The beginning of September marks a wide number of changes to auto insurance in British Columbia. The biggest change, above all, is the move to a driver-based system.
Shifting to a driver-based system
The changes, which were first proposed in August of 2018, focus around the move to a driver-based system. This means that at-fault crashes will be tied to the driver, rather than the individual that owns the vehicle.
ICBC’s previous rate structure, which is more than 30-years-old, was built around insuring the vehicle, rather than the driver. This allowed discounts to drivers even if they had multiple crashes.
A driver with no crashes could be paying the same premium as a driver with three at-fault crashes in a year. Good driver’s shouldn’t have to continue paying more to cover the costs for those who cause crashes or present a higher risk on the roads.
A person’s “driver factor”
Now, each driver’s experience and crash history will play a bigger role in determining premiums.
Each driver will have an individual discount called the “driver factor,” which represents their risk on the road. It looks at a driver’s experience, crash history, and if they’re a senior or new resident.
“It primarily looks at the first two factors,” says Tyler McGilvery, spokesperson for ICBC. “It’s represented as a number with three decimals. In general, a lower number is better and a higher number is worse.”
This means that someone with a safe driving history would likely have a lower number. Someone who has several at-fault crashes would have a higher driver factor, thus increasing their premium.
How multiple drivers will affect your insurance premium
When renewing auto insurance under the new system, the number of drivers who use a vehicle will also play a part in a person’s premium. This, according to ICBC, helps ensure that if one of the listed drivers causes an at-fault crash, they’ll be held accountable.
McGilvery tells that in most cases, the principal driver’s driving record and “driver factor” will account for three-quarters of their insurance premium.
The remaining quarter will lie upon the additional drivers using the vehicle and their driver factor. Any number of additional drivers can use the vehicle as well if they’re registered.
In the case that there are multiple other drivers using the vehicle, the two users with the highest risk factor will have the most influence over the principal driver’s insurance premium.
Paying off at-fault claims
Paying off at-fault claims is another aspect of ICBC’s auto insurance which is being addressed.
ICBC’s system allows customers to repay at-fault claims, which is a unique feature that many other insurance companies don’t offer. However, paying off claims can, in essence, mask a driver’s risk to the public.
McGilvery says that ICBC consulted the public about this feature in 2018 and now, driver’s will have a limit on claim repayments. The new rules state that a driver can still pay off at-fault claims but only if they’re under $2,000.
He also adds that the cost of crash doesn’t necessarily impact an insurance premium — it’s about whether there’s an at-fault crash and how recently it took place.
“We measure where the crash falls in the timeline,” he says. “More recent crashes will have a greater impact [on a driver’s premium] than older crashes.”
New discounts for safe drivers
The changes coming into effect this September also include a handful of new discounts for safe drivers.
ICBC has increased the insurance discounts for safe driving, meaning that drivers can receive discounts for up to 40 years of driving experience. The previous system, which worked like a discount ladder, capped off discounts after a certain amount of time.
“The previous model had steps — each year goes up or down depending on how you move,” says McGilvery. “Under the previous model, discounts were capped after nine years of safe driving. Our new system gives 40 years of discounts, which are more gradual but give a greater reward in the end.”
Discounts will also be available for vehicles with original, manufacturer-installed automatic emergency braking (AEB) technology. Vehicles that are driven less than 5,000 km per year will also be eligible for a discount.
According to the ICBC website, a photo of your current odometer reading will be required upon renewal. A car’s owner manual, as well as a dealership, will know whether or not a car is equipped with AEB.