Editorial: Find ways to cut insurance rates

If death and taxes are two of the certainties in life, it appears a third must be added. The Insurance Corp. of B.C. wants a rate hike — again. The cost of basic coverage is expected to rise about 4.9 per cent in 2017, on top of a 5.5 per cent lift last year.

Since 2011, rates have grown by more than 30 per cent, and there is no end in sight. ICBC’s own worst-case scenario would see a further increase of 42 per cent by 2020.

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Part of the blame, beyond question, is government greed. The province has siphoned off more than $1 billion from the corporation in recent years to fatten its revenues.

But something else is going on here. Between 1996 and 2013, the number of traffic crashes in our province remained essentially unchanged.

There were 252,000 crashes in 1996, and 260,000 in 2013, a negligible increase. Indeed, considering there are far more cars on the road today than two decades ago, the crash rate per thousand vehicles actually fell.

But then in just two years — 2014 and 2015 — the number of crashes jumped by 40,000. And injury claims rose even faster.

On the face of it, these numbers make no sense. Why should crash rates suddenly surge? And with vehicle safety features continually improving, why are injury claims rising instead of declining?

One possible explanation for the increase in crash rates was the province’s decision in 2014 to raise speed limits on some highways. But other jurisdictions report a similar increase in traffic crashes, and their speed limits haven’t gone up.

A more likely reason is just plain carelessness, caused by drivers who are texting or using their cellphones.

The rise in injury claims is probably due to a combination of factors. Some law firms now aggressively seek out traffic-crash victims — a form of “ambulance chasing” the profession once considered inappropriate.

And four out of five claims involve soft-tissue damage, something that is difficult to disprove. The opportunity for fraud is apparent.

The question is what should be done. ICBC went through a similar period in the 1990s. During that decade, rates soared 150 per cent.

The provincial government put an end to that by identifying the most significant causes — among them drunk driving and speeding — and doubled the relevant fines. Injury claims declined, and the corporation went on to record $4 billion in profits over the following years.

But this points to an underlying vulnerability of ICBC. The corporation does employ sophisticated software to help detect fraudulent claims. However, as the numbers prove, the company by itself does not have enough tools to turn the situation around.

The real power to influence driver behaviour rests with the province, through its authority to raise fine levels, and with law-enforcement agencies, through aggressive policing.

The government began to respond last June, when hefty fines were instituted after it became clear distracted motorists were the cause of many crashes.

A first offence draws a $368 fine plus an additional $175 worth of demerit points. A second offence costs $888, and a third, over $3,000.

Nevertheless, it appears traffic-crash levels are continuing to rise. If higher fines are then needed, so be it. Better the guilty parties pay up than the motoring public at large.

Equally, if our police departments require additional help detecting driver inattention, the required investment of time and resources should be made.

For this problem will get worse before it gets better. New technological tools will continue to distract thoughtless drivers.

And we cannot afford another decade in which vehicle-insurance rates go through the roof.

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