Dear Editor:
RE: Lack of competition… The Link, October 22, 2011
Thank you for the opportunity of responding to an article you published from the Fraser Institute’s Neil Mohindra about auto insurance in British Columbia.
The majority of the article was based on the findings of the Fraser Institute’s yearly report on auto insurance across Canada. Their report comes to the same conclusions every year and consistently misrepresents the average auto insurance premium in B.C., compares provinces while admitting this is difficult to do, and criticizes ICBC for paying out too much on claims. Every year, the report reveals a clear bias in its methodology towards private insurance rather than using actual facts.
For example, the numbers the report cites as to the cost of auto insurance in B.C. are not based on what people are actually paying in B.C. and are incredibly dated. For example, the 2011 report seems to be based on the years 2003-2005 for some reason that is not clear.
Our average premium for 2010 was less than $1,100. While there will be times that an increase in our rates is needed, the fact is that we have not increased our rates since 2007 and have put in place a number of rate decreases since that time.
You can travel across Canada and find a range of public and private auto insurance and diverse arguments both for and against each system. We believe our system in B.C. works for a number of reasons.
We know some provinces offer lower-priced auto insurance but we also know some others offer higher-priced auto insurance – including some of those with private insurance. Our focus in B.C. is to give our customers the best possible coverage for the lowest possible cost.
Any discussion on insurance should be based not just on what you pay but what you get for your money – what is the quality of the insurance coverage given? After all, is there value in paying for a product that really doesn’t benefit you when you need it?
Mr. Mohindra’s article mentions Alberta on a couple of occasions. While you may be able to get a cheaper insurance premium there, they fail to point out that our customer’s medical and rehab benefits are three times more than those offered in Alberta, New Brunswick and Ontario. In comparison to our $150,000 in medical and rehab coverage in B.C., those three provinces offer $50,000 while Nova Scotia provides $25,000.
If we’re making comparisons between provinces, which we agree is difficult to do, it should also be noted that drivers in Alberta, New Brunswick and Nova Scotia, are limited in what payments they can receive. Those provinces have systems that are variously based on caps or deductibles on pain and suffering awards. This is not the case in B.C. where drivers are entitled to take the at-fault party to court for damages.
In addition to offering our customers some of the best insurance coverage in the country, we invest approximately $50 million on road safety projects and campaigns every year to make our roads safer for you and your family. Our network of broker partners also offers our customers unparalleled convenience, access and advice through hundreds of locations across the province.
We do all of this while keeping our operating costs low compared to the industry average and our customer satisfaction scores are consistently positive. While you can argue that no single system is perfect, we are working hard to provide excellent customer experience for British Columbians.
Kellee Irwin
Vice President, Personal Insurance
ICBC
