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ICBC applies for two-year rate freeze for basic insurance

But there has been no word on optional insurance rates

A two-year ICBC rate freeze is on the way, if the BC Utilities Commission approves an application from the Crown corporation.

If approved, it will mark five years of no increases to basic ICBC rates for drivers in British Columbia.

"Our government is committed to keeping costs down for all British Columbians," Premier David Eby said in a release. "Holding firm on ICBC's basic insurance rate for two more years will help millions of drivers with their monthly bills amid global inflation."

With the introduction of enhanced care in May 2021, Eby said auto insurance rates in British Columbia have gone from some of the most expensive in Canada to being among the most affordable. A Canada-wide rate comparison report by Ernst & Young looked at 30 different driver profiles and compared how much auto insurance would cost in nine provinces across Canada. The report found British Columbians pay among the lowest auto insurance rates in Canada.

The enhanced care model, also known as no-fault, placed strict limits on compensation to victims of motor-vehicle accidents. The model, which came into effect on May 1, 2021, means that people injured in a motor vehicle accident no longer have the right to take an at-fault driver to court — other than incidents in which a driver has committed a criminal offence.

The new model, which has led to a decrease in insurance premiums, is being challenged in court by crash victims and lawyers as being unconstitutional.

ICBC has not declared what optional insurance rates will look like in tandem with a basic insurance rate freeze.

In the provincial government’s second quarterly report, released on Nov. 25, ICBC is projected to lose $298 million this year.

"This financial update from ICBC should be seen as incredibly disappointing news for ICBC's customers, as well as taxpayers in British Columbia who will ultimately bear the cost of these losses,” said Aaron Sutherland, vice-president Western and Pacific for the Insurance Bureau of Canada, said in a statement.

“After years of financial turmoil, the introduction of no-fault was supposed to help stabilize ICBC's financial situation by eliminating the right to sue in most cases and introducing strict limits on the care and recovery benefits it provides. As a result, the first year of no-fault saw ICBC spend 30 per cent less helping accident victims recover from their injuries. Despite this, ICBC is once again forecasting a financial loss.”

Sutherland said ICBC in 2021 — the first year of no-fault insurance — spent more money on operating expenses than it did on injury claims.