Aug 29 2007

British Columbians are paying some of the highest auto insurance rates in Canada and many drivers are wondering why.

This week it was revealed that, while premiums paid by B.C. drivers have gone up in the past few years, premiums paid by drivers in other provinces have gone down, substantially.

According to data from the General Insurance Statistical Agency, between 2003 and 2007, average auto insurance premiums fell by almost 16% in Ontario, 14% in Alberta, 24% in Nova Scotia, 37% in New Brunswick, 15.5% in Prince Edward Island and 21% in Newfoundland.

During that same period in BC, average premiums rose 5.1% between 2003 and 2006. BC’s 2007 premium data is not yet available but given the recent announcement of a 3.3% increase in basic rates coupled with a 3.8% decrease in optional rates, average premiums will likely increase, as about 56% of ICBC’s insurance business is basic insurance.

The Canadian Taxpayers Federation is blaming the higher rates in B.C. on the fact that ICBC has a monopoly on providing basic insurance rates and drivers here are paying the price.

“The evidence clearly shows that the government’s monopolization of the auto insurance market is a bad deal for BC consumers,” said Maureen Bader, BC Director of the Canadian Taxpayers Federation.

On Prince Edward Island, (P.E.I.) my car insurance would be $53 per month. I pay $116 per month in B.C.

However, there is something else to consider. British Columbia’s drivers do get a few breaks that drivers in P.E.I. do not.

Islanders for example are required by law to have their vehicles inspected annually at a cost of about $24 per year just for the inspection, and they can be fined over $200 for not having that inspection carried out. So, there’s just no putting off repairs.

P.E.I. vehicles must also be registered on an annual basis and proof of inspection and insurance is required. The annual fee for registration is about $80 on your average vehicle. If you want a new licence plate there is a fee for that as well.

Consumers should have the right to buy insurance from the company of their choice, whether it be the one that offers the lowest rate or the best service.

It’s time for government to have a serious look at how best they can do that and say good-bye to ICBC’s monopoly.
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