ICBC's new rate structure is hitting young drivers hard, while at the same time could be letting some bad drivers off the hook.

The Insurance Corp. of B.C.’s new rate structure is hitting young drivers hard, while at the same time could be letting some bad drivers off the hook.

Damon Langford, a Grade 12 student in Surrey, obtained his N (novice) licence a few months ago, and has been using his grandfather’s car to gain experience on the road.

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Before Sept. 1, when ICBC implemented a new rate structure, the insurance for his grandfather’s car, which listed Langford as a driver, was just over $1,400. Now the same insurance would be $2,950, more than double the previous cost.

If Langford was to become the principal driver for the car — something he was considering because his grandfather may stop driving due to his age — he would be paying premiums of more than $5,900.

Photo by Nikola Bennett / PNG

That’s not something he or many young drivers can afford, said Langford.

“I’d be willing to pay the price — maybe $3,000 is my max — as a principal driver, but I think $5,900 is kind of ridiculous,” he said.

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Langford acknowledges that inexperienced drivers like him are considered high risk, but said the new rates leave teens stuck.

“How can we get experience to be a better driver if insurance rates are so high?”

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ICBC’s move to a driver-based system was meant to reward good drivers while shifting the burden to bad drivers.

Under the new structure, the provincial auto insurer will primarily be looking at a driver’s crash history and years of experience, said ICBC spokeswoman Joanna Linsangan.

“It is important to look at why we’re making these changes — it is focused on increasing fairness,” she said.

“Under our old model, inexperienced drivers paid less than the risk they represented. Their basic insurance premiums were significantly discounted, and therefore subsidized by other drivers.”

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Under the new model, ICBC no longer takes into account a new driver’s history, including discounts gained, under a learner’s permit. It also does not factor in any crashes that occur with an L.

That’s because L drivers are placed under restrictions — including only being able to drive with another adult driver supervising in the passenger seat and a driving ban between midnight and 5 a.m. — that do not provide an accurate measure of risk, Linsangan said.

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But at the same time some young drivers with clean driving records are getting hit, drivers with a history of at-fault crashes before March 2017 and drivers new to B.C. are getting a fresh start under the new regulations.

The new driver-based model is supposed to assess a driver’s 10-year history, but ICBC is only looking back at at-fault crashes where the first payment on the claim occurred on or after March 1, 2017. It’ll then continue to “scan” drivers’ histories back to that date until 2027.

Under the old system, an at-fault claim would stay on a driver’s record for about three years, said ICBC. Under the new system, however, a driver responsible for crashes in late 2016 for example, who might still be paying elevated premiums, would get those claims wiped clean.

ICBC said the March 1, 2017 date was chosen to help transition customers to the new model without unduly impacting drivers.

“We want to minimize impacts to people who may be adversely affected by the new structure,” said Linsangan, explaining a driver who caused a crash eight years ago wouldn’t have known about the repercussions of that crash under the new policy.

ICBC also changed its requirements for out-of-province drivers seeking a new B.C. licence.

Under the old system, new residents were required to provide proof of insurance, including policy number, the term, and details of their history. But starting Sept. 1, ICBC only asks new residents how long they’ve had their licence.

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That means a person new to B.C. with a lengthy crash history would not have their driving history reflected in their premiums.

The old requirements for new residents were “onerous,” especially drivers from certain countries, said ICBC. It was also unfair to drivers who had licences, but did not have their own insurance policy, such as teens who used their parents cars or drivers who used car shares.

“We will only look at their crash history once they start driving in B.C.,” confirmed Linsangan, adding the risk of a new resident driver will be captured in new resident premiums of 15 per cent, 10 per cent, and five per cent respectively over three years.

According to ICBC data from September 1 to 9, 48 per cent of customers who bought basic and optional insurance with ICBC saw an increase in their premiums compared to last year, with an average change of $235. The remaining 52 per cent are paying less, with an average decrease of $285.

That percentage is expected to fluctuate as more people switch to the new model, but ICBC anticipates the overall decrease for full-coverage customers to be at 55 per cent.

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