Just over $1,800 a year.
That’s how much former Telkwa mayor Darcy Repen figures households in Telkwa and surrounding regions of his postal code are overpaying annually for car insurance.
“In every case we’re basically paying double the premium of what an urban driver is,” he said.
“We’re getting severely ripped off.”
Repen based that calculation on data that came from a freedom of information (FOI) request he submitted in January and received last week for V0J 2X0 (Telkwa and area) and a V6A postal code in East Vancouver.
The actual average premiums are not anywhere close to double, but Repen is factoring in the disparity based on claims cost per policies in force. For example, in 2016, the average claims cost per policies-in-force for Lower Mainland drivers was $2,102 compared to $769 for north central motorists.
According to the FOI data, over the last five years, V0J 2X0 residents paid a little over $5.5 million more in total ICBC premiums than they received in total claims.
That works out to an average of a little over $1.1 million a year, or 256 per cent of Telkwa policy holders’ average annual insurance costs, Repen said, noting that with 617 registered addresses in V0J 2X0, each address is paying $1,800 more in premiums than claims annually according to his calculations.
Repen acknowledged that is not a precise measurement of the disparity, as not every house in the postal code has a vehicle insurance policy, and because individual insurance rates vary based on factors such as driving experience and claim history. But Repen believes it gives an idea of the unfairness as a whole between premiums and payouts for the postal code.
“Every single one of those five years we paid more than twice as much what our claims and the other operating costs totaled,” he said.
Repen’s FOI request was part of his campaign to have individual citizens each file a request for data on one rural and one urban postal code. The submissions currently number 11 covering 22 postal codes. By comparing rural and urban numbers, he hopes to prove rural drivers are paying inflated insurance costs to subsidize disproportionate Lower Mainland premiums and put pressure on ICBC to change the way it sets rates.
The data Repen received for the East Vancouver postal code indicated policy holders in that jurisdiction over the last five years paid, on average, 105 per cent more in premiums than claims annually.
Repen figures the disparity may be even greater than the 256 and 105 per cent comparison, however, because 25 per cent of ICBC’s total operating budget goes to administration.
“I would tend to think that based on of the volume of claims that they’re actually incurring more than 25 per cent [in urban areas] and we’re incurring less,” he said.
In a prepared statement for The Interior News, Joanna Linsangan, a spokesperson for the provincial insurer, said ICBC has no plans to revisit the issue.
“Revising insurance rate territories is a complex undertaking that would take at least 18 months and would have to include approval from the B.C. Utilities Commission,” she wrote. “Undertaking such a large project while we are undergoing the biggest reforms in ICBC’s history is not practical at this time.”
Those reforms, based on a recent comprehensive review, do include a break for Telkwa and an increase for at least some urban areas, Linsangan said.
“Starting September of this year, Telkwa residents will see a decrease of 3.5 per cent to their territory factor and the decreases will continue over 10 years, totalling approximately 30 per cent,” the statement reads. “While territory is only one factor that determines a driver’s premium, this change will have an immediate and ongoing favourable impact on Telkwa residents. At the same time, the territory factor in some other jurisdictions – including the Lower Mainland – will be increasing. This is just one of the many changes we feel will make our new rating model work better for British Columbians.”
But Repen isn’t buying it.
“What they’re saying is at the end of the 10 years they’re looking at a 31 per cent total reduction,” he said.
“We’re paying four times as much as what we’re getting in claims, so I’m going, ‘no, you should actually be reducing our territorial rate premiums by 300 per cent’.”
He said a response to eight of the additional FOI requests are due in the first week of May. Once he has more data, Repen wants to pressure ICBC to release similar results for the entire province.
“If they’ve done it for one postal code then one would assume they can do it for all postal codes,” he said. “The pressure should be on.”
The ICBC statement did not address an Interior News request for the provincial insurer to proactively release all the postal code data for the province.
“Regarding the information and data requests, we have received a significant number and will be working through those with the individual requestors in due course,” Linsangan said.