Auto Insurance In Bc: What's The Cost?

Car insurance in British Columbia is provided by the Insurance Corporation of British Columbia (ICBC), a public insurance company. In 2021, ICBC moved to a no-fault insurance model, which led to a significant reduction in insurance rates. The average cost of car insurance in BC is $1,832 or about $150 per month. However, rates may vary depending on factors such as the type of insurance coverage, applicable discounts, and driving record.

Average cost of auto insurance in BC

The average cost of auto insurance in British Columbia (BC) is $1,832 annually or about $150 per month. This figure represents a reduction in rates that came into effect in May 2021, with the introduction of a no-fault insurance system. The Insurance Corporation of British Columbia (ICBC) is the province's sole provider of mandatory vehicle insurance.

The average annual premium in BC was $1,900 in 2020, which dropped to $1,500 in 2021. This reduction equates to a saving of about $400, or 20% less than the previous year. The ICBC has stated that this lowered rate will be locked in until at least 2023.

The shift to a no-fault insurance model is intended to reduce legal costs and, in turn, lower premiums for customers. The no-fault system means that individuals will only ever deal with their insurance provider for claims, and it limits the ability to sue for pain and suffering beyond what is covered in the insurance policy.

In addition to the mandatory basic insurance provided by ICBC, there are also optional coverages available, including extended third-party liability, rental vehicle coverage, and new vehicle protection. These can be purchased through ICBC or private insurance companies.

No-fault insurance and its impact on rates

No-fault insurance, also known as the "enhanced care" model, was introduced in British Columbia in May 2021. Under this system, individuals involved in car accidents are unable to sue for damages, regardless of who is at fault or the severity of the injuries. Instead, they may be entitled to treatment, rehabilitation, and wage loss benefits in amounts predetermined by the Insurance Corporation of British Columbia (ICBC). Disputes are handled by an ombudsman, an ICBC fairness officer, or the Civil Resolution Tribunal, rather than the courts.

The impact of no-fault insurance on rates is complex. On the one hand, the average cost of car insurance in BC decreased from $1,832 per year to about $150 per month after the introduction of no-fault insurance. This reduction in rates can be attributed to the limitations on the ability to sue for damages.

However, it is important to consider the potential costs associated with the loss of the right to sue. In the event of an accident, injured victims might not receive full compensation for their injuries under the no-fault system. The previous tort system aimed to place an injured plaintiff in the same position they would have been in if the accident had not occurred, taking into account their individual circumstances. In contrast, a no-fault system typically awards accident benefits based on predetermined amounts, without considering the unique situation of each plaintiff. High-income earners, for example, may not receive full compensation for their economic losses as the benefits are based on average earnings.

Additionally, a no-fault system can leave vulnerable individuals at the mercy of insurance companies and claims adjusters to determine funding and compensation. The process of navigating the paperwork and administrative tasks can be challenging for those who need these resources the most. As a result, careful consideration is necessary to weigh the benefits of a no-fault system against the potential negative consequences.

ICBC's monopoly on auto insurance in BC

The Insurance Corporation of British Columbia (ICBC) is a provincial Crown corporation that has provided vehicle insurance to British Columbians since 1973. When it was established, ICBC held a monopoly on all automobile insurance in the province. However, in 1977, its enabling legislation was amended to allow private insurers to compete with ICBC in the market for optional or supplemental insurance. Today, ICBC continues to hold a monopoly on basic insurance while also offering optional additional coverage.

ICBC's basic insurance package, called "Autoplan," is mandatory for any vehicle registered and driven or parked on public streets in British Columbia. This package can be purchased from independent brokers across the province and includes protection from third-party legal liability, under-insured motorist protection, accident benefits, hit-and-run protection, and inverse liability.

ICBC's monopoly on basic car insurance has been a topic of debate in British Columbia, with the province's political parties taking differing stances on the issue. The New Democratic Party (NDP), which created ICBC, has regularly defended the publicly managed vehicle insurance system. On the other hand, the rival BC Liberal Party has promised to end ICBC's monopoly and open up the market to competition for all forms of insurance if elected.

One of the main arguments against ICBC's monopoly is the high cost of insurance in British Columbia. Drivers in the province pay the most for insurance in Canada, with an average premium of $1,832. This has been attributed to the lack of competition in the government-run insurance market. Additionally, ICBC's financial losses have been criticized by the Insurance Bureau of Canada (IBC), which has called the monopoly a "burden" on taxpayers, claiming that it has indirectly raised taxes for BC residents.

Despite the criticisms, there are also arguments in favour of ICBC's public auto insurance system. The NDP government has pointed to a 2018 IBC report suggesting that a competitive insurance model would lead to significantly higher rates for young drivers. Additionally, ICBC has taken steps to reduce premiums, such as overhauling its rate structure for liability insurance in 2019 and switching to a "no-fault" model in 2020, which is estimated to save the corporation billions in legal fees and injury claims.

Mandatory and optional auto insurance coverages

In British Columbia, auto insurance is provided through the Insurance Corporation of British Columbia (ICBC), a public insurance company. The mandatory minimum coverage is called Basic Autoplan, which includes up to $200,000 of Basic Vehicle Damage, $200,000 in Third-Party Liability, up to $1 million in Underinsured Motorist Protection, and Inverse Liability Protection. This basic coverage must be purchased from the ICBC, but additional coverage can be purchased from private insurers.

Third-party liability coverage is mandatory and protects you from damage you may cause to others and their property. You can also choose to extend this coverage up to $5 million through ICBC or a private insurer.

Uninsured motorist protection is also mandatory. This coverage protects you if you are in an accident with an uninsured driver.

In addition to the mandatory basic coverage, there are several optional coverages available through ICBC and private insurance companies. These include:

• Extended Third-Party Liability: This coverage protects you from paying for bodily injury and damage costs if you are found responsible for a crash. It also assists if you are held liable for damages, lost income, and care expenses for both the other driver and their passengers.
• Rental Vehicle Coverage: This coverage includes third-party liability coverage, accident benefits, underinsured motorist protection, collision, comprehensive, and loss of use coverage for rented vehicles.
• New Vehicle Protection: This coverage includes three product options to protect your new vehicle: New Vehicle Replacement Plus (NVR+), Replacement Cost Coverage, or Limited Depreciation Endorsement.
• Specified Perils: This coverage is similar to comprehensive coverage but at a lower price. It protects you from loss or damage to your vehicle from theft, fire, earthquake, explosion, lightning, windstorm, hail, and rising water.
• Loss of Use Coverage: This coverage helps you stay mobile after making a claim by covering your expenses for renting a vehicle, using taxis, or taking public transit until your vehicle is repaired, you are offered a settlement, or you reach your limit.
• Enhanced Roadside Assistance Coverage: This coverage provides reliable and timely assistance in case of a flat tire, battery jump-start, lockout, or towing.
• First Accident Forgiveness: This coverage helps you avoid a premium increase after your first accident, which can be especially helpful for new drivers building their driving record.

These optional coverages allow drivers in British Columbia to customize their auto insurance policies to fit their specific needs and budget.

Ways to get cheap auto insurance in BC

Auto insurance in British Columbia is expensive, with drivers in the province paying the second-highest auto insurance rates in Canada. The provincial government is the sole provider of third-party liability auto insurance, which is mandatory for all drivers. However, there are still ways to save on your overall insurance costs. Here are some tips to get cheap auto insurance in BC:

Buy the Right Coverage

Avoid unnecessary add-ons and pay only for the coverage you need to lower your premiums. For example, if you have an old car, you might not need collision coverage.

Maintain a Good Driving Record

Infractions, fines, and accidents will increase your insurance rates. Safe drivers with a clean record are rewarded with cheaper insurance.

Prompt Payments

Paying your premiums on time can save you money on late fees and may even lower your premiums.

Bundle Your Policies

If you have a house, motorcycle, RV, or other insurance policies, consider adding them to your auto insurance plan. Insurers often offer discounts when you bundle multiple policies together.

Safety Features

Installing safety features like winter tires and alarm systems can help reduce your insurance premium.

Stay with Your Current Insurer

Many auto insurance companies offer loyalty discounts to customers who remain with them for several years, especially if they add family members or multiple vehicles to their policy.

Choose the Right Car

Cars with high crash-test scores, low theft ratings, and less powerful engines tend to have cheaper insurance rates.

Defensive Driving Course

Completing a defensive driving course can make you a better driver and may lead to significant reductions in your car insurance premiums.

Usage-Based Insurance

Usage-based insurance policies monitor your driving behaviour and can lead to lower premiums if you consistently practice safe driving.

Compare Quotes

Don't just settle for the first insurance company you find. Take the time to compare multiple auto insurance quotes to ensure you're getting the best deal.

Frequently asked questions