The excerpted article was written by Mike Smyth
British Columbians are paying up to 42 per cent more for auto insurance than drivers right next door in Alberta, according to a shocking new report.
The analysis of insurance rates was done by MNP, one of Canada’s largest accounting firms.
The company was hired by the Insurance Bureau of Canada, which plans to release the report publicly on Tuesday. I obtained an advance copy.
The 20-page report says British Columbia and Alberta have similar insurance systems.
Both provinces allow people injured in car crashes to sue for pain and suffering, and both have similar limits on court awards for minor-injury claims, the report found.
The two provinces also have similar mandatory coverage rules and similar pay-out averages for injury claims: $50,658 in B.C. and $46,082 in Alberta.
But there’s one glaring difference: Alberta has private auto insurance and free-market competition, while British Columbia has a government monopoly on basic auto insurance through ICBC.
The two provinces also have very different rates when it comes to auto-insurance premiums, the report says.
“We found that most drivers would be expected to pay higher premiums for similar coverage in B.C. than they would in Alberta,” the report concludes.
“Drivers using their vehicles for daily commuting were estimated to pay up to 42 per cent more in B.C., while drivers using their vehicles for pleasure were estimated to pay between six and 76 per cent more in B.C.”
The study focused on 14 different drivers and compared insurance rates in both provinces, using the same vehicles and coverage in similar population centres.
For example, a 49-year-old business owner in Surrey who drives a 2014 Ford F-150 truck would pay $1,953 with ICBC, compared to $1,380 for the same driver, vehicle and coverage in Calgary, the report found.