Big increases to insurance rates for B.C. motorists with out-of-province driver’s licences are based on increased risk, says Attorney General David Eby.
“The data from ICBC shows that people who are new drivers to B.C. have more collisions, and the whole rate design piece is around reflecting driver risk,” Eby said. “So if you are driving on another province’s driver’s licence, people tend to have more collisions. As a result, their rates are higher.”
The rate changes, which came into effect Sept. 1, mean a person who insures a vehicle in B.C., but has a driver’s licence from another province, is ineligible for a safe-driver discount.
Previously, the Insurance Corp. of B.C. would credit a person for a clean driving record accumulated elsewhere in Canada.
Drivers can still get an insurance discount for their safe driving record from another province, but to do so, they have to surrender their out-of-province driver’s licence and apply for a B.C. licence.
At that point, ICBC will consider up to 15 years of their non-B.C. driving experience for a discount — an increase from eight years before the changes. However, those savings will be offset for the first three years by a “new resident” surcharge of 15 per cent on the first year, dropping to five per cent in the third year.
“Crash data shows that new residents represent a higher risk for the first three years of driving in B.C.,” ICBC said in a statement.
“To account for this, the model applies a risk premium in their first three years of driving in B.C.”
Critics say it is overkill.
“From the speculation tax to now this, it’s one more nail in the coffin for British Columbia attracting visitors and investors in this province,” said Liberal critic Jas Johal. “These folks may be here for three or five months, but they spend money in our province.”
The changes are part of a wider rate redesign by ICBC that sets insurance rates based on driver history and not the history of the vehicle being insured. It has attracted criticism because young and inexperienced drivers are seeing major rate hikes, since ICBC deems them to be a higher risk for crashes.
“The old model was a vehicle-based insurance model, meaning that you didn’t even need a B.C. driver’s licence to receive safe driving discounts — you just needed to insure a vehicle in B.C., even if you didn’t live here permanently,” ICBC said in a statement.
“Under the old model, these savings were subsidized by British Columbians who were living in and driving safely in our province, and who ended up paying more than their fair share as a result.”
Eby said the best solution for part-time B.C. drivers or those who don’t want to get a B.C. driver’s licence is to work with their insurance broker to buy short-term insurance for the months they want to drive in B.C., and then storage insurance for their time out of the province.
Out-of-province drivers who are in B.C. only part time “are going to want to be in contact with their brokers to start and stop their insurance when they’re not in the province, because it doesn’t make sense to pay for it when they’re not here,” Eby said.
