Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

Petition Pushes ‘Fairer Form of Auto Insurance’

with 2 comments

The Tyee continues the campaign for Pay As You Drive car insurance, which this blog also has done for some years (as you can see from those links). As has the Tyee: in fact that was where Cliff Cipriani read about it. And he has now launched an online petition and this video

There is some choice in car insurance in BC. ICBC however is compulsory for “third party risk” – in other words the costs that might be incurred by someone else – also known as “legal minimum”. To cover your own risk – “optional insurance” – can be taken out with ICBC or private insurers. When ICBC was set up, as a way of keeping local insurance brokers on side, the new corporation was required to only sell through a brokerage. It is not allowed to sell insurance directly. Of course, as with many other things, you can do lots of things for yourself on line these days. that’s the way a lot of people buy air tickets now – so much so that travel agents now cannot get commission from the airlines but have to charge a feee to their customers. You can buy optional car insurance on line – and over the phone – too, and I would recommend  that if you live in BC, you check out the costs compared to ICBC. I know I save money and get better coverage by buying mine on line. YMMV.

What is mistaken is the assumption that ICBC is “supposed to pursue the public interest”. If that were the case, there would have been PAYD years ago. After all, ICBC commissioned the report from Todd Littman – and then sat on it. And their spokesperson is willfully misleading when he talks about Norwich Union. They wound up their PAYD pilot due to other market pressures – nothing to do with “lack of interest” – and actually some longer time ago than “last year”.

The risk of collision is directly proportional to distance driven. So in terms of the risk assessment, charging people who drive much further than average is very bad insurance practice. In general, I support the idea of public insurance. The evidence is quite clear that we get a better deal from ICBC overall than similar places that rely solely on the private  sector – even if it is regulated. I also think that ICBC does a very good job at promoting safer roads – for example by their encouragement of the use of roundabouts. Private sector insurers don’t do that. But the mulish resistance to PAYD from North Vancouver has to stop. Please sign the petition.

Written by Stephen Rees

July 12, 2010 at 4:12 pm

2 Responses

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  1. I strongly support Pay as You Drive insurance, but understand there are limitations to the fairness of any system.

    Someone who commutes from Newton to BCIT is a higher risk than someone driving from Abbotsford to Trinity Western or the teacher who reverse commutes from Oakridge to Sunshine Hills or the security guard who works nights.

    I live near one of the top crash intersections in BC so I’m in one of the highest rate zones in BC.
    At the same time I’m in the lowest rate category because of my age and years of driving experience.

    Pay as you drive would help me because I only drive 7500km per year. It would be hard to prove, but 30-35% of that is our two week summer vacation to small town BC/Alberta where the risk is lower.


    July 13, 2010 at 12:25 pm

  2. This is something I’d fully support. When I did own a car it was cheaper for me to always drive. Even if I wanted to take transit. It would of cost me more to do so. My insurance was quite cheap compared to most people as I only had the very basic and third party liability.

    Paul C

    August 8, 2010 at 2:41 pm

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