ICBC to ask for 5.2% increase to basic insurance rates

The Insurance Corporation of British Columbia will file a basic insurance rate application with the British Columbia Utilities Commission (BCUC) on Friday asking for a 5.2% increase to basic insurance rates.

If the new application is approved, this will mean, on average, approximately $3 extra per month for customers, ICBC said Tuesday. Theapplication will ask BCUC to approve the increase effective Nov. 1 on an interim basis while it reviews the full application.

The proposed 5.2% increase will be in addition to a deferred 0.3% increase directed by the BCUC in last year’s rate decision. Last year, CBC applied for a 4.9%  increase to basic insurance rates but the final decision from the BCUC approved a 5.2% increase and its direction was to defer the additional 0.3% into 2014 basic rates.

“The need for the change is due to ongoing pressure from increasing injury claims costs, which cover payouts for pain and suffering, future care and loss of wages,” the corporation’s statement said.

“ICBC’s bodily injury claims totalled $1.9 billion in 2013 alone – up by $73 million from 2012 and by more than $500 million from just five years ago. The rising number and cost of injury claims is commonly the biggest single factor driving rates for all auto insurers across North America and beyond.”

Among the reasons for the climb in bodily injury is distraction behind the wheel, according to ICBC. Distracted driving is the second leading cause of car crash fatalities in the province, with an average of 88 people killed each year, and the leading cause of rear-end crashes which often result in injuries, it noted.

Higher legal and medical costs are also contributing to claims costs, ICBC added.