Icbc doubling rates on cars over $150k-

And they soon won't be insuring exotic cars at all

Highways minister makes an example out of the Ferrari



ICBC will stop insuring high-end luxury cars
LOCAL
by JILL DREWSPosted Nov 23, 2016 3:04 pm PST Last Updated Nov 23, 2016 at 5:41 pm PST


Government getting out of the business of insuring high-end luxury cars

VANCOUVER (NEWS 1130) – Driving your Bugatti around town will likely cost much more in the near future. The BC Government is planning to stop allowing owners of luxury vehicles worth more than $150,000 to get their insurance through ICBC.

BC’s transportation minister made the announcement at an ICBC claims centre in Vancouver. Todd Stone presented two cars, one is a rare type of Ferrari and the other a 2005 Toyota Corolla. Stone says it cost $6,000 to make a repair to the bumper of the Ferrari, the same amount it cost ICBC to write off the Corolla.

As you’ve heard many times, ICBC says the number of claims and the cost to settle them keep climbing. ICBC is asking to raise rates 4.9 per cent this year. That follows a more than five per cent increase last year. Stone says the BC Government wants to make sure costs of repairing luxury cars are not impacting basic rates for drivers of cheaper ones.


According to Stone, there are about 3,000 cars worth more than $150,000 insured in BC this year, a 30 per cent increase from three years ago. He says it’s unfair to expect drivers of average cars to subsidize the cost to fix luxury cars. “Right now, whether a person drives a $25,000 Honda Civic or whether that person drives a $200,000 Lamborghini, their insurance rates are similar, while the costs of repair are substantially different… When these more expensive vehicles get into a crash, it costs approximately six times more to fix them because these vehicles are rare. They’re also built using high-end technology and much more expensive materials.”

This will take new legislation to implement, but until then, luxury vehicle drivers will pay at least double the rate of the average car owner so the premiums will cover the cost of repairs. Stone says the government will move on that change as soon as possible. Drivers of luxury cars will still be required to have a certain amount of insurance and will be expected to find that through the private sector.

There’s no word from the province on whether private insurance companies are prepared to provide basic luxury car insurance. We’ve reached out to providers and have not yet had response.

Commercial vehicles, pick-ups, RVs, collector cars and limos will be exempt.

This is one of a number of actions that government and ICBC will be rolling out over the coming weeks and months to continue to address cost pressures on rates.

ICBC will stop insuring high-end luxury cars - NEWS 1130

 

maybe it won't be so bad if they allow true competition in this space....

makes me think...what do people in Alberta pay for a 458 or 430 for insurance ?

 

The most expensive claims are from injuries or death, not from repairing vehicles. I seldom heard super cars kill pedestrians, but very often, huge double cabins do.
I think it's near election, politicians are trying to gain sensation, they want people to think that they are helping the majority (who don't own super car). Just like the investment home tax if not being rented out. How on earth can you determine if this house is being left empty? For example, if I have lots of money, I can live in West Van during the weekend and back to Shaughnessy on week days.
Then, if I buy a very good quality house which I want to keep for my son, I think he's going to marry his girlfriend soon in few years, of course I don't want to rent it out, thinking that the tenants will damage the house so I will hand over a bad quality house to my son later. If they really want to solve the rental problem, why not use the crown lands to build government rental housing instead of forcing people to rent their property.
And speaking about Ferrari insurance with ICBC, even if you only pay for the plate (no insurance), still they will increase the price every year. 458 Spider only plate was $2,000 in 2013, now $2,600. I can say, I'm actually supporting those Corolla drivers.

 

When you say plate only - you are talking about the basic mandatory icbc insurance ?

I think what they are talking about is getting icbc out of the over $150K car business entirely not just for optional coverage...so they will leave it to private insurance companies to play in this arena.

How has this worked out in Alberta and other provinces where you have private insurance for exotics ?


Maybe some owners can chime in here:
What do people pay with say 10+ years of safe driving experience, no tickets points / accidents ...for a 430 or 458 ?

Thanks

 

Legislative change would be required for ICBC to cease to provide basic mandatory insurance ($200K third party liability and accident benefits) for all BC vehicles, regardless of value of the vehicle. My understanding is that current rates for "basic / mandatory" are based on driver experience / claims history and geographic location, i.e, vehicle value is not a factor. My further understanding is that legislative change would be required to introduce "vehicle value" as a factor in setting rates for basic mandatory coverage. However, ICBC would not require legislative change to simply decline to provide optional extended liability coverage and "own damage" coverage (collision and comprehensive) on vehicles with a value over a certain amount. They can do that right now.

In one news briefing, I recall mention that legislative change is under consideration. Perhaps such legislative change would pertain to vehicle value as factor in rates for high-value vehicles or perhaps is pertains to substantive changes in current partial no-fault scheme, e.g., a complete no-fault scheme for injury and/or property damage.

Jon

 

Interesting. Thanks.

I heard that while they are awaiting legislative changes that they are planning on doubling the premiums for the over $150K crowd. Great way to milk this for all they can, as I'm imagining significantly lower rates in the private marketplace - if they allow true competition.

Looks like an easy way to pin the blame on exotic car owners for years of the government milking ICBC's revenue like a cash machine for general revenue, and now faced with an election, and big ICBC increases a convenient bogeyman emerges..The big bad ferrari owner.

Even though I'm guessing the exotic owners will significantly benefit with true competition with lower rates - it seems really shortsighted -- to sacrifice all of that ongoing revenue from exotics, for the simple political purpose of blaming the 43% insurance increase they need on a small group of drivers - when the true actuarial risk from these cars is likely not even close (low kms driven few cars out there, not driven in inclement weather, etc)

 

To the best of my knowledge and as was previously noted by "mik458spider", claims costs from injury claims continue to be greater than for material damage claims. However, material damage costs have increased substantially over the years, as well. More sophisticated cars and parts across all brands, have contributed to increased material damage costs e.g., headlight housings, larger glass, airbags, etc..

I agree that an actuarial assessment, as to the extent to which damage to high value cars is driving the overall claims costs, would be interesting. I wouldn't agree, however, that private insurers will necessarily lower the rates for Ferraris et al, particularly for less experienced drivers. There might be some niche insurance providers who can make money in the high value car market but they would be very selective in who they insured.

I also agree that the provincial government should keep their hands off insurance premiums.

 

They won't even insure a Lamborghini or Ferrari after they change the laws. This is why I didn't buy a Superleggera twice. I started hearing rumors about crazy premiums or flat out no insurance what so ever. If the clowns at ICBC stop insuring them everyone should have the option of opting out of ICBC coverage. They made huge profits for years and siphoned it off to the government and now they are in trouble and are using exotics as an excuse. BS!

 

Way to much government intervention these days.

 

In today's Vancouver Sun:

High-end car dealers not consulted as ICBC stops insuring them | Vancouver Sun

High-end car dealers not consulted as ICBC says it will stop insuring expensive autos


CBC is making a mistake by “pulling the pin” on luxury-car insurance rather than adjusting rates, industry experts say.

Wednesday, Transportation Minister Todd Stone announced that the Insurance Corporation of B.C. is moving to end insurance for vehicles valued $150,000 and higher, a change he said will save $2.3 million in claim costs annually.

Stone said the number of luxury vehicles in B.C. has risen 30 per cent, to 3,000, in the past three years.

Mark Edmonds, general manager at Ferrari-Maserati of Vancouver, said many in the luxury-vehicle industry felt “side-swiped” by Stone’s announcement and are trying to make sense of what it means for their clients.

Edmonds believes his clients would understand if they were forced to pay premiums based on their vehicle’s value.

“They get that this is an expensive car, they probably should pay more than a guy with a (Honda) Civic,” he said. “They’re not naive. Tires are more expensive, brakes are more expensive, oil changes are more expensive. The car requires 94 octane gas. They get that.”

Edmonds questioned why ICBC is “just pulling the pin on” insuring luxury vehicles without consulting industry members or adjusting premiums to reflect their higher values.

“If they’re off whack, then the answer to that is to adjust the premiums accordingly, because I do think they have an obligation to provide an insurance mechanism for every type of vehicle and driver in the province,” said Phil Garrow, owner of Sea to Sky Exotic Car Rentals.

“They’re not a private company. They’re someone who essentially is the insurance company in British Columbia. So for them to just arbitrarily say, ‘We don’t want to handle X segment of the market,’ is ludicrous.”

Garrow said seven of his fleet’s 13 high-end luxury vehicles — which includes Lamborghinis and a Ferrari — will be impacted by the change.

NDP critic Adrian Dix said ICBC should update its rate book to properly price its product rather than create a new structure.

“People who drive these cars should simply pay for the cost of their insurance — period,” Dix said. “If you are saying it’s legal to drive a Ferrari in B.C., ICBC should be able to figure out how to insure it. ICBC should be at least that competent.”

Premier Christy Clark said “taking exotic cars out of the rate pool for everybody else” is one example of coming change to drive down ICBC rates.

“If you are driving a Lamborghini and you get a ding on your door, you are going to have to figure out how to fix that,” she said. “The person who drives a Honda is not going to be covering the cost of the $36,000 replacement door for your Aston Martin. Sorry, if you can afford a car that is that expensive, you can afford to fix it yourself.”

 

According to Christy "“The person who drives a Honda is not going to be covering the cost of the $36,000 replacement door for your Aston Martin. Sorry, if you can afford a car that is that expensive, you can afford to fix it yourself.”

Is there even a single Aston registered in BC that has a $36,000 door ?

The only Aston that I can think of that might have a door that costs that much MIGHT be a 177 -- is there even one of those IN BC ?

 

What if the guy in the $6000 Honda dings your Aventador?

What do owners of older (ie 25+ years old) exotics do?

 

The media releases are not clear as to whether the coming changes affect mandatory "basic" and / or "optional" coverage and seem to conflate the two. For example, e.g., from the provincial government's (not ICBC's) website: http://news.gov.bc.ca/releases/2016TRAN0368-002487.

With respect to older cars, that media release includes the statement: "The new rates will apply to private passenger cars only, and not commercial trucks, pick-up trucks, collector cars or limousines. The new rule also will not apply to RVs."

Older cars, such as my 328, may qualify for "collector" status. Sure hope that continues. It's a great deal.

 

That presents an interesting dilemma...an F40 and F50 would qualify for collector plates, and in 2 years so would a 2003 enzo...but they are all north of 1M.

Would they still keep insuring these ?

Looks like guys with 355's and older will be ok - and most 360's...but what would happen if with a car like a 360 cs ? worth over $150K now, and not quite ready for collector plates for a couple of years?

 

Don't worry guys, after election everything will be back to normal. The polling shows that Christy's voter are getting less, so she is trying to become a robin hood now, stealing from minority to give to majority. It is no secret that in Vancouver today, if you talk about plan to make rich investors lose money, or wildly accusing rich people are economic criminals, or talking against immigration, many people will give you thumbs up, even your mouth is bigger than your brain.

 

Do you actually think that an NDP government would be more empathetic to owners of high-value cars?

 

NDP is even worse. Actually the NDP started this by playing against the rich. Unfortunately the society is not healthy IMO, people actually like it when they try to direct the problem instead of giving a solution. It's no secret that even you cannot make people to be able to afford a house, as long as you can hurt those who already owned a house (make them lose money), people (who don't own a house) will vote for you. Because NDP is booming in polling, now Liberal is also playing the same game, the robin hood tactic.
If 150k price tag is the standard, not only Ferrari or Lambo. Even some Mercedes, Audi or BMW cannot buy insurance. Canada will be the first country in the world to do so. So many years of lecturing others about free market, now we have politicians who are expert in abusing the free market. I really hope this is temporary due to election. If not, I will consider moving to other place.

 

+1

 

Yeah, this is pretty crazy. Heard about this the other day.

Considering Tesla, Audi, BMW, Benz, and many other luxury, but not crazy luxury brands easily get up to 150, what do all these people plan to do?

As well, even if repair costs are higher, what's the total cost payouts or claims per year on these 3000 cars? What about compared to regular cars?

Why not just scale vehicle value against driving record/insurance cohort and calculate it all that way? Seems really weird to me. It also feels bad that driving a 2001 911 costs me over 3500/year because I'm 25, and the car is worth less than a Honda Accord that's new. Why am I being gouged, and I'm the safer driver out there?

Feels very bad.

 

This is all a political play. ICBC is a scam insurance company. They need to get rid of it and allow competition.

I have a perfect driving record with full discount (43%) and pay nearly $4000/yr for my BMW M6. Ridiculous. And with these retarded new rules, it will be even more.

 

Find another insurance company. 4k for an M6 is way too high.
My 599 is 2k, My new Maserati GT is 1400. all my other cars are in the 1100 range.

 

The problem with comparing insurance rates between provinces is that the provinces have different compensation schemes that affect claims costs and rates e.g., various forms of no fault versus tort. BC could change its "mostly tort / partial no-fault" scheme, as was contemplated about 20 years ago. There are many competing interests with different professions making money from the current scheme. And there are no "perfect schemes", as the Ontario motorists, insurers, medical and legal professions would know from the various changes they have experienced over he past several years.

 

That sounds a bit high for a bmw,I only pay $2400.00 with 43% discount on my murcielago.
I think you will be o/k with the new rules because it's only on cars that are over 150k.

 

My friend just insured his brand new Huracan via ICBC and he's paying $4k/yearly.

 

$3600/year. Full discount (43%). My 355 and 550 are cheaper.

Car is a 2014. The MSRP was $170k or so.

My 2012 S63 was also $3600 and I had to apply to get the coverage since it was on ICBC'***** list.

Just doesn't make sense to me that we pay so much when similar cars across the country or in the US pay less than half in some cases.

This whole targeting $150k+ cars is pandering to the masses that are upset about inequality before the upcoming election. Their insurance premiums on luxury cars are profitable...it doesn't make any other sense.