Private Insurance Vs Icbc: What's The Better Option?

In British Columbia, all drivers must have a policy that includes the ICBC Autoplan Basic Car Insurance. However, drivers can choose to purchase additional coverage from ICBC or a private insurer. Private insurance offers more flexibility for lower premiums and broader coverage, but it also means dealing with multiple insurers and more paperwork in the event of an accident. While some argue that private insurance provides more choice and competition, leading to better rates for drivers, others point out that public insurance in BC is already highly affordable compared to other provinces. Ultimately, the decision to stick with ICBC or opt for private insurance depends on individual preferences and needs.

ICBC's Basic Autoplan Insurance

• Third-party liability insurance, which covers both bodily injury and property damage up to $200,000.
• Underinsured motorist protection, which covers medical bills if the other vehicle involved in the accident had insufficient insurance. This provides coverage of up to $1 million per person.
• Medical coverage of up to $150,000 per person.
• Hit-and-run coverage of up to $200,000.
• Inverse liability coverage, which protects you if you're in an accident where local laws don't allow you to make a claim against the at-fault party.

The basic plan is designed to ensure that all British Columbians who own and drive a motor vehicle are protected with a fundamental level of coverage. It is important to note that ICBC policies are always the primary policy and will provide the initial source of compensation after a crash.

While ICBC's Basic Autoplan Insurance is mandatory, drivers in British Columbia have the option to purchase additional coverage. This additional coverage can be obtained either through ICBC or from private insurance providers. This supplementary insurance is useful as the basic plan has low maximum payouts and higher deductibles.

Private Auto Insurance Companies

In British Columbia, auto insurance is mandatory for all motorists. The Insurance Corporation of British Columbia (ICBC) is the primary insurer in the province, and all drivers are required to obtain an ICBC insurance plan. This basic coverage includes up to $200,000 in bodily injury and property damage for third-party liability, underinsured motorist protection, medical coverage, and hit-and-run coverage.

While ICBC serves as the primary insurer, private insurance companies also operate in British Columbia. These private insurers offer additional coverage beyond the basic ICBC plan. Private auto insurance companies provide drivers with the option to purchase supplemental policies, such as collision or comprehensive coverage. One of the benefits of private insurance is the flexibility to choose lower premiums versus higher deductibles. Private insurance can also cover items that may not be included in the basic ICBC plan, such as sound systems and pet protection.

There are several advantages to choosing a private auto insurance plan as a supplement to the mandatory ICBC coverage. Firstly, private insurers often offer lower premiums and deductibles, giving drivers more options to customize their coverage. Secondly, private insurance provides broader coverage for items like built-in sound systems and pet protection, which can be important for drivers who want to ensure their vehicles are fully protected. Additionally, some private insurance plans offer first accident forgiveness, 24/7 emergency claims services, and bundled services or packages that include roadside assistance and travel protection.

When considering private auto insurance, it is essential to research the reputation of the company, especially regarding customer service and claims handling. It is also important to remember that choosing private insurance means dealing with multiple insurers in the event of an accident or claim, which can result in additional paperwork and complexity. Ultimately, the decision to stick with ICBC or opt for private add-on services depends on personal preferences and the level of coverage desired.

Cost of Private Insurance

In British Columbia, auto insurance is mandatory for all motorists, and the crown corporation ICBC is the primary insurer for all BC drivers. However, private insurance companies offer additional coverage beyond the basic ICBC plan. The cost of private insurance in BC can vary depending on several factors, and there is an ongoing debate about whether private or public auto insurance is more affordable.

The Insurance Bureau of Canada (IBC) commissioned a report comparing auto insurance rates in BC, a province with a public auto insurer, to Alberta, a province with a private auto insurance regime. The report found that BC drivers paid up to 42% more for their auto insurance than drivers in Alberta for similar coverage. However, BC's broker association, the Insurance Brokers Association of British Columbia (IBABC), disputed these conclusions, arguing that no two provinces in Canada have identical driving exposure or auto insurance systems, making an "apples-to-apples" comparison impossible.

The cost of private insurance in BC can depend on various factors, including age, gender, and driving experience. For example, a new driver in BC with two years of experience would pay ICBC $4,319 to insure their 2008 Honda Civic, while the same driver in Calgary would pay $3,491, a significant difference in pricing. Similarly, a 49-year-old small business owner in Surrey, BC, driving a 2014 Ford F-150 would pay $1,953 with ICBC, while the same person in Calgary would pay $1,380. These examples illustrate that the cost of private insurance in BC can be higher than in a province with a private auto insurance system.

On the other hand, private insurance companies in BC can offer lower premiums and deductibles than ICBC. Private insurers provide more flexibility, allowing customers to choose between higher premiums and lower deductibles or vice versa. Additionally, private insurance can offer broader coverage, including items such as built-in sound systems and pet protection. Private insurers also offer additional bundled packages with features like emergency roadside assistance and travel protection.

The decision to stick with ICBC or opt for private insurance depends on individual preferences and needs. While private insurance can provide more comprehensive coverage and flexibility, it also comes with additional costs, paperwork, and the hassle of dealing with multiple insurers in the event of a claim. Ultimately, the cost of private insurance in BC can vary depending on personal circumstances and the specific plan chosen.

Benefits of Private Insurance

While ICBC serves as the primary insurer in British Columbia, private insurance is also available as an optional supplement to ICBC coverage. There are several benefits to choosing private insurance.

Firstly, private insurers offer more flexibility, with lower premiums and higher deductibles. This means that you can often get a better deal by paying less upfront for your insurance, although you will pay more if you need to make a claim. Private insurance can also be cheaper overall than adding more ICBC coverage, and you can choose a policy that suits your individual needs, with factors like your age and gender playing a role in the cost.

Secondly, private insurance offers broader coverage than ICBC. This includes things like built-in sound systems and pet protection, which covers veterinary bills in the event of an accident. Private insurers also offer additional bundled packages that may include emergency roadside assistance and travel protection.

Another benefit of private insurance is the availability of 24/7 emergency claims services. This means that you can make a claim at any time of day or night, giving you peace of mind in case of an accident or emergency. Some private insurers also offer authorised direct repair facilities, making the claims handling process more convenient.

Finally, some private insurance plans offer first accident forgiveness, meaning there is no financial penalty or loss of discount after your first accident in a five or six-year period. This can be a valuable feature, especially for new or inexperienced drivers.

Drawbacks of Private Insurance

While private insurance can offer broader coverage, lower premiums, and more flexibility, there are several drawbacks to opting for it over ICBC.

Firstly, there is the added hassle of dealing with two insurers, which means twice the amount of paperwork and two separate bills to pay each month. This can be particularly inconvenient if you need to make a claim, as you must inform both providers, even if you only end up filing a claim with one carrier.

Secondly, while private insurance can offer lower premiums, it often comes with higher deductibles. This means that while your monthly payments may be lower, you could end up paying more out-of-pocket if you need to make a claim.

Another drawback is that private insurance is not mandatory and only provides additional coverage. This means that if you opt for private insurance, you will still need to purchase the mandatory basic auto insurance from ICBC, which covers the minimum level of insurance required in British Columbia.

Lastly, the process of shopping around for private insurance and comparing rates can be time-consuming and complex, and you may need to seek help from a broker to find the best rates.

Ultimately, the decision to stick with ICBC or opt for private insurance depends on individual needs and preferences.

Frequently asked questions