Written by: Melissa Campos, Multimedia Assistant
With living expenses at an all-time high, it’s always frustrating to see necessities increase in price. The most recent candidate for this is car insurance: the Insurance Corporation of British Columbia (ICBC) announced last month that they will add themselves to that list of budget stresses by raising their insurance prices yet again. But this time around, they’re making sure that young drivers pay the heavier price.
If approved by the British Columbia Utilities Commission, car insurance rates for some B.C. residents will rise again in September 2019. ICBC claims that their reasoning is that the current system is not adequately balanced between those drivers who pose greater risk on the road and those who don’t .
Under the proposed model, a combination of crash history and driving experience will play a major role in determining whether a driver is high-risk or not, which will affect the cost of their insurance premiums. ICBC estimates that insurance will decrease for low-risk drivers and increase for high-risk drivers.
ICBC claims that young, inexperienced drivers are the highest risk, and that right now our premiums are “significantly discounted” compared to the risk we pose. I recently paid just over $3,000 to re-insure my car for another year; I find it hilarious that ICBC regards that as a “significant discount” when I haven’t had an accident – or even a driving citation – in the three years I’ve owned my car.
While ICBC claims that this proposal is meant to ensure fairness among drivers, they also admit on their website that “more crashes, more claims, and higher costs are putting significant external pressure on ICBC’s insurance rates.” The company has released several startling statistics on their website about young drivers that support their case, such as “one in six young drivers could get in a crash”. Yeah, and it could also hail tomorrow.
Besides that vague statistic, ICBC released a report detailing the kinds of accidents that occurred in 2016. In that year, 37,000 out of the 330,000 accidents that occurred involved youth between the age of 16 and 21. Young drivers in this age group currently account for an average of seven percent of drivers on the road. ICBC also admits that the rates of “youth injuries and deaths from vehicle crashes” are dropping, though they claim they are still “unacceptably high.”
I’ll admit that young drivers can present a risk on the road. Inexperience, driving without due care, overestimation of ability, thrill-seeking and risk-taking attitudes, and distracted driving are all factors specific to teens that can lead them to drive dangerously. But this is not representative of all young drivers, and the statistics certainly don’t defend a right for ICBC to be gouging our wallets.
What’s causing ICBC to go broke is not us, but rather their own poor spending habits. In an article ICBC published titled Why we need changes to insurance, ICBC reveals that “injury claims payouts are a main cause of [their] soaring costs”. The average settlement for minor injury costs has increased by 265% since 2000, rising from $8220 to $30,038 (2016). $16,500 of that new average is estimated for pain and suffering.
This is a ludicrous amount of money for minor injuries. Sure, if you’re hurt, you should get something for sure, but this seems exorbitant.
I also believe that the payout system makes people way too keen to exploit it. Just a couple of months ago, a pedestrian jumped onto the car of a family friend of mine, claimed that the driver — who was stopped at a light — had hit him, and ICBC gave him money for it. People have every reason to find creative ways to abuse a system like this, as it’s both too easy and too lucrative not to.
We also see this in vehicle repairs. It used to be that ICBC would either provide or require estimates that assess the damages of cars involved in an accident and determine what it should cost to fix the vehicles, restricting the amount that mechanics could charge. Now, damage assessment is generally unregulated. Although ICBC says that they may require an estimate before getting the car fixed, I have never seen this enforced amongst my friends and family who have been in accidents. In many cases ICBC is simply reimbursing bills sent directly in to them from mechanics. This allows mechanics to charge a mint, because insurance payouts are not accurately limited. While ICBC is increasing premiums for young drivers, mechanics are laughing their way to the bank.
There are several options that ICBC could explore that don’t involve unfairly punishing a full demographic of drivers. They could bring back in-person adjusters and estimators who can assess the damage on the vehicle before sending it to a repair shop, rather than having employees just look over the case from a distance like they do now. They could cap payouts for pain and suffering on minor injury claims. They could even just investigate incidents more thoroughly in order to reduce the number of fake claims that are reported. This could be made easier by offering an insurance discount to drivers who have an active dashcam in their vehicles so to capture more incidents on film to help determine fault.
If ICBC still wants to claim that incidents involving young drivers are costing the company a lot of money, they should punish those who really pose the risk. They can take accidents and driving violations into consideration when determining premiums if need be, but they shouldn’t just generalize and punish the good young drivers who drive diligently on the road. It’s not fair to the young drivers who pose less of a threat than dangerous drivers from other age demographics.
Our accidents are not what’re causing ICBC’s bank to crash. Their ticket out of debt is to revisit their own management and practices, not to harm innocent and good drivers just beginning to pay them.
