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ICBC short $130 million 0

By Michael Mui, 24 Hours Vancouver

ICBC wants a 5.2% rate hike. (FILE PHOTO)

ICBC wants a 5.2% rate hike. (FILE PHOTO)

ICBC needs $130 million more from its insurance ratepayers to cover its projected shortfall — the reason behind its latest 5.2% request.

 

According to ICBC’s application filed last week to the B.C. Utilities Commission, ICBC needs its 2014 required premium to bring in $2.63 billion.

But at current rates, the corporation is projecting it would only bring in $2.5 billion.

ICBC earlier said an increase in severity of accidents — especially rear-enders caused by distracted drivers — has increased its costs even as the overall number of collisions is lower.

Additionally, according to the application, the average premium paid by B.C. drivers has been decreasing.

“In particular, the proportion of seniors who have lower premiums on average continues to increase,” ICBC said. “Existing customers are migrating to greater levels of discount on average, and younger drivers who have higher premiums on average are waiting longer to obtain their drivers’ licences.”

Other increased costs include general inflation, salaries and wages, and technology costs.

ICBC also points out that prior to the 2008 recession, there was “a significant trend of expansion to vehicle ownership per B.C. household” — but as a household buys more cars, each vehicle is traditionally used less often “than if a single vehicle was used to meet all their travel needs.”

In other words, more vehicles with insurance packages means more money — less use means proportionately fewer crashes.

This trend has “essentially ceased,” however, and ICBC can no longer rely on that benefit.

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