Minister Todd Stone says that ICBC is moving towards no longer insuring luxury vehicles.

ICBC won’t insure luxury cars, Stone says after forecast of steep rate hikes

The insurance corporation forecasts rate increases from 6.4 to 9.4 per cent a year until 2020



Luxury supercars worth more than $150,000 will soon have to get private insurance and their owners will pay twice their current premiums to ICBC in the meantime.

Transportation Minister Todd Stone made the announcement Wednesday at the same time the public auto insurer released a forecast indicating basic auto insurance premiums might have to climb as much as 42 per cent over five years because of skyrocketing claims costs.

According to Stone, the move will ensure that “the broader rate payer is not subsidizing high-end cars.”

Luxury cars like Ferraris and Lamborghinis are six times more costly to fix.

There are more than 3,000 high-end luxury cars insured in B.C., a number that has shot up 30 per cent over the past three years.

Stone noted the average car in B.C. is worth only $15,000 – 10 times less than the new luxury car cutoff – but pays a similar basic insurance rate.

Stone admitted that neither the changes to luxury car coverage nor the B.C. government’s pledge to not take a dividend from ICBC over the next three years would do much to rein in the upward pressure on ICBC insurance premiums.

Forecasted increases to ICBC’s basic rates were also disclosed today in response to a B.C. Utilities Commission request for more information before approving a 4.9 per cent basic rate increase this year.

Under the province’s rate-smoothing legislation, each year’s change in basic insurance rates can’t be more than 1.5 per cent different from the previous year.

The ICBC forecast shows basic rates are predicted to increase 6.4 per cent in 2017, 7.9 per cent in 2018, 9.4 per cent in 2019 and 7.9 per cent in 2020 – numbers that compound to 42 per cent when this year’s 4.9 per cent hike is included.

Stone called that an extreme sce

nario and ICBC had opposed the release, calling the numbers hypothetical and “potentially misleading.”

ICBC also released more optimistic rate increase scenarios that level off at four per cent annually in the next four years or even shrink down to one or two per cent per year. Those scenarios assume a decrease in fraudulent claims, distracted driving and rosier investment returns.

Adrian Dix, the NDP critic on ICBC, dismissed Stone’s announcement on luxury car insurance as a “tactic” to deflect attention from the projected rate hikes.

“This is them being caught red-handed with their failed rate policy and trying to find a distraction,” he said.

Dix said ICBC would be on much better financial footing and drivers wouldn’t be facing big premium increases had the provincial government not taken $1.2 billion worth of dividends out of ICBC’s optional insurance business for general revenue over the last several years.

“The government has scooped money out of ICBC,” Dix said. “What we’re seeing are the consequences of Christy Clark treating ICBC as a bank machine. And it’s drivers who are going to pay.”

As for luxury insurance reform, Dix said the government could have passed that months ago if it was a serious priority, adding that luxury car repair costs are a minor contributor to ICBC expenses compared to the soaring costs of bodily injury claims.

He also noted that making supercar owners get private insurance won’t prevent ICBC from picking up their repair bills if another ICBC-insured motorist is at fault in a crash.

Exempted from the new private insurance requirement are pickup trucks, RVs, collector cars and limousines.

– with files from Jeff Nagel

2011 video of police impounding supercars racing into White Rock

 

By the numbers

$13,000 – Average repair cost when a high-end luxury car crashes

$2,500 – Average repair cost for a regular vehicle

$38,000 – Cost to repair a 2015 Bentley Flying Spur W12 with damaged fender, grille, headlight and intercooler.

$1,000 – Same basic insurance premium for both the Bentley and a typical car until now.

 

ICBC’s highest repair bills this year

$93,574 to fix a 2015 McLaren 650S valued at $405,000

$88,481 to fix a 2011 Ferrari 458 Italia valued at $300,000

$78,999 to fix a 2016 Maserati Gran Turismo valued at $215,000

$76,796 to fix a 2015 Mercedes-Benz CLS63 AMG valued at $120,952

$76,617 to fix a 2015 Porsche 911 valued at $158,785

$76,474 to fix a 2011 Rolls Royce Phantom valued at $246,500

@katslepian

katya.slepian@bpdigital.ca

Like us on Facebook and follow us on Twitter.

 

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

WATCH: Yale firefighters fight late night cabin fire in Spuzzum

Neighbours started fighting fire until crews arrived an hour later

Chilliwack youth planning solidarity march against racism

Organizer hoping to ‘create a type of a energy in the city that we will not be silent about racism’

Fraser River freshet peak is coming soon

Predictions for 2020 by River Forecast Centre has the freshet peak at the Mission gauge for June 4-5

Virtual public hearing set for developer with plans to subdivide Willow Street lot

People can submit comments in advance, or call to be added to a speakers list, ahead of June 3rd hearing

Cyclist in his 50s victim of fatal crash near Hope Thursday

Police have ruled out speed, impairment as factors after a tractor-trailer struck a man in his 50s

B.C. records four new COVID-19 cases, Abbotsford hospital outbreak cleared

Four senior home outbreaks also declared over, eight still active

RCMP, coroner investigate murder-suicide on Salt Spring Island

Two dead, police say there is no risk to the public

About 30% of B.C. students return to schools as in-class teaching restarts amid pandemic

Education minister noted that in-class instruction remains optional

Trudeau avoids questions about anti-racism protesters dispersed for Trump photo-op

Prime minister says racism is an issue Canadians must tackle at home, too

B.C.’s Law Enforcement Torch Run for Special Olympics goes virtual

The annual event partnering RCMP with Special Olympians is dramatically altered by COVID-19

Bateman program encourages people to sketch outside, connect with nature

#MyNatureSketch initiative encourages Canadians to become ‘bright-eyed three year olds’

Be cautious expanding COVID-19 bubble, Dr. Bonnie Henry tells B.C.

Senior homes stay off-limits as schools, businesses reopen

VIDEO: Yarrow’s Corwin Drew in final four of Vancouver Whitecaps Academy skills competition

The soccer star is looking for community support to get him through the next round of online voting

Most Read