After sending a June 26 letter to ICBC expressing concern about the cost of auto insurance for people in the area, Smithers Town Council has received a response.
At their Oct. 22 meeting, one of the correspondence items listed on the agenda was a response from Attorney General David Eby dated Oct. 8, 2019.
The letter began, as responses to The Interior News from ICBC have in the past, by acknowledging a Sept. 1 overhaul of how the Crown corporation sets its insurance premiums for individuals.
“A comprehensive examination of territory rates and boundaries is also a very large undertaking, requiring careful and thoughtful analysis, followed by regulatory approval.
“I can tell you that ICBC is updating rate class and territory factors within the existing boundaries. The revised territory rate, which came into effect on September 1, 2019, means that Smithers residents will see the territory component of their premiums drop by 4.1 per cent in the first year with further reductions expected in the future.”
The letter ended by saying the amount of premiums collected and total of claims paid out by a community are not accurate representations of how insurance premiums are determined.
It did, however, acknowledge territory is a factor in premium rates.
“Current premiums are based on expected claims costs and take into account a number of factors that include, but are not limited to, territory.”
Discussing the letter at the end of the meeting acting mayor Frank Wray said the Town has still not received a response to any of the ministerial meetings they had with ICBC at the 2019 Union of British Columbia Municipalities (UBCM) Annual Convention.
“I think we can still expect a further response,” Wray said.
He also noted a commitment from ICBC from those ministerial talks emerged to send someone to to speak to council regarding the rate premiums.
He said since the initial meetings he has further reviewed the issue.
“Actually since then I’ve had some more thoughts about perhaps why this isn’t fair to rural residents.
“It seems to me they’re happy to fix some things that are wrong very quickly … but they don’t seem to want to fix the urban-rural imbalance, so I think that’s something we’ll be able to question them on when they come.”
The initial letter sent to ICBC and Eby, as well as many of the subjects brought up during the ministerial talks, were the indirect result of a freedom of information (FOI) request by former Telkwa mayor Darcy Repen and subsequent requests from residents for specific rural and urban postal codes.
The raw figures from those requests show that, between 2014-2018, nine rural postal codes analyzed paid just over 2.5 times more in premiums than they received back in claims.
Repen has previously told The Interior News he sees ICBC’s reiteration of their territorial rate changes to Council as an implicit admission that those living in rural areas are paying disproportionately high insurance rates.
He also believes if the Crown corporation does send people up north, they should be ready to answer some tough questions.
“If ICBC is sending people up I hope they send them up with some explanation of why, you know, the V6B postal code in Vancouver is being subsidized by 30 million dollars a year and meanwhile Smithers and Telkwa are paying exponentially more than what we are receiving in claims payouts.
“I think it’s time to get past the well-rehearsed and rehashed ICBC mantra of ‘we’re going through big changes and location isn’t the most important thing’ and for them to sit down and to actually provide an analysis that shows why the data that we provided isn’t reflective of what’s actually going on.”