ICBC to refund $39 million in optional insurance policy over-payments

The Insurance Corporation of British Columbia has identified several thousand customers who have overpaid on their optional auto insurance because of incorrect vehicle descriptions.

Overall, ICBC will be issuing refunds totaling around $36 million, plus $3 million in interest based on the B.C. Supreme Court interest schedule, it said in a statement Sunday.

As part of an update to its computer system, the organization found 40,000 optional insurance customers per year over the past six years who had made overpayments, with the average at $21.

ICBC also estimates that 58,000 optional insurance customers underpaid on a portion of their optional insurance per year. The average underpayment per year was $34.

Customers who were undercharged won’t be charged retroactively, and the mistake won’t result in higher premiums, ICBC said.

“We are going to ensure all of our customers who overpaid on their optional insurance over the last six years receive full refunds with interest,” Mark Blucher, president and CEO of ICBC said in a press release. “The modernization of our systems will ensure this doesn’t happen in the future and we sincerely apologize for any inconvenience this has caused our customers.”

ICBC said it’s working to resolve the issue and identify affected customers within 90 days and customers will receive their full refunds back by July this year.

The insurance carrier will be looking back to July 1, 2008 to update vehicle descriptions, including customers’ current insurance policy up until its expiration date, according to its statement.

“ICBC is going as far back as our legacy insurance computer system is able to accurately recalculate historical premiums for customers,” it said.

“Updates to vehicle descriptions will be made in the coming months,” the insurer also noted.

“New technology will use the vehicle identification number (VIN) provided by the vehicle’s manufacturer to automatically capture the vehicle description (make/model/type). Today, this process is done manually.”