ICBC drops insurance for luxury cars to fight off massive rate hikes
[vc_row][vc_column][vc_empty_space height=”52px”][vc_row_inner][vc_column_inner][vc_column_text]By Rob Shaw | The Vancouver Sun
VICTORIA – The Insurance Corporation of BC has outlined possible steep rate hikes for basic auto insurance, compounding to more than 42 per cent, are possible in the next five years if it can’t cut costs and claims.
The disclosure prompted the government to announce Wednesday it would no longer insure high-end luxury vehicles, to reduce the number of costly repairs and relieve pressure on basic rates for ordinary car owners.
ICBC said it could hypothetically have to raise rates 6.4 per cent in 2017, 7.9 per cent in 2018, 9.4 per cent in 2019 and 7.9 per cent in 2020 — all rates that exceed a 4.9 per cent cap that Premier Christy Clark has urged the Crown corporation to hold.
That’s in addition to a 4.9 per cent rate increase for basic auto insurance the corporation wants this year. Transportation Minister Todd Stone called the hypotheticals an “extreme worst case hypothetical situation.”
“I want to reassure the public that these are extreme projections that do not consider the actions the BC government and ICBC are taking to reduce the pressure on rates,” he said.
“We are not going to allow a scenario that would provide for that level of basic rate increases to actually happen here in British Columbia.”
Stone said one of the first steps will be that ICBC will refuse to insure luxury high-end vehicles worth more than $150,000, because costly repairs to those vehicles are driving up basic rates.
Legislation will be passed forcing those car owners to get private insurance, Stone said. Until then, as an interim measure, luxury car owners will have to pay double their ordinary basic insurance and ensure their premiums will fully cover the cost of any repairs.
The average repair bill for a high-end luxury car is $13,000, compared to $2,500 for a typical vehicle, he said. Such cars include Aston Martins, Bentleys, Lamborghinis and Maseratis.
Stone said the luxury vehicles are six times more costly to fix in a crash than ordinary vehicles, and 30 per cent more high-end cars are on the road in the past three years. Greater Vancouver has one of the largest concentrations of high-end luxury cars in North America.
The insurance changes only apply to private passenger cars, not commercial trucks, pick-up trucks, collector cars, limousines or motorhomes.
More changes are coming in future weeks and months to keep rates down, said Stone.[/vc_column_text][vc_column_text]
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[/vc_column_text][/vc_column_inner][/vc_row_inner][vc_empty_space height=”52px”][vc_row_inner][vc_column_inner width=”1/3″][vc_single_image image=”1034″ img_size=”full” alignment=”center” onclick=”custom_link” img_link_target=”_blank” link=”https://webrater.appliedsystems.com/WR/Default.aspx?GC=TKWI&LOB=AUTO&LANG=EN”][/vc_column_inner][vc_column_inner width=”1/3″][vc_single_image image=”1035″ img_size=”full” alignment=”center” onclick=”custom_link” img_link_target=”_blank” link=”https://highriskautopros.ca/request-a-quote”][/vc_column_inner][vc_column_inner width=”1/3″][vc_single_image image=”1029″ img_size=”full” alignment=”center” onclick=”custom_link” img_link_target=”_blank” link=”https://webrater.appliedsystems.com/WR/Default.aspx?GC=TKWI&LOB=PROP&LANG=EN”][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]Reference Link: http://www.ilstv.com/icbc-drops-insurance-luxury-cars-fight-off-massive-rate-hikes/[/vc_column_text][/vc_column][/vc_row]