ICBC driver risk premium announcement is a Halloween nightmare

Happy Halloween, everyone. I’m sure lots of you will be driving to the store to pick up a last minute costume or filling up your trunk with candy. Whatever it is you’re doing, I don’t mean to spoil your fun, but the government just announced a policy will be coming into effect that is certainly more trick than treat. In fact, it’s the stuff of nightmares.
With virtually no warning, ICBC has announced huge increases in driver risk premium and driver penalty point premiums will be implemented tomorrow (November 1). That’s right, tomorrow. The government did announce this back in May but then said nothing about it again until this week. For many drivers this will be the financial equivalent of waking up the morning after Halloween and finding the neighbourhood kids TP’d your house and left a flaming bag of dog shit on your doorstep.

There will be 20 per cent increases to both the Driver Risk Premium and Driver Penalty Point Premium. These are ICBC’s two main programs aimed at targeting so-called high-risk drivers – we’ll get to that later. On top of this, drivers who cannot pay these penalties will be blocked from obtaining a new driver’s licence or purchasing insurance with ICBC. They will also be charged 19.6 per cent in interest if they don’t make a payment after 60 days. 19.6 per cent!

While I let that sink in, let’s look a little deeper at these premiums.

Driver Risk Premium (DRP)

ICBC will be increasing the Driver Risk Premium (DRP), by 20 percent tomorrow and then another 20 percent in November 2019. DRP is a fee added to your auto insurance plan if you have been convicted of certain offences under the Criminal Code or Motor Vehicle Act such as speeding, roadside driving prohibitions and using an electronic device while driving. To qualify for DRP , you must have one or more convictions on your driving record in the last three years.

Starting tomorrow the minimum drivers who qualify for DRP can expect to pay will increase from $320 to $384. Depending on the number and seriousness of the convictions, the maximum fee will jump from $24,000 to $28,800.

Driver Penalty Point (DPP) premium

The Driver Penalty Point (DPP) premium is an another fee that can be added to the amount you pay for insurance and is separate from the DRP program. Some offences may apply to both the DPP and DRP programs, however, they will be billed only once per year under whichever program costs more.

ICBC will look at how many penalty points you have built up over the space of 12 months – the start of the assessment period is different for each driver. If you have four or more points, you will have to pay a DPP premium.

The amount you could pay ranges from $175, for four or more penalty points, to $24,000 for 50 or more penalty points. This will increase by 40 per cent after years to a minimum of $245 and a maximum of $33,600.

Happy Halloween

Having to pay potentially thousands of dollars more in premiums will make insurance unaffordable for many drivers. You might think this is fair enough, if they can’t afford to pay then they can simply surrender their licence and stop driving. Without getting into how impractical that is for many BC residents in remote areas, the government has essentially forced those who can’t afford the new premiums into a catch-22. Charging a 19.6 per cent interest rate if they don’t make a payment after 60 days will push people into a spiral of debt. Who knew being poor was so expensive?

This policy is evil and designed to punish those who can afford it the least.

It’s worth reiterating that ICBC gave just two days’ warning that this policy would be coming into effect. Some drivers will be completely oblivious about the higher premiums until long after they have been issued a ticket. The premiums are not included on the ticket so drivers will only be able to tell if they have to pay extra – and how much – until they get around to renewing their insurance. Imagine suddenly being hit with hundreds, if not thousands, of dollars in extra fees long after the period to dispute a ticket has expired.

For those that are aware of the increases, it will only give them added impetus to challenge driving convictions, further clogging up the courts. This is the opposite of what the government has promised to do.

I also take issue with the government’s assertion that this policy is targeted at high-risk drivers. It is estimated that 66,000 drivers pay one of the premium penalties. A single speeding ticket or a couple of using an electronic device while driving tickets do not necessarily mean you pose more of a risk than other drivers. It just means you’re less lucky than those who indulge in the same behaviour, don’t get caught and then vote to penalize “bad” drivers in an ICBC fairness survey.

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