THE INSURANCE Corp. of B.C. is awaiting approval of a new rate structure that would mean higher premiums for novice drivers and those with poor records.

Under orders from the province’s NDP government to stem massive losses, the public auto insurer submitted the new scheme to the B.C. Utilities Commission Aug. 15.

The new regimen would set premiums in light of three factors: the driver, the vehicle, and discounts and add-ons. Among the changes: # Discounted premiums for rookie motorists “would be reduced to better reflect the actual risk inexperienced drivers represent;” # Penalties for at-fault crashes are to follow the driver, not the vehicle; # ICBC will chart at-fault crashes over a 10-year ‘scan period’ starting March 1, 2017, and # Good-driving discounts will be calculated on up to 40 years of driving experience, instead of the current limit of nine years.

These measures follow last winter’s government announcement of a $5,500 cap on pain and suffering damages arising from minor injury claims, to take effect April 1, 2019.

ICBC is facing a deficit of $1.3bn for the current fiscal year.

“B.C. drivers would need to pay 30% more for basic insurance by 2019 to cover rising claims costs,” an ICBC spokeswoman told Thompson’s via email.

“This isn’t sustainable.”

The insurer came up with the rate model after receiving feedback from more than 35,000 British Columbians earlier this year.

“The proposed changes also incorporated feedback from a broker task force,” the ICBC official said.

“The objective of the task force was to obtain feedback from brokers on potential rate design changes with a focus on the customer and broker experience.”

Richard McCandless, a former civil servant and a close observer of ICBC, says the rate changes may increase the insurer’s premium income in the short term, but could lead some consumers — especially young drivers — to abandon car ownership, potentially reducing premium revenue in the long run.

(More coverage of the ICBC rate proposal is presented in the Sept. 10 weekly edition of Thompson’s. To subscribe, please choose the ‘Subscribe’ tab on our main page or email mpub@rogers.com for more info).