The Chief caught up with Attorney General David Eby for a discussion of insurance rates and how they impact Squamish. What follows is an edited version of that conversation.
Q: The changes that came into effect with ICBC on Sept. 1, have garnered a lot of attention — in particular, the increase for inexperienced drivers. What is the philosophy behind that change?
A: The goal of the reforms around ICBC rates is to ensure that the amount of insurance people pay is close to their actual risk to the insurer. We know, unfortunately, that inexperienced drivers are responsible for one in four of the collisions on our roads and it is very expensive to provide them with things like auto body insurance, where they get their car repaired, at the public's expense, if they get into a collision.
So, when you are going to buy collision insurance, you should understand if you have one to four years of experience, the odds are pretty good that you are going to be involved in a crash and so to repair your car through the insurance company, is going to cost a fair bit of money. [The changes] encourage people to make different choices. You might choose a car that doesn't need collision insurance and that you wouldn't be as worried about in terms of if it was in a collision. You might decide not to get your own car, if you are with parents or somebody else, to get the experience that way. It is not just inexperienced drivers the changes apply to. It is also drivers with multiple at-fault collisions, drivers with excessive speeding tickets and drivers with impaired driver histories.
Q: Do you think, taking a look at all the changes that this is also a cultural shift in how we think about driving?
A: With respect to the media, some of the stories about the change with inexperienced drivers [who saw hugely increased rates] have been quite sensational. For the vast majority of inexperienced drivers, the increase to their basic insurance is a couple of hundred dollars and in fact, for some drivers with, say, five years driving experience, their insurance has gone down. I think the big increases are coming from optional insurance... It is not the basic insurance you need to drive. It is coverage that goes above and beyond for liability or to repair the automobile.
We are talking about a couple of hundred dollars here, but I do think it is a shift and that shift is more in the direction of insurance looking at the risk of the particular driver more closely than historically has been a practice in B.C. and there are upsides and downsides to that. The downside is that for — typically — younger drivers they are going to be paying a bit more than they were previously. And previously, they were more heavily subsidized by more experienced drivers. That is the bad news. But on the upside, when they demonstrate that they are driving safely on our roads, their insurance rates will decline dramatically year-over-year.
Q: Here in Squamish, as in the Lower Mainland, it is really tight for people. A lot of locals commute. We have been asking, for example, why some people don't put snow tires on their vehicle, and the answer it sometimes comes down to a choice to buy groceries or tires. So, changes like you are describing, hurt the lower-income folks the most. I know in your history you have stood up for those same people, so how do you jive that with the impact of these increases?
A: There's no question that British Columbians, including those in Squamish and Whistler, are paying too much for insurance and we have an obligation in government to bring that cost down as much as we can. Our work is not done. We have a number of initiatives underway to reduce the costs. I don't want people to think this is it. The first year and a half of work on ICBC has been focussed on stabilizing the corporation and now we are dedicated to reducing rates for motorists. And we have had some success, we have increased benefits at the same time as reducing losses at ICBC by about a billion dollars. But that doesn't speak to the fact that motorists, in my opinion, are still paying too much.
Q: What has been underreported in your mind since the changes Sept. 1?
A: There's a lot of discussions that maybe we would be better off with private insurers in the province — if we didn't have ICBC then people could renew online and they wouldn't have to pay as much — all of these wonderful promises, that unfortunately, have not been delivered in Alberta or Ontario where private insurers operate. Alberta and Ontario had the biggest increases in Canada last year compared to this year — double-digit increases for drivers. Both provinces describe their insurance systems as "in crisis." The private insurers, who presumably want to come into B.C. produced a report in January that says here are the benefits of competition for B.C. and they show that for drivers under the age of 34, they are going to see increases ranging from 18 to 35 per cent, with private insurance. The only group that sees a benefit under privatization is those over 45 years old.
Q: A common criticism that comes up for ICBC and other Crown corporations, is the bloated incomes at the top, where the CEO is making close to half a million dollars and then ICBC is asking regular people to pay another $200, which will hurt them. What do you say to that criticism?
A: We have done some work on that. We have reduced executive compensation at ICBC. So, there are 33 per cent fewer people earning more than $200,000 at the corporation. As a whole for executive compensation, we have reduced these bonuses that the previous government had and we have decreased the overall compensation for executives for the entire executive group by $400,000.
Every single position on the executive earns less now than they did when we formed the government and we've seen double-digit reductions in every category of $100,000-plus earners at ICBC since we took over. It is an issue that needs to be watched carefully and we have taken action on those things.