The provincial government announced Tuesday insurance costs for the average B.C. driver will go up by eight percent or about $130 annually.

B.C. Attorney General David Eby called the auto insurance rate increase "significant" but said other coming changes would make the public insurer more sustainable.

Eby said ICBC will go before the B.C. Utilities Commission this year to seek a 6.4 percent increase to basic premiums and increase overall optional insurance rates by 9.6 percent, for a blended average rate increase of eight percent.

"There are deep and profound issues that need to be addressed immediately in order to keep rates affordable for British Columbians over the long term," he said.

On Tuesday, Attorney General David Eby outlined new initiatives he said would put ICBC on better financial footing — along with an insurance rate increase. (CBC)

In addition to the rate increase, Eby said the following changes would be the "first steps" to making the insurer more sustainable:

Red light cameras already at intersections will be active 12 hours a day, then 24 hours a day, up from the current six hours.

Distracted driving pilot technologies will be explored to end cell phone use by high-risk drivers like new drivers and repeat offenders. He said drivers who voluntarily adopt such technology could see reduced rates.

New campaigns and education against distracted driving.

Safety improvements for the most-crash-prone intersections.

An "immediate and comprehensive" business audit of ICBC management.

Eby said pain and suffering payouts for some accident victims with "minor" whiplash injuries could be capped but ICBC would not switch to a no-fault insurance model.

Eby blames Liberals for increase

Eby repeatedly blamed "mismanagement" by the previous Liberal government as the reason for the rate increase.

He said the government had deferred paying out claims which must now be paid and that is the reason for increasing claims costs.

"There was a cavalier and reckless attitude to ICBC's financial stability within the previous government," he said. "We are paying for those short-sighted decisions today."

He says the previous government "deceived" British Columbians about the true degree of losses being suffered at ICBC and criticized them for "raiding" the corporation of $1.2 billion in savings to balance provincial budgets.

While Eby said his government would not take money out of ICBC to balance budgets, he would not commit to introducing a law to prevent the use of ICBC savings in that way.

Reducing distracted driving was a big part of what Eby outlined on Tuesday. (David Horemans/CBC)

Rate increases called for by reports

A July report by Ernst & Young, commissioned by the former Liberal government, warned insurance rates may need to climb 30 percent by 2019, unless major changes are made to the Crown corporation's basic insurance program.

An internal report, released in November, said rates could even climb as high as 42 percent by 2020.

The need for the large increases was blamed on several factors: an increasing number of crashes; previous governments artificially playing with rates and raiding the company's reserve capital and a lack of competition in auto insurance in B.C.

Liberals say NDP offering nothing new

In a statement, Liberal MLA Andrew Wilkinson said the real reason for the financial problems was a surge in claims and said the NDP was offering no solutions beyond those in the Ernst & Young report his government commissioned.

"While the NDP seem intent on laying blame, the previous government took steps to keep increases stable and affordable for families," he said.

"B.C. has the toughest drunk driving laws, increased penalties for distracted driving, has doubled premiums on high-end luxury vehicles, shrunk the ICBC executive team and transferred money from optional insurance to keep the basic insurance costs low."

Green Party Leader Andrew Weaver also released a statement saying the government should cap certain payouts and not take further rate increases off the table.

With files from The Canadian Press and Richard Zussman