Car insurance in this province is provided by a government-run insurance company, Insurance Corporation of British Columbia (ICBC). Since 1973, BC consumers have had very little choice in how and where they buy their car insurance. If they are dissatisfied with the service provided by ICBC or the premiums they are being charged, drivers in BC do not have the same option as do drivers in other provinces – the option to switch insurance companies.
BC consumers do have some of the same choices available to other Canadians when it comes to optional car insurance. Drivers can purchase collision, fire and theft insurance from the private car insurance companies competing for business in BC. These companies are committed to ensuring consumers have the benefit of competition and choice, where government inaction has made it difficult to do so.
A competitive business environment is a powerful incentive for insurers to deliver the best service and to understand and meet consumers’ needs. Auto insurance is no exception to this rule. As consumers’ needs change, private sector insurance companies respond by offering innovative new products and services. Product innovations such as first accident forgiveness, replacement cost coverage, roadside assistance, and payment plans were all adopted in competitive jurisdictions long before they were available in provinces with government-run auto insurance systems.
After the BC government’s 2001 election-campaign commitment to increase competition in auto insurance, a lengthy examination of the role and mandate of ICBC was conducted. The recommendations for insurance reforms that came out of that review fell short of creating a fully competitive market and giving consumers full choice and competition in automobile insurance. Drivers in BC must still buy their mandatory insurance from government-run ICBC.
Private-sector auto insurers continue to work to ensure that consumers in BC have competition and choice in where, how and from whom they buy auto insurance.