting.
Everyone seems to be on the same page when it comes to at fault drivers who cause crashes. 82% of respondents feel that those drivers should pay more while collision free drivers should pay less.
Overwhelmingly, 92% of respondents also feel that the cost of collisions should follow the driver, not the vehicle. This would more fairly place responsibility for crashes on the truly high risk drivers. It would encourage sharing of vehicles by reducing the consequences to vehicle owners in the event of an at fault crash.
The first question that came to mind after reading this is how would ICBC deal with drivers who do not hold a BC driver's licence?
Determining how much more an at fault driver should pay was more difficult. There was 74% support for driving convictions being used to set rates and the suggestion that the cost of a claim should be considered.
I think severity of at fault accident should be considered when considering at fault insurance increases. Backing into a pole and causing $2,000 is different than causing a major accident with tens or hundreds of thousands damage. There should be a sliding scale for at fault premium increases based on cost of settling the at fault claim.
Some felt that only serious convictions should be taken into account while others would also accept multiple less serious convictions.
Concerns about unfair policing practices, targeted enforcement or discretion in issuing a traffic ticket resulting in an undeserved increase in premiums were raised.
What constituted a serious offence was the subject of comment. One responder said:
I think classifying a serious conviction such as impaired driving the same as distracted driving and excessive speeding is a little much. Looking at your phone and drinking and driving are very different things, obviously none should be acceptable but they shouldn’t necessarily carry the same sentence or punishment.
Speeding was a major theme with mixed attitudes being expressed. While some felt that speeding was a valid risk factor, others did not.
The idea of increasing charges for drivers with speeding tickets is idiotic. Premiums should be increased only for drivers that have a history of at fault crashes or etc. Going 40 km/h over the arbitrarily low speed limits...is not something that's high risk in and of itself.
There is some truth here, but I suspect that we don't have a real appreciation for the actual risk associated with our actions.
Basing rates on the number of kilometers driven in a year tended to receive the most support from drivers who drove less. Common complaints about this gauge included no differential for city or rural driving and the fact that rural residents had to drive longer distances to use services.
The one comment that caught my eye was this:
As a quasi government monopoly, ICBC management are not incentivised to keep costs down, are not accountable to share holders or other interested parties, and are susceptible to political interference. Even though self interested unions and political parties think monopolies are great, ICBC needs competition to provide better service and lower premiums.
According to a Wikipedia article, the Cabinet of the provincial government controls ICBC’s rate setting through its power to set target financial outcomes (such as capital reserve ratios and profits), and through its ability to issue Special Directives to the BCUC.
Perhaps we also need to remove politics from the mix.