Auto Insurance

B.C. drivers now pay the most for auto insurance in Canada

By: Jessica Mach on July 19, 2018

Move over, Ontario: British Columbia has finally taken over as the province with the highest auto insurance rates in the country.

In 2017, the average premium that a driver paid per year in B.C. totalled $1,680, compared to $1,445 in Ontario.

The province that paid the third-highest auto insurance rates per year was Alberta ($1,251). The one that paid the least? That would be Quebec, which paid $661 as of 2016 (figures for 2017 were not available).

These numbers were provided by the General Insurance Statistical Agency, the statistical agency for Canada’s insurance regulators.

The Insurance Bureau of Canada (IBC), which represents the majority of the country’s private home, auto, and business insurers, is convinced that B.C.’s exorbitant rates are not coincidental.

In B.C., drivers only have one company to choose from when it comes to auto insurance: the Insurance Corporation of British Columbia (ICBC), which is a crown — or government-run — corporation that wields a monopoly over the province’s auto insurance industry. B.C. is one of only a handful of provinces that still makes it mandatory for drivers to use public auto insurance. Saskatchewan and Manitoba do this as well, with Saskatchewan Government Insurance and Manitoba Public Insurance, respectively.

IBC is a vocal critic of public auto insurance, and, in recent years, has been outspoken about how the system has affected B.C. drivers in particular.

Last fall, ICBC petitioned the provincial utilities commission to raise its basic and optional rates. David Eby, the Attorney General of B.C., argued at the time that doing so would mean that drivers would pay about 8% more in premiums than they already did — amounting to an average of $130 a year.

Several months later, in January, the insurance company tried to make another case for raising rates again. The company reported that it had lost $935-million between April and December of 2017, due to the rising number of auto accidents in the province, and the ongoing costs of dealing with older claims that extended as far back as 2010.

Critics suspected that ICBC’s finances were actually worse than reported, with some blaming mismanagement as a possible culprit.

They also suggested privatization as an answer. A private market would simultaneously allow drivers to compare rates and find the options that work best for their budget, and also force insurers to come up with more competitive — i.e., lower — rates.

But that explanation is at odds with what’s going on in Saskatchewan and Manitoba, where the premiums charged by the provinces’ public auto insurance companies are substantially lower than in both B.C. and Ontario, which has a private insurance market. In Saskatchewan, drivers paid an average of $936 in premiums as of 2016. In Manitoba, that number stood at $1,080. That puts them smack in the middle of premium pricing in Canada. 

Nonetheless, in an IBC poll conducted last fall, 78% of surveyed drivers in B.C. said that they wanted more auto insurance options.

“Opening B.C.'s auto insurance marketplace to competition would save drivers up to $325 annually,” said Aaron Sutherland of IBC on Thursday. “Competition provides a powerful incentive for any company to deliver the best service at the best price.

“Auto insurance is no exception to this rule, and Canada's private insurers are eager to better serve the B.C. marketplace.”