The party is over for the worst. ICBC is actually denying coverage for some people. I thought that was a gaint BC law in regard to ICBC . Guess not!
ICBC dumping its worst clients
Huge deductibles, denial of optional coverage for 5,000 drivers
ICBC is sending letters to its 5,000 most troublesome customers, refusing to renew comprehensive coverage for about 100 of them and telling the rest their minimum comprehensive deductible is being increased up to eight-fold.
The letters, which are being sent to customers a month before their coverage expires, tell them they are among a group of policy holders who have had an abnormally high number of claims, The Vancouver Sun learned.
While ICBC will still provide basic coverage to all B.C. drivers, it's the first time it has refused to cover optional insurance for a group of high-risk customers.
"They are the 5,000 worst customers in the province. The frequent flyers," said Doug McClelland, spokesman for ICBC.
"Their claims history is so out of line with the rest of their neighbours and the rest of the drivers that it's not fair to spread their costs to everyone."
ICBC is taking steps to move its worst customers "off the books" because the corporation is gradually moving into the competitive marketplace, McClelland said Tuesday.
"We have been pricing ourselves and setting policies that no customer was turned away, even if the risk was too high and we were left holding that book of business while our competitors could turn away anyone."
Under ICBC's mandate, it cannot refuse to sell basic insurance to drivers in B.C. except in extreme circumstances such as insurance fraud or high outstanding unpaid fees.
The letters to the 5,000 customers for comprehensive coverage began going out in January.
The same thing will happen every year, with ICBC sending out similar notices to the 5,000 most frequent claimants for the previous year. Each year, a percentage of the highest repeat claimants will be told they will no longer be covered.
The provincial Liberals changed legislation last year to allow ICBC to compete with private insurers in optional rates. The letters are among several measures the corporation has taken since then to change pricing for its deductibles. It is also studying crash rates to determine which demographic is higher risk.
"These customers are representing too high a risk to insure," McClelland said Tuesday of the 5,000 receiving the letters. "This is a competitive product and they can turn around to someone else and buy it from someone else."
Asked whether it was likely a private insurer would offer comprehensive coverage to a claimant rejected by ICBC, McClelland said ICBC cannot be competitive if it does not dilute into the marketplace the customers who make the highest repeat claims.
"We have an obligation to not be stuck with all the bad business," he said.
ICBC is the sole provider of basic insurance for the 2.71 million drivers in B.C. It also provides 90 per cent of the optional coverage in the province, with 1.62 million customers.
All drivers must have basic insurance, which provides $200,000 coverage and $150,000 medical coverage. Optional insurance, such as collision and comprehensive, is additional coverage that drivers can buy to extend their insurance beyond $200,000.
Comprehensive coverage includes such things as loss or damage due to theft, fire, earthquakes, windshield chips and cracks.
The province's 5,000 most frequent claimants in comprehensive coverage were pulled out of the automated system that sends out notices of renewals.
Instead, ICBC staffers manually figured, based on prior claims, what the new deductible should be for the coming year. Drivers who can prove a change in their circumstances -- such as that they have bought an alarm system or moved from street parking into a secured garage -- may ask for a reduction.
McClelland said another example would be if a driver with a high number of claims from windshield chips moved from the interior of B.C., where there are more gravel roads, to the smoother roads in the city.
Vancouver resident Michael Doucette, one of the 5,000 drivers who is receiving the letter this year, said he's floored to find out his comprehensive deductible is rising from $300 to $2,500.
"I feel like I had a string of bad luck, but I don't consider myself one of the 5,000 worst in the province," Doucette said Tuesday. "What happened to me could happen to anyone."
In the past three years, Doucette, a West End resident, has made three comprehensive claims. Last year, as he was looking out his apartment window, he saw someone break into his 2000 Nissan Pathfinder. By the time police arrived, he had a broken window and damaged door.
The year before that, the back window of his vehicle was smashed in and items were stolen while he was on vacation in San Francisco. That year, Doucette also had to file another claim when thieves took apart his bike rack to try to steal his bike.
On Tuesday, motivated by the huge jump in his deductible, Doucette went to ING and Canadian Direct. Both private insurers said they would provide him with comprehensive coverage; ING would charge a $300 deductible, Canadian Direct, $500.
"I will go to them, but the question is still there about what happens if I get another break-in? After that, will they cut me off too?"
ICBC is wrongly moving away from its original mandate of universality, said Bruce Cran, president of the B.C. Chapter of the Consumers Association of Canada.
"This affects 5,000 customers now and more and more later," he said Tuesday. "This is not what British Columbians want. As consumers we have to fight this."