How Much of an Insurance Rate Cut Are B.C. Drivers Getting in 2021?

The Insurance Corporation of British Columbia (ICBC) is the province’s sole provider of vehicle insurance and its monopolistic nature has earned the government entity no shortage of contempt. You can’t take your business elsewhere – ICBC calls all the shots. And if you don’t like their rates, well you can always ride a bike. 

However, there’s been reason to at least partially smile when it comes time to initiate or renew your ICBC car insurance this year. The insurance corporation recently announced that customers can expect lower rates in 2021, and even COVID-19 rebate cheques! 

Let’s break down why this rate reduction is happening, when it takes effect, who can expect a rebate, and when.

Why is there an ICBC rate reduction?

Without getting too deep into the legal weeds, ICBC moved to a no-fault insurance model that they claim removes hefty legal costs from the insurance system, and thus reduces premiums for customers. ICBC argues that legal fees – due to a litigation-based insurance system – were one of the primary reasons for ballooning insurance rates in our province that have led to the most expensive car insurance in Canada.

When did this happen?

The injury and trial lawyers of BC vehemently disagree with ICBC’s move towards a no-fault insurance system and have rigorously fought the attorney general on the matter. Whatever the case, rates dropped on May 1 2021 under what ICBC calls the Enhanced Care program.

The cost for optional third-party liability coverage was also lowered in February 2021, so the savings had already begun on a smaller scale. However, the big savings began in May with an average $400 reduction on most basic car insurance plans. That equates to about 20% less than last year. 

The average annual premium in B.C. was $1900 in 2020, and it’s now set to be $1500 this year. Rates generally change each year due to various factors like rising claims, but ICBC says it will lock-in this lowered rate until at least 2023.

Check out ICBC’s rate calculator to see what kind of rate reduction you might be eligible for.

You don’t need to do anything to receive this reduced rate, it will be applied automatically once you renew after May 1. Those who renewed prior to May 1 were eligible for a one-time, pro-rated refund for the difference between your current policy and the new, cheaper Enhanced Care rate for whatever remained on your policy beyond May 1.

Enhanced Care rebates are issued in three different ways: 

1. Those who paid for insurance through a payment plan receive the rebate in the form of adjustments to your monthly payments, which will be lower.
2. If you paid via credit card, you get a refunded amount credited back to you. 
3. If your credit card expired or you paid by some other method, you will see a cheque arrive in the mail. If you want the refund sent directly to your bank account, you need to set up direct deposit.

Is the Enhanced Care rebate different from the COVID-19 rebate?

The Enhanced Care rebate is different from the COVID-19 rebate, and the ICBC announced two pandemic-related rebates; one in March and one in July.

March 2021 COVID-19 rebates

The first COVID-19 rebate was for customers who had an active policy between April 2020 and September 2020 – the height of the pandemic lockdowns. 

It’s no surprise that with travel restrictions and work from home policies in effect, there was a significant reduction in crashes due to fewer people on the roads. That meant fewer claims for ICBC to pay. 

This savings was passed on to the customer with rebate cheques sent out in the spring. The average rebate was $190 – approximately 19% of the premium customers paid during that six-month stretch. 

July 2021 COVID-19 rebates

In June, ICBC announced that it will be issuing a second pandemic-related savings rebate averaging $120 per policy in mid-July. Three million drivers will receive the $120 amount – approximately 11% of the premium customers paid during the six-month period.

ICBC says that most drivers with active policies from Oct. 1 2020 to March 31 2021 will be eligible for the rebate. Rebates will come in the form of credit card refunds, cheques, or direct deposit.

Save on your next car purchase

Now that insurance rates are coming down, it could mean more money in your pocket for buying that car you’ve been thinking about. And if you buy your next car online, you can save even more because you can skip the dealership fees altogether. 

Canada Drives has launched 100% online car shopping with its state-of-the-art online showroom filled with hundreds of certified vehicles. Choose your perfect ride today, get it delivered to your doorstep, and take 7 days to test-own your car! If you don’t love it for any reason, we’ll take it back and either refund your money or help you find something that’s a better fit. 

Shop online today!