British Columbia Won't insure Your Dream Car anymore
It's A Move to save money, but all it's doing is making us mad.
Vancouver, British Columbia is one of the world's best cities to live in, IMHO. Part of the reason is because their car scene is one of the best in North America.
Which is why I find the latest move from the Insurance Corporation of British Columbia (ICBC) quite alarming.
Like many provinces in Canada, the ICBC is is a publicly-owned insurance provider, which means that it is funded by the taxpayers of British Columbia. The advantage of having government-owned car insurance is that rates tend to be much cheaper than coverage from private insurance companies. In my home province of Saskatchewan, a similar system is used. As opposed to paying $2-3K Canadian per year, I can insure a Focus RS for around $1300 per year (from SGI estimates). Although you get basic coverage for that price, I like, for the most part, the way that this system operates.
ICBC announced, however, that they intend to cut off insurance to cars valued at more than $150,000 CAD (around $115,000 USD). For a city which has one of the highest concentrations of luxury cars in the world, this is bad news.
"No coverage for you!" - ICBC
Of course, if you own an expensive luxury car, money probably doesn't matter. You can still get private insurance, even if it is more expensive. The ICBC claims it will save them nearly $3 million in insurance payouts, which is a big number for a company that relies on government funding to help operate at the margin.
Despite this, insurance rates are still likely to increase for the average motorist. According to the Vancouver Sun (vancouversun.com/news/local-news/icbc-admits-42-per-cent-in-rate-hikes-possible-for-basic-auto-insurance), it's more than likely that insurance rates will go up by a factor of nearly 1.5.
This bothers me somewhat. Why couldn't ICBC just raise the weighted premiums on their own insurance for cars worth more than $150,000? In addition, since expensive vehicles can depreciate very quickly, wouldn't it make sense for the insurance company to reduce the level of coverage for luxury vehicles? In other words, if you bought a new car for $200,000, why couldn't ICBC just cover. for example, only $125,000.00? That way, they can reduce their payouts, increase premiums, and cause high-risk drivers to elect for private insurance?
What do you think? Let me know in the comments below!