B.C. drivers set to save hundreds of dollars on insurance as ICBC applies to drop rates by 15%

British Columbia's public insurance company is applying for a 15 per cent decrease in its basic rates.

Solicitor General Mike Farnworth says if the request is approved by the B.C. Utilities Commission, it will be the largest decrease in 40 years.

The application is part of changes the government announced in February in effort to address the Insurance Corporation of B.C.'s financial troubles. It said then it would reduce insurance premiums for drivers by an average of 20 per cent, or about $400, and introduce a new coverage plan that would go into effect in the spring.

ICBC said in a news release that its new enhanced care coverage plan will see drivers start saving money on base rates in May.

Savings come from legal costs

Farnworth says the new system will save about $1.5 billion in legal costs, which will mean lower rates.

He says many drivers will also receive a one-time refund due to the difference in cost between current insurance rates and those that are set to go into effect.

Nicolas Jimenez, the president and CEO of ICBC, said Monday that the "vast majority'' of B.C. drivers can expect to see significant savings next year. ICBC is confident the utilities commission will agree to the rate reduction, he added.

Shortly after the NDP took office in 2017, Attorney General David Eby described billions in losses at ICBC as a "dumpster fire.'' He said the province's former B.C. Liberal government siphoned off billions in excess capital from the corporation, setting it on the path to insolvency.

Farnworth said the filing to the commission shows ICBC has the financial stability to provide the rate reduction.

"It's about affordability,'' he said. "It's also about ensuring the right balance to ensure that we've put ICBC in a sound financial footing, that it doesn't find itself in a situation again where a government literally plundered, raided, pillaged its reserves over several years."