From dashcams to slowing down: 5 ideas for fixing ICBC
Experts and advocates are suggesting ways B.C.'s public auto insurer can innovate and scale back spending.
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With ICBC reporting a potential $1.3 billion deficit, experts and advocates across the province are suggesting ways the public car insurance company can innovate and scale back on its spending.
Attorney General David Eby has said he wants to ICBC to recover and become financially sustainable, and indicated that it’s possible British Columbians would see $400 rate hikes. With major reforms to be announced in the coming weeks, Metro has outlined some of the ideas being suggested across the province.
1. Reduce road speeds
Fewer accidents mean ICBC pays out less money in insurance claims. There’s ample evidence that lower speed limits make accidents less likely, and result in safer roads.
The BC Cycling Coalition is calling for changes to driving laws as well as speed limits. President Arno Schortinghuis said he wants to see the speed limit on residential streets lowered from 50 km/h to 30 km/h.
Research cited in a provincial report on reducing vehicle crashes stated that when hit by a car at 30 km/h, pedestrians have a 90 per cent survival rate, but at 50 km/h their survival rate drops to 20 per cent.
2. Give discounts to dashcam users
Evidence from dashcams could help ICBC quickly determine who’s at fault in an accident, and save the company money on legal proceedings and fraudulent claims.
Alex Jang, founder of a local dash cam supply company, said it’s estimated that ICBC pays out up to $600 million in fraudulent insurance claims per year.
By giving 10 – 15 per cent discount to people who install dashcams, ICBC would give customers an incentive to shell out the typical $300+ for one of the small hands-free dashboard cameras. Countries such as Thailand, U.K., and South Korea already offer these discounts.
There’s also some research from South Korea that suggests dashcams encourage safer driving. Accident rates for taxi drivers in South Korea decreased by 18 per cent when they installed dashcams, even when the country’s overall accident rate rose by five per cent.
3. Use telematic devices to encourage safer driving
Telematic devices record a driver’s mileage, driving speed and breaking patterns.
Data collected from these devices has been used to help companies determine individualized car insurance rates for their customers, and they’ve been found to encourage safer driving habits.
UBC professor Chuck Weinberg found that drivers who used telematic devices as part of their insurance plan made fewer “hard breaks,” indicating they were being more careful on the road. Overall, they had fewer accidents than those without the devices.
4. Change laws around recycled car parts
Car repair costs have risen by 30 per cent in the last two years.
If mechanics and auto body shops can charge less on repairs, ICBC would be set to spend less money when paying to fix insured cars.
But the president of the Automotive Retailers Association, Ken McCormack says his industry isn’t overcharging ICBC. The price to fix cars has gone up, he says, because the latest vehicles have more expensive parts.
So how can car shops charge less without hurting their bottom line? McCormack wants ICBC to be prevented from selling its wrecked cars to overseas markets. Instead, he wants these damaged vehicles - which can provide low-cost second-hand parts - to be sold to companies within the province, allowing car shops to charge ICBC less for vehicle repairs.
5. No-fault insurance
Despite its name, no-fault insurance doesn’t mean no one is at fault in an accident. Under our current “tort” system, people who are injured in a car crash can either accept a settlement or sue the driver (and thus ICBC) for compensation.
Under a no-fault system, the injured person cannot sue the driver at fault or ICBC. Instead, they are entitled to pre-determined financial compensation from ICBC, similar to workers’ compensation claims.
Injury lawyers oppose the no-fault system, saying it takes away the rights of an innocent victim to sue for injury. However, it would save ICBC considerable money.