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Opinion: B.C. car insurance not so bad after all

Sunday, October 4th, 2015

By Monique Keiran | Time Colonist

When ICBC and Transportation Minister Todd Stone announced they were going to work to find ways to reduce the proposed increase to B.C. vehicle-insurance rates, a wee flame of hope sparked inside the brains of B.C. drivers. Nobody likes rate increases.

The 6.7 per cent hike the Insurance Corp. of B.C. said it would need to cover the past year’s jump in injury claims represents just one more hit in the upward trending cost in this area.

Insurance in B.C. is said to be among the most expensive in Canada. The lack of competition is touted as the reason. Drivers in B.C. can purchase extras from other insurance agencies, but they must get their basic insurance from ICBC. Without market competition, rates start high and stay high — higher than drivers pay elsewhere in Canada.

Or so the reasoning goes.

A friend’s experience belies that commonly held belief. She moved to Alberta early this year. Within two weeks of her arrival, a speeding pickup truck lost control on an icy highway west of Edmonton and totalled her five-year-old car. Everyone walked away unhurt, fortunately.

When she got the go-ahead from the insurance company, my friend bought a used car. She replaced her Toyota with a Mazda of similar design, vintage and kilometres.

She left B.C. with a clean driving record. The police who investigated the crash declared the other driver at fault. The other driver admitted to driving too fast for road conditions. The insurance companies inspected the vehicles and agreed with the cops’ report.

Yet, in the land of opportunity, free-market competition and no provincial sales tax, my friend paid almost twice as much to insure her new old car as she paid in Victoria last year, when her old car was one year and 15,000 kilometres younger.

Perhaps the difference is the price of owning a car in a province with roads that are icy for six to eight months each year — compared to six to eight hours each year. Perhaps it’s the price of driving in a province teeming with pickup trucks and SUVs often driven at speeds well above the posted limits — compared to hordes of electric and hybrid cars that rarely leave their driveways here.

Perhaps it’s the price of insurance in a province that pays some of the country’s highest wages, driving up other costs — compared to a city where workers accept depressed wages just to stay here and endure Victoria’s high cost of living.

Or perhaps it’s the price of market-driven pricing.

I ran a quick comparison through an online insurance estimator. It informed me I would pay $65 more per year in Alberta than I pay here for comparable insurance.

My friend tells me she can accept the higher insurance, but the hassle she endured grates. When you buy a car in Victoria, if you have existing vehicle insurance, you can get a licence plate and interim insurance on your new car from the dealer. You can drive your vehicle off the lot within an hour or so of paying and signing the papers, and head straight to your insurer’s office.

In Edmonton, my friend faced:

1. Purchasing the car at the lot, then

2. Finding a private registry agent to register ownership and get plates, then

3. Shopping around for insurance, which required many telephone calls because online quotes differed from those provided by a person, then

4. Going in person to an insurance office to buy insurance, then

5. Returning to the dealership, with required documents and plates, to pick up her car and drive away.

In the end, my friend combined numbers 2 to 4 by dealing with Alberta’s automobile association, but at the cost of higher insurance premiums. It still took her most of the day, and required about $100 in cab fare.

A 6.7 per cent rate increase is substantial, and we needn’t be happy about it. But when comparisons with other provinces are trotted out, we need to remember more is going on than the pundits acknowledge when you cross the border and buy insurance.

At least ICBC makes the process easy.