ICBC No-Fault Design will Further Limit Consumer Choice


VANCOUVER, BCJuly 7, 2020 /CNW/ – Today, Insurance Bureau of Canada (IBC) published an open letter to British Columbia Premier John Horgan, outlining the auto insurance industry’s concern with Bill 11 – Attorney General Statues (Vehicle Insurance) Amendment Act, 2020. IBC also provided a list of legislative amendments to the government that, if implemented, would give consumers more choice and help to lower auto insurance rates in the province.

As currently designed, Bill 11 will further limit consumer choice, create new barriers to stifle the limited competition that currently exists in BC’s optional auto insurance market, and risks driving other insurers out of BC’s optional auto insurance market entirely.

As part of the move to a no-fault system, Bill 11 creates a new mandatory Basic Vehicle Damage coverage that is only available through the Insurance Corporation of British Columbia (ICBC). This product will provide coverage for vehicle replacement and repair when a driver is not responsible for an accident. Today, these repairs can be covered by the third-party liability insurance of the driver responsible for an accident, which is open to choice and competition above ICBC’s basic limits.

“Bill 11 will reduce what little choice drivers have in BC’s optional auto insurance market,” said Aaron Sutherland, Vice-President, Pacific, IBC. “There is no rationale for this expansion of ICBC’s monopoly over vehicle damage insurance. A better, more affordable auto insurance system would allow drivers to purchase this coverage from any insurer they choose.”

IBC has suggested a number of amendments to Bill 11 that would provide consumers with choice in vehicle damage coverage – whether that coverage is mandatory or optional. This would make BC similar to the no-fault system in Quebec, where injury coverages are provided by the government insurer and vehicle damage coverages are provided by private insurers. Total premiums in Quebec (including the government’s no-fault coverage) are $717 on average1, less than half the $1,500 that ICBC projects its no-fault insurance will cost.

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