Skip to content

ICBC refunds for overpayment

A lot of cars in B.C. defy description. Difficulties in distinguishing between vehicles like the Honda Accord LX and the EX - which is the difference between a sedan and a coupe - cost IC BC $38 million this summer.
icbc
The ICBC office in Lower Lonsdale.

A lot of cars in B.C. defy description.

Difficulties in distinguishing between vehicles like the Honda Accord LX and the EX - which is the difference between a sedan and a coupe - cost IC BC $38 million this summer.

The province's insurance provider is getting set to send out 309,000 cheques and a few apologies to customers who have been overpaying due to incorrect vehicle descriptions.

Refunds range from $1 to $350, with an average of $113, not including interest.

Another 132,000 customers will get letters informing them they have been underpaying but will not be asked to pay money back to IC BC.

For 30 years, IC BC has used a manual process to register vehicle description, according to media advisor Adam Grossman. "When that system was first put in place it was a very effective system but over the years it's become, like many of our systems, outdated," he said.

A decade ago there might have been only two trim levels on any given model; now there are as many as 15 levels, according to Grossman. "For the broker, it's become increasingly complicated to select the correct vehicle make and model."

Many cars were wrongly classified, causing some customers to pay more for optional insurance.

The refunds follow two independent reviews examining 24 million insurance transactions over the last six years. To stop the problem from recurring, ICBC plans to start using a system that will identify a car's make, model and trim level based on the manufacturer's vehicle identification number. "The potential for error is taken out of the transaction," Grossman said.

IC BC made room for the refunds in their 2013 budget, according to Grossman. "There won't be any impact on insurance rates for customers," he said, explaining that insurance premiums are primarily driven by claims costs. "It's only the optional side of our business, so only customers' optional rates are affected," he said.