(The Canadian Press files)

(The Canadian Press files)

Northerners paying disproportionate ICBC premiums compared to claim costs: FOI data

Ratio of premiums paid to claims received is $1.96 for north compared to $1.35 for Lower Mainland

ICBC has released postal-code specific data comparing how much drivers pay in auto insurance premiums to funds paid out in settlements and it is not good news for rural policy holders – those in the North in particular.

From 2014 to 2019, rural motorists paid $1.84 for every dollar received in settlements. That’s compared to $1.35 for rate payers in the Lower Mainland and southern Vancouver Island. In urban centres, such as Nanaimo, Prince George, Fraser Valley, Maple Ridge/Pitt Meadows, Kelowna and Kamloops, rate payers dolled out $1.45.

ICBC’s break-even point is $1.33.

Darcy Repen has been working on the issue of disparity between urban and rural policy holders since he was mayor of Telkwa, from 2014 to 2018. Over the past two years, he has been responsible for a Freedom of Information request campaign that led to the release of the data by Canada Post Forward Sortation Areas (FSA), which are groupings of regions based on postal codes.

“It confirms exactly what we had anticipated, which is that we’re paying significantly more than the Lower Mainland,” he said.

READ MORE: ICBC gets green light to slash insurance rates by 15% starting in May

While drivers in the big urban centres do pay higher rates, Repen has always said the disparity in the ratio of premiums versus claims amounts to a subsidy by rural drivers compared to urban ones.

Repen broke it down even further for the members of the North Central Local Government Association (NCLGA), which includes all of the communities north of 100 Mile House.

In a letter addressed to the mayors, chairs and CAOs, he noted northern policy holders paid an average $1.96 for every dollar received over the six-year period covered in the FOI request.

Haida Gwaii motorists topped the list with $42.2 million in premiums and only $15.0 million in claims, a ratio of $2.82 for every dollar.

Dawson Creek was second highest, at $2.29.

Even Prince George policy holders paid an average of $1.89 per settlement dollar received, higher than the average for rural drivers, even though the city is classified as an urban centre.

For the V0J postal code area — which includes Smithers, Telkwa and the Hazeltons and everything north to Telegraph Creek and east to Vanderhoof – the average was $2.15.

READ MORE: ICBC opens online calculator for rate savings starting in May

The B.C. NDP is currently touting a 20 per cent savings on insurance rates across the board following legislation last spring that takes minor claims process out of the court system.

In December 2020, the provincial insurer applied to the BC Utilities Commission (BCUC) for a 15 per cent decrease.

Repen says that is all fine and good, but does not address the issue of disparity.

The application is currently before the BCUC and Repen has been granted intervenor status. In his submissions to the BCUC, he questions the fairness of a blanket 15 per cent reduction and calls for a revamping of the insurer’s rating algorithm to take into account rural versus urban, by rate territory and by FSA.

While the BCUC has already approved the 15 per cent general decrease, how that is ultimately applied is the subject of the ongoing proceedings and Repen hopes to make progress on that front.

“In their workshop, (ICBC) tried to shut down opening the door to discussing territorial rate differential,” he said. “A real win right off the bat is they were denied that limitation of scope. In fact, the BC Utility Commission themselves in their information request opened the door to discussing territorial rate differential.”

ICBC

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