ICBC to reward good drivers, punish the bad

Details so far sketchy on new carrot-and-stick insurance discount system

Speeders and other ticketed traffic violators may pay more for their auto insurance so drivers with a clean record can get deeper discounts.

That’s part of a major overhaul of ICBC proposed by the public auto insurer that includes the shedding of 350 jobs.

The changes are subject to approval by regulators.

But the biggest move is a shift to a driving record model for calculating premium discounts, instead of relying solely on the at-fault claims history.

Discounts now top out at 43 per cent for drivers with a long claims-free record.

ICBC spokesman Mark Jan Vrem said it should cost less for someone with a clean driving record and no traffic tickets over the previous three years.

Drivers with violation tickets in that period would pay more than they do now, even if they have no claims.

“We think it’s unfair for the good drivers to be subsidizing the rates for the bad drivers,” Jan Vrem said.

But he was unable to show how that would impact various drivers, saying details of the new discount framework are still being worked out.

Nor is it clear whether the new system will replace ICBC’s relatively new Driver Risk Premium (DRP) system that already dings motorists nabbed for drunk driving and excessive speeding.

Introduced in 2009, that system was heralded as a way to make high-risk drivers pay more, even ones who don’t own or insure a vehicle.

It charges motorists an extra $320 per year for three years if caught excessive speeding. And a never-implemented second phase was supposed to charge drivers $350 per year if they rack up three or more lesser traffic tickets.

While the DRP system charges more for risky drivers, Jan Vrem said that money doesn’t yet directly go to reducing good drivers’ premiums.

“They don’t provide the kind of break a good driver should get for their good driving habits,” he said. “We think offering our customers a carrot instead of just a stick is more appropriate.”

Jan Vrem said details of the changes, including revisions to the DRP system, will be filed with the B.C. Utilities Commission this summer.

ICBC expects opponents will try to convince regulators to reject the plan on the basis that speeders shouldn’t be punished if they have no accidents.

Jan Vrem said the corporation will be ready to counter those and other arguments.

If approved, the changes would take effect in 2013 or 2014, he said.

Speeding tickets racked up now would affect insurance discounts then, he said, urging motorists to slow down and drive safely.

The rate changes will be revenue-neutral, he said, and won’t result in any more money going to the provincial government, which takes $145 million a year from ICBC’s reserves.

Billed as a modernization of the corporation, ICBC is promising a more tailored experience for its customers, with more ability to file claims online or by phone.

A document outlining the changes says ICBC must change to succeed in the future, in part because customers don’t trust the corporation and sees it as “distant and bureaucratic.”

The 350 jobs to be reduced in the claims division by the end of 2014 will include 70 management positions and will all be phased in through attrition.

“ICBC has a complex organization structure that has as many as seven layers of management between the CEO and frontline workers,” the document says, and that in future there will be no more than five or six layers of managers and supervisors, depending on the division.

It says there are no immediate plans to outsource more work but there will be some consolidation of office space.

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