Topic: ICBC vs Private Insurance: Second/Young/New Driver

[Trainman]

So with our son now on the BC graduated license program, and having his L (learners), we had to change our coverage on the Forester and RAV.

For me and the Forester, I am 100% ICBC, insured for business use; renewal date is in February.  My extra cost when I added our son in June was $100; so will be about $150 per year.

My wife has a much sadder tale to tell.  She only uses ICBC for the mandatory coverage and uses private insurance for the optional, with an expiry date of March.  Her cost to add our son, if she had kept with the private insurance, would have been $36 to ICBC and $425 to the private.  Now on ICBC fully, her annual coast is just slightly higher than mine (newer vehicle and different coverages making it a bit hard to compare), but still significantly lower than if she had kept the split as she was not much lower than mine to start.  Interesting to see that ICBC does not see young drivers as having the same level of risk as private insurance.  And unlike the private, ICBC did not ask for any details of the secondary driver; private wanted it all right to the DL.

However once our son is on his own, my wife will revert to private as she has been pretty happy with it.

[johngenx]

In Alberta, adding a 16yr old new driver to an existing policy is thousands for most people.  The best I can find is $1800/yr additional.

[Great_Big_Abyss]

I keep trying to explain this to a particular wingnut we have in our office who is dissatisfied with MPI.  When our (currently) 13 YO becomes old enough to drive, it will cost me $0 a month extra than what I pay now in order to let him drive our vehicle.

If I was in Ontario, it would be thousands more.  Honestly, private insurance systems are so whacked. 

[mmret]

...$0 increase is pretty whack too though. I mean really, no additional risk for a teen driver? That's not fair, that's subsidized.

[tpl]

...$0 increase is pretty whack too though. I mean really, no additional risk for a teen driver? That's not fair, that's subsidized.

From the viewpoint of underwriters/actuaries/statisticians yes it is.    From a politicians point of view all it is saying is that one is innocent until proven guilty.  I would argue that is how a province run insurance system should work.

[Great_Big_Abyss]

...$0 increase is pretty whack too though. I mean really, no additional risk for a teen driver? That's not fair, that's subsidized.

The entire premise of insurance is subsidization.  I don't understand your issue with this.  If everyone paid their fair share, people who never got into accidents would pay nothing, and people who totaled their vehicles would pay the entire costs.  YOU are currently either BEING subsidized, or subsidizing somebody else.

[Great_Big_Abyss]

...$0 increase is pretty whack too though. I mean really, no additional risk for a teen driver? That's not fair, that's subsidized.

From the viewpoint of underwriters/actuaries/statisticians yes it is.    From a politicians point of view all it is saying is that one is innocent until proven guilty.  I would argue that is how a province run insurance system should work.

 I agree with this.

A teen driver is not necessarily a bad driver.  With MPI's system, the more accidents, speeding tickets you have, the higher your insurance rates when you own your own vehicle.  BUT, not only do we pay penalties on insurance, but also on our license surcharge.

Here, briefly, is how the MPI system works.  Insurance on the vehicle is held by the owner of the vehicle.  The insurance rates are based on that person's driving record.  Everybody pays a base insurance rate, determined by the value of your vehicle, area you live/work in (Winnipeg has higher rates), full-time or pleasure, etc.  If you're a new driver, you pay the base rate.  If you're a bad driver, you still pay the base rate.  If you're a good driver, you get varying discounts on your insurance, up to (I believe) 30%.  The longer you go without a ticket or an at-fault accident, the higher your discount.

The vehicle's insurance rate is based on the owner's record.  ANYONE can drive that vehicle, even a bad driver, and the insurance rate of the vehicle will never change.

The KEY here, is that you also pay a yearly fee for your driver's license.  IF you're a good driver with no infractions or at-fault accidents that year, your base license charge will be $50.  If, however, you're a BAD driver, with multiple tickets and a few at-fault accidents (even minor ones), your license surcharge will rise quickly, often surpassing $1000/year.

So, as an example.  I can be a good driver, and the insurance on my vehicle will cost me $1200/year.  My license will cost me an additional $50/year.  If I have a son who is a good driver, and driving my car, my insurance rate doesn't change, and his license will be $50/year.  Now, If I have a son who is a bad driver, my insurance rate still will not change.  However, if he wants to keep driving, he will have to pay his extra license surcharge which will start to count in the hundreds if not tens of hundreds of dollars.

The system we have does not penalize new drivers for being new drivers.  It gives them the benefit of the doubt, and if they prove to be bad drivers, then they pay.  THIS should be how all systems work.

[tpl]

^^^ I rather like that. I wonder how well it would work in Ontario with its much larger population. How many people would end up driving without a licence.

[mmret]

...$0 increase is pretty whack too though. I mean really, no additional risk for a teen driver? That's not fair, that's subsidized.

The entire premise of insurance is subsidization.  I don't understand your issue with this.  If everyone paid their fair share, people who never got into accidents would pay nothing, and people who totaled their vehicles would pay the entire costs.  YOU are currently either BEING subsidized, or subsidizing somebody else.

The premise of insurance is NOT subsidization, it is risk sharing.

You're confusing expectation with realization. They are different things. This is clear.

I'm not saying that teen drivers should necessarily pay the full expected cost of insuring their driving, but their expected cost is sure as hell a lot higher than zero.

[dkaz]

I like ICBC's base rate system. Get a growing discount for every year you drive with no at-fault accidents, get a surcharge if you get into an accident.



I'm surprised you don't lose the 10 year driver experience discount, the clause that doesn't allow anyone with less than ten years driver experience to drive the car unless it was a medical emergency.

If the son was listed as the primary driver of the vehicle, I think the insurance rate would go up substantially. But I think they run some calculations. Wife is majority driver so her CRS Levels has I dunno 60% weight. Father and son drive car 20% each of the time so their CRS is weighted accordingly. So parents each have a 15, so 15*.6+15*.2+0*.2 = 12. CRS Level 12 and 15 both have a 43% discount for basic insurance. I believe 15 is a percent or two higher for optional insurance than 12.

But I believe optional insurance gets maxed out at 15, so if both parents are 20 or more, that could explain why there is no increase in insurance costs although there really should've been an increase associated with removing the 10 year clause.

[Trainman]

I like ICBC's base rate system. Get a growing discount for every year you drive with no at-fault accidents, get a surcharge if you get into an accident.

....

I'm surprised you don't lose the 10 year driver experience discount, the clause that doesn't allow anyone with less than ten years driver experience to drive the car unless it was a medical emergency.

... with removing the 10 year clause.

I will check and see if I still have my 10 year discount.

[Fobroader]

My parents where paying about ~$1200 in the mid 90s for me......that ridiculously low.

[johngenx]

The cost, for pleasure only driving, would have been under $200.

Wow.  We in private insurance lands can only dream of that.  We're looking at $1800/yr.  And that's amazing to us, as it was $6000+ not long ago until the gov't stepped in.

[pi314]

The cost, for pleasure only driving, would have been under $200.

Wow.  We in private insurance lands can only dream of that.  We're looking at $1800/yr.  And that's amazing to us, as it was $6000+ not long ago until the gov't stepped in.

In NB it's not that bad... I was an additional 600$ a year or something (3 drivers, one car at the time)... And then when there was me as primary driver on a car at 21 ( not that long ago!), and my brother 18, the premium was 1083 on a new car with comprehensive coverage... Mind you it was bundled with my mom's rondo but still