Vancouver, BC - BC's Auto Insurance System Provides Competitively Priced, Universally Available Coverage for Consumers: On the Basis of Rates There is No Case for Change

Study Conclusion 1: There is no strong case for open competition

"There is no case for change to British Columbia's auto insurance system on the basis of rates charged to consumers" according to Bruce Cran, President of the Consumers' Association of Canada British Columbia (CACBC). The Association has completed a survey comparing 2001 auto insurance rates charged to a broad cross section of 30 drivers and vehicle types in Vancouver, Calgary, Toronto, Winnipeg and Regina.

In supporting the current mix of public and private insurance, Bruce Cran cautions consumers that full open competition won't automatically lead to lower rates. Mr. Cran said "If open competition means huge savings for consumers then rates for the majority of typical drivers like those in the survey would be dramatically lower in Alberta and Ontario. This is simply not the case either with our 2001 survey or our 1999 results."

Mr. Cran said that "The conclusion of the CACBC study of 30 different driver and vehicle profiles is that Vancouver rates are competitive with other large cities and that rates for good drivers without crashes are equally competitive."

Study Conclusion 2: Open competition will result in dramatic rate increases for families and individuals

The study concludes that auto insurance rates for tens of thousands of BC consumers would likely increase dramatically in a fully open market to similar levels paid in Toronto where there are only private companies. Mr. Cran said that "With over one million BC families, many will have drivers under 25 who drive the family car and this means a significant increase in the rates these people will pay according to the data in our survey."

More dramatic increases would face the over 400,000 BC youth aged 16 to 24 year who personally insure a vehicle. Mr. Cran said "Drivers under 25- even those with perfect driving records- pay more in Calgary and Toronto than older drivers with an at-fault accident." The study found that rates charged to seniors are lower in Vancouver than the median rates in Toronto. In BC seniors have a 25% discount on vehicles rated for pleasure use only.

Study Conclusion 3: Open competition will result in discriminatory rating practices

Mr. Cran notes that "The rating systems used by the private insurance companies in provinces like Alberta and Ontario include a broader range of social rating factors, including age and gender. These rating factors have not been used by ICBC since the Social Credit government of Premier Bill Bennett introduced the 1979 legislation to ensure non-discriminatory, universally accessible insurance." Mr. Cran points out that "Although this legislation was never proclaimed, ICBC has not used age and gender as a base, because of government direction and this could end immediately if an open competitive market is allowed." Private insurers have already stated they would include social rating factors like age and gender if they sell compulsory insurance in BC.

The Consumers' Association believes the fairest system is the one in BC that judges a person on the basis of their driving record and not on age and gender and other social rating factors. Mr. Cran said "The CACBC fully supports the current system of earning discounts for safe driving and penalties for at-fault crashes."

Study Conclusion 4: A $1 billion optional market is already open to full competition

BC consumers enjoy the best of both worlds in that more than half the estimated $2 billion annual auto insurance premiums paid by consumers in BC are optional coverages provided by ICBC and private insurers. In the report the CACBC strongly supports the stability and universal access that exists with the public delivery of mandatory basic insurance. The CACBC endorses enhanced competition in the optional market as this competition would continue to have a positive impact on keeping automobile insurance costs down for all consumers.

Rate Survey in Vancouver, Calgary, Toronto, Regina and Winnipeg

The survey of 2001 rates is an expansion of the CACBC's 1999 rate comparison. In Calgary and Toronto where there are many insurance companies, the CACBC obtained quotes from CompuQuote, the industry's independent rate quotation service. The report includes the lowest and highest rates quoted for each driver and vehicle profile and bases its findings on the median rate charged. A summary of the key findings of the report can be found on the following page. A full copy of the report can be viewed on our website at www.cacbc.com.

CONTACT:
Bruce Cran
President, Consumers' Association of Canada (British Columbia)
Phone: 604-880-4287
Summary of the Key Findings of the CACBC
2001 Rate Comparison Report

1. Vancouver's Rates are Competitive With Other Large Cities.
2. Under Open Competition Discriminatory Rating Practices Will Result in "Rate Shock" For Families With Young Drivers. "Tens of thousands of BC families with claims free young drivers would experience dramatic and significant rate increases under open competition, with rates increasing up to 100% or more.
3. Young BC Drivers With Perfect Driving Records Will Experience Significant Rate Increases Under Open Competition. "British Columbia's current public auto insurance system uses the fairest method for determining auto insurance rates - a person's driving record.
4. Gender Discrimination Results in Younger Male Drivers Paying Much Higher Rates In Toronto Than Vancouver. "Under an open competition insurance model, rates by all insurers would be set on the basis of age, gender, marital status, or home ownership - a dramatic shift for BC consumers.
5. Age Discrimination in Calgary and Toronto Results in Youth With Perfect Driving Records Paying More Than Older Drivers With an At-Fault Crash.
6. Rates For BC's Good Drivers Are Competitive. "Rates for BC's good drivers are generally less than rates in Toronto, with some rates being substantially less.
7. Rates are Higher in Toronto Than in Vancouver.
8. Rates for Most Claims-Free Drivers are Slightly Lower in Calgary Than in Vancouver.
9. Rates Are Higher in Calgary Than in Winnipeg.
   • "Rates in Calgary are much higher than in its comparable prairie city - Winnipeg.
10. Median Rates for Seniors are Lower in Vancouver Than in Toronto
    • "In BC, seniors receive a 25% discount on pleasure rated vehicles.

Overall Finding:

BC's auto insurance system provides competitively priced, universally available coverage for consumers