Many young drivers in British Columbia are experiencing sticker shock as they get hit with higher auto insurance premiums because of changes to ICBC’s rate structure.
The changes, which include putting a greater emphasis on driving experience and crash history in order to determine premiums, took effect on September 1.
But many young drivers who haven’t accumulated enough time on the road to earn discounts are calling these changes punitive.
B.C. teen Izabella Bryant told Global News that she recently bought a $10,000 Nissan Altima — her first car. Bryant has no at-fault accidents on her driving record and purchased standard insurance with comprehensive coverage through ICBC with $2-million liability.
Her annual premium — even before the changes took effect? $5,300.
“I had no idea it was going to be that much,” Bryant told Global News. “I’d heard from my friends that drive that insurance is super expensive, but I never imagined it was going to be five grand.”
Damon Langford, a Grade 12 student from Surrey, B.C., is in a similar situation.
Langford got his Novice licence earlier this summer (which is similar to a G2 licence in Ontario) and has been using his grandpa’s car to get more experience on the road. So, he was listed on his grandpa’s auto insurance policy, for which the annual premium was slightly more than $1,400.
But after ICBC’s new rate structure took effect, that price shot up to $2,950. If Langford ever decides to take over the policy himself (which he one day might, since his grandpa soon won’t be able to drive because of his age), his annual premium would increase to $5,900.
“I’d be willing to pay the price — maybe $3,000 is my max — as a principal driver, but I think $5,900 is kind of ridiculous,” Langford told the Vancouver Sun. “How can we get experience to be a better driver if insurance rates are so high?”
B.C. drivers already pay the most for auto insurance in Canada. And now teens like Langford and Bryant are caught in a catch-22. They need more driving experience in order to earn discounts on their policies from ICBC, but they can’t get that experience if they can’t comfortably afford the premiums the Crown corporation is currently charging.
“I think ICBC is a monopoly and it shouldn’t be that way,” driver Selina Chew told CTV News Vancouver.
ICBC spokeswoman Joanna Linsangan told the Vancouver Sun that these changes are “focused on increasing fairness.”
“Under our old model, inexperienced drivers paid less than the risk they represented. Their basic insurance premiums were significantly discounted, and therefore subsidized by other drivers.”