A Burnaby councillor is calling on the provincial government to expand the mandate of ICBC to include strata insurance amid a crisis that has seen rates climb as much as 300% in one year.
Sav Dhaliwal made the call recently on Twitter amid news of skyrocketing insurance rates for strata properties. Throughout the region, reports have surfaced of massive year-over-year spikes in insurance rates, and a petition originating in New Westminster is urging action.
New West condo owner Asifa Lalji wrote in her petition that insurance rates for some owners of strata properties are going up by 50 to 300%, while others have been unable to renew their insurance altogether.
Dhaliwal told the NOW he has gotten two calls from people in Burnaby reporting similar issues with their strata insurance in the city.
“There is definitely anxiety,” Dhaliwal said in an interview.
As a result, Dhaliwal said, he expects the city could be seeing spikes in rental rates, as the rising cost of insurance could be passed on to renters.
In a Twitter post, Dhaliwal said it’s time for ICBC to “consider entering into the general insurance business to provide choice to renters and homeowners.”
Dhaliwal said ICBC should not seek to maximize profits – instead, as a public insurer, it should seek to break even, he said – which would allow it to offer lower, more competitive rates.
“The bottom line is, every time your insurance is through a private insurance company, there is a … profit margin,” Dhaliwal said. “If those were taken out of the equation, there should definitely be some savings.”
Dhaliwal said he doesn’t envision expanding ICBC into general insurance as another monopoly, like the corporation holds over auto insurance, but rather as added competition to private insurers.
But since the 2017 election, the BC NDP government has struggled to contain ICBC auto insurance rates after finding the insurer was deep in the red and nearing insolvency. The elected official in charge of ICBC, David Eby, has repeatedly referred to the situation as a “dumpster fire.”
In recent years, right-wing commentators and politicians have called for ICBC to be privatized as a result, suggesting it’s an issue inherent in public insurance. BC Liberal Leader Andrew Wilkinson has called for ending ICBC’s monopoly on auto insurance and potentially releasing it from government ownership.
But Dhaliwal said the crisis currently facing the public insurer isn’t an existential one for a public insurer.
“ICBC’s current dumpster fire and their problems aren’t really a problem of the concept, the principle, of public insurance,” Dhaliwal said, pointing instead to previous governments using ICBC as a “cash cow.”
“That can be managed if the governments have the right intentions, like I believe this government is now trying to do, to make ICBC stand on its own without having to have the rates go up substantially.”
Between 2010 and 2016, the BC Liberal government siphoned $1.2 billion from ICBC profits, to top up other areas of government. The Liberals said in 2016 the developing crisis was not a result of that, but of increasing crashes and rising costs of car repairs.
Dhaliwal added he doesn’t see an expansion of ICBC by the BC NDP being negated by a future BC Liberal government – and he emphasized that he doesn’t see the Liberals privatizing the Crown insurer anytime soon.
“Deep down, they recognize how it benefits the public.”