Same Auto Insurance, Higher Price: BC Drivers Pay Much More than Alberta Drivers

VANCOUVER, March 21, 2019 /CNW/ - On April 1, British Columbia (BC) and Alberta will have substantially similar auto insurance systems. The key difference will be who sells auto insurance in each province and, as a result, BC drivers will continue to pay a lot more.

A recent MNP study, found BC drivers pay up to 60% more for their auto insurance than their neighbours in Alberta for similar coverages. MNP also found that BC drivers will continue to pay more even after adjusting for Insurance Corporation of British Columbia's (ICBC's) new risk-based pricing structure that will come into effect in September 2019.

As of April 1, 2019, both BC's and Alberta's auto insurance systems will have: 

• Tort-based systems with the ability to sue for pain and suffering;
• A limit on pain and suffering awards for minor injury claimants;
• Restrictions on the use of experts and expert reports;
• Similar mandatory coverage levels;
• Similar average injury claim costs: $50,658 in BC and $43,211 in Alberta (2017).

The key difference between the two provinces is that ICBC, a crown corporation, has a monopoly on mandatory auto insurance in BC, while in Alberta, drivers would benefit from competition and choice.

MNP's study obtained quotes, verified with an insurance broker, for 15 driver profiles in each province, comparing the price of auto insurance for the same drivers, with the same accident history and the same vehicles, in comparable locations, and at the same coverage level across both provinces. For example, a 55-year-old woman living in Vancouver with one at-fault accident who drives a 2016 Toyota Camry would pay $2,129 with ICBC, which is $730 more than what the same woman in Calgary would pay for comparable coverage.

According to data from ICBC and the General Insurance Statistical Agency (a statistical agency created and overseen by provincial insurance regulators), BC drivers pay the highest auto insurance prices in Canada, with annual premiums averaging $1,680. Current reforms in BC are not expected to reduce prices; in fact, ICBC is forecast to increase prices by nearly 25% over the next three years, beginning with the 6.3% basic rate increase on April 1, 2019.

For more information on the study and to see the driver profile comparisons, visit betterautoinsurancebc.ca.

Quotes:

"With the changes coming on April 1, the auto insurance systems in BC and Alberta will be substantially similar, with the key difference being who sells auto insurance in each province. That difference has contributed to drivers in BC paying more than their neighbours in Alberta for similar coverage."
– Susan Mowbray, Senior Manager, MNP 

"This study gives an apples-to-apples comparison of the price drivers are paying for similar auto insurance coverage in BC and Alberta, and clearly demonstrates the price impact of ICBC's monopoly. With drivers in BC paying up to 60% more for similar coverage than their counterparts in Alberta, the time has come to introduce competition into the BC marketplace and give drivers the choice they deserve."
– Aaron Sutherland, Vice-President, Pacific, IBC

About Insurance Bureau of Canada

Insurance Bureau of Canada (IBC) is the national industry association representing Canada's private home, auto and business insurers. Its member companies make up 90% of the property and casualty (P&C) insurance market in Canada. For more than 50 years, IBC has worked with governments across the country to help make affordable home, auto and business insurance available for all Canadians. IBC supports the vision of consumers and governments trusting, valuing and supporting the private P&C insurance industry. It champions key issues and helps educate consumers on how best to protect their homes, cars, businesses and properties.

P&C insurance touches the lives of nearly every Canadian and plays a critical role in keeping businesses safe and the Canadian economy strong. It employs more than 126,000 Canadians, pays $9 billion in taxes and has a total premium base of $54.7 billion.

For media releases and more information, visit IBC's Media Centre at www.ibc.ca. Follow us on Twitter @IBC_West or like us on Facebook. If you have a question about home, auto or business insurance, contact IBC's Consumer Information Centre at 1-844-2ask-IBC.

BACKGROUNDER

Comparing BC and Alberta Premiums: February 2019

To ensure an accurate comparison of premiums, MNP used an insurance broker in each province to gather and verify quotes for 15 different driver profiles. Customers usually choose from the lowest priced options available for the same level of coverage. Consequently, MNP compared British Columbia (BC) prices to the three lowest Alberta quotes for each driver profile, as well as the lowest premium.

Coverage levels for premium comparisons in each province include:

• $1 million in third-party liability
• Collision coverage with a $500 deductible
• Comprehensive coverage with a $250 deductible
• Uninsured motorist protection.

A Detailed Comparison of BC and Alberta Premiums

Driver Profiles	BC			Alberta
	Location	ICBC premium	Premium (New ICBC rate design)	Low premium	Average premium	Location
Experienced drivers without at-fault accidents
Small-business owner	Surrey	$2,058	$2,019	$1,399	$1,716	Calgary
Senior couple	North Vancouver	$1,457	$1,465	$1,295	$1,340	Calgary
Senior couple	Kelowna	$1,120	$1,077	$1,125	$1,138	Red Deer
Couple	Coquitlam	$1,693	$1,714	$1,125	$1,313	Calgary
Couple	Squamish	$1,479	$1,369	$1,125	$1,313	Airdrie
Inexperienced drivers
Young male	Prince George	$1,608	$1,603	$1,345	$1,649	Fort McMurray
Young male (one at-fault accident)	Vancouver	$2,897	$3,292	$2,209	$2,460	Calgary
Young female	Burnaby	$2,369	$2,567	$1,674	$1,778	Calgary
Young female (pleasure use)	Burnaby	$2,285	$2,488	$1,558	$1,659	Calgary
Experienced drivers with one at-fault accident
Woman (age 55)	Vancouver	$2,219	$2,096	$1,399	$1,821	Calgary
Woman (age 55)	Kamloops	$1,573	$1,462	$1,125	$1,429	Medicine Hat
Multiple drivers with different risk profiles insured on a vehicle
Family with learner driver	Langley	$2,232	$2,332	$1,395	$1,467	Edmonton
Family with learner driver	Kelowna	$1,688	$1,754	$1,125	$1,275	Red Deer
Recreational vehicles and motorcycles
Recreational vehicle	Victoria	$1,118	$1,055	$347	$347	Edmonton
Motorcycle	Fraser Valley	$2,190	$1,905	$1,703	$1,703	St. Albert

Note: MNP obtained the quotes in February 2019.

SOURCE Insurance Bureau of Canada

If you require more information, IBC spokespeople are available to discuss the details in this media release. To schedule an interview, please contact: Vanessa Barrasa, Manager, Media Relations, 416-550-9062, [email protected]

Related Links

www.ibc.ca