November 30, 2007

BC’s auto insurance company warns high-risk drivers to “clean up their driving or pay more”

Vancouver, British Columbia – The Insurance Corporation of British Columbia (ICBC) has received approval of a proposal to target high-risk drivers, charging them hundreds or even thousands of dollars more each year.

“High-risk drivers are currently not paying enough, given the risk they pose on the roads,” said Paul Taylor, ICBC president and CEO. “Charging bad drivers more is one way that ICBC is working to keep rates low and stable for safer drivers.”

The new Driver Risk Premium will apply to offenses that occur on or after January 1, 2008. Beginning in January 2009, drivers who have motor vehicle convictions, roadside suspensions, and/or a Criminal Code driving-related conviction will pay the new premium. Bad drivers will have to pay the additional annual premium for up to three years.

ICBC says that high-risk drivers, including those who engage in activities such as excessive speed, drinking and driving, running red lights and other forms of dangerous driving, have a crash rate of more than twice that of other B.C. drivers. The ICBC will send letters to drivers whose past driving experience will result in an additional Driver Risk Premium if the bad habits continue into the future; approximately 120,000 drivers, or about five per cent of the province’s licensed drivers, will be receiving the letters.

The Driver Risk Premium is tied to the driver’s license and will have to be paid, regardless of whether the driver owns or insures a vehicle. It will be paid on top of the yearly cost of auto insurance, with those with Criminal Convictions paying the most, with an annual $905 per year for three years. Drivers with multiple convictions will pay even more.

The new program will also identify and penalize drivers who show a history of high-risk driving habits; for example, a driver who receives three speeding tickets over a three-year period will have to pay an additional $350 per year. The premium will be phased in over three years, so that the annual scan will eventually include three full years of a driving record. The Driver Penalty Point program will be phased out over the same period and replaced with the Driver Risk Premium. The two programs will run parallel during that time, and drivers with penalty points will pay the higher of the two premiums.

“The Driver Risk Premium targets those drivers who are most likely to get into crashes which have a direct impact on claims costs,” Taylor said. “The new premium holds drivers more accountable for their actions on our roads and the revenue generated will be used to offset premiums for good drivers.”

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