Richard Truscott is the Vice-President, B.C. and Alberta, Canadian Federation of Independent Business (Submitted).

COLUMN: ICBC is not just broke, it’s broken

Richard Truscott is B.C. and Alberta vice-president at Canadian Federation of Independent Business

Anyone who runs a business understands that consumers wield tremendous power.

Competition drives the creation of new efficiencies and innovations that enable companies to deliver the best product at the best possible price. Businesses that fail to adapt and change rarely survive.

However, ICBC’s 40-year monopoly on car insurance is a clear exception to this rule. It’s in a financial black hole. As its finances have plummeted, its bureaucracy has grown so much that it now employs twice as many staff as any other Canadian insurer its size.

It’s well documented that the corporation is a financial disaster. While many solutions are being put forward, ICBC’s preferred response is always the same: higher prices or worse benefits. With no competition, there is no pressure to take a hard look at its own operations to find efficiencies and savings. Rather, it continues to push big rate increases on customers as a “solution.”

This year, its basic insurance rates are going up 6.3 per cent. Since 2012, basic insurance premiums have grown a staggering 54 per cent while pleas from British Columbians for other options have been ignored.

Instead of bold leadership, we’re seeing Band-Aid solutions that will result in customers being gouged in the years ahead. In fact, ICBC’s financial filings call for an additional $1.17 billion in price increases over the next three years.

All this from a government-run insurance company that has lost more than $3 billion in the past three years. ICBC is not just broke, it’s clearly broken.

READ MORE: ICBC in ‘financial dumpster fire,’ minister says

Like many residents, business owners are fed up. A survey of independent businesses in B.C. found 75 per cent want ICBC’s monopoly ended. They want a choice in where to buy car insurance, to shop around for their insurance needs – just like the vast majority of other Canadians.

And why wouldn’t they? The Crown corporation is implementing changes on Sept. 1 that will significantly disadvantage businesses. For instance, over the next 10 years, prices for business vehicles will increase by an additional four per cent on top of all of its other increases.

It will also require every driver who may even occasionally use a vehicle to be listed on the owner’s policy. For small businesses, this may be extremely onerous. Business owners will need to provide ICBC with the driver’s licence number and date of birth of each employee, even if they operate a company car as little as once a month. In addition, 25 per cent of prices will then be based on the worst driver listed, regardless of how little that employee uses the vehicle.

As a cherry on top, the insurer is extending the time it takes to receive the full safe-driving discount from nine years to 40. Put another way, anyone who is 16 years old today will have to wait until they are 56 to receive the full claims-free discount.

ICBC says all of its changes coming next week are “revenue neutral” in the first year. That begs the obvious question: What kind of rate hikes will year two bring?

Businesses cannot afford the ICBC price increases. Or, more simply, they cannot afford the ICBC monopoly. Now, more than ever, it’s time to allow choice in B.C.’s vehicle insurance market.

Richard Truscott is the B.C. and Alberta vice-president at the Canadian Federation of Independent Business

Like us on Facebook and follow us on Twitter

Just Posted

Jumbo saga reaches finale

A three-decade long disagreement comes to a close.

Former Waterside property to be rezoned?

Invermere residents supported rezoning Waterside property.

Angel Flight

Flights take patients for medical appointments.

Potential pints and a paroled peacock

Radium council discussed a micro-brewery and one of the village’s wildlife mascots.

VIDEO: Cold snap brings ideal conditions for Okanagan icewine

Take an inside look at how icewine is made

PHOTOS: Eastern Newfoundland reeling, search underway for missing man after blizzard

More than 70 centimetres of new snow fell overnight, creating whiteout conditions

Prince Harry, Meghan to give up ‘royal highness’ titles

‘Harry, Meghan and Archie will always be much loved members of my family,’ says Queen Elizabeth II

B.C. society calls out conservation officer after dropping off bear cub covered in ice

Ice can be seen in video matted into emaciated bear cub’s fur

Calls for dialogue as Coastal GasLink pipeline polarizes some in northern B.C.

Coastal GasLink is building the 670-kilometre pipeline from British Columbia’s northeast to Kitimat on the coast

Closed mills, housing surge support a positive forecast for lumber industries

B.C. lumber producers have closed mills accounting for 18% of province’s capacity, RBC report says

Good Samaritan pays part of rent for B.C. woman facing eviction in can-collecting dispute

Zora Hlevnjak, 76, supplements her pension by collecting cans and receiving public donations

Kelowna’s ‘Baby Mary’ finds biological parents after more than 30 years

Geneologist and DNA test helped her connect with her biological parents

Kelowna hotel to award couples for baby-making with Nooner deal

The deal includes a free stay every Valentine’s Day for the next 18 years

Most Read