The Difference Between ICBC and Private Insurance

14 October 2016
by SeaFirst Insurance

Everyone who has ever driven a car in the Province of British Columbia is familiar with ICBC. The crown corporation, dating back to 1973, is unavoidable when it comes to operating a motor vehicle in this province, and that’s because auto insurance is mandatory for all BC motorists.

At SeaFirst Insurance we get a lot of questions regarding the stronghold ICBC has on the insurance industry in British Columbia. Many people ask us: are there other options for automotive insurance? These questions are often financially motivated, which we understand—it’s the human condition to want to shop around when it comes to the cost of living, and that involves finding the best insurance rates.

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The quick answer to this common question is that yes, there are private insurance companies that drivers can turn to when it comes to insuring their vehicles in British Columbia. However, the private insurance companies are only available for additional coverage. Your basic auto insurance for cars, trucks, motorcycles, and recreational vehicles (which covers trailers, motorhomes, and ATVs) is only available through ICBC. Let’s take a look at what this means:

Understanding ICBC’s Basic Autoplan Insurance

The mandatory ICBC Basic Autoplan is the minimum amount of insurance a motorist must insure themselves for. It includes five main areas of coverage:

  1. Third-party liability insurance covers both bodily injury and property damage up to $200,000.
  2. Underinsured motorist protection covers your medical bills if the other vehicle involved in the accident had no insurance or didn’t have enough insurance. Up to $1 million per person.
  3. Medical coverage up to $150,000 per person.
  4. Hit-and-run coverage up to $200,000.
  5. Inverse liability coverage: If you’re in an accident where the local laws don't let you make a claim against the at-fault party, you’re covered under the inverse liability coverage (in Canada and the U.S).

Private Auto Insurance Companies

Once you’ve purchased ICBC’s basic auto insurance for your vehicle, you’ll also be asked whether you’d like to purchase additional insurance. If your vehicle is newer, and/or you’re on the road a lot, it’s highly likely that you’ll be springing for these so-called insurance extras. This is because basic auto insurance doesn’t automatically cover your vehicle replacement and repair costs in all instances. You must pay extra for extra special treatment!

For additional auto insurance coverage, such as collision and comprehensive, consumers have the choice of tacking on these services via ICBC, or shopping around via private companies.

There are many benefits of going private, including:

  • Lower premiums and deductibles: Generally speaking, the lower the premium paid, the higher the deductible will be when it comes time to using your insurance. Private insurances gives you more options than ICBC; for example, a $100 deductible for comprehensive coverage.
  • Broader coverage: This can extend to things like built-in sound systems and pet protection (veterinarian bills covered in the event of an accident)
  • 24/7 emergency claims service: If you are considering private insurance, make sure the company you’re looking at offers 24/7 claims service. For peace of mind, investigate what others have experienced in terms of customer service. Was it yay, or nay?
  • Authorized direct repair facilities for convenient claim handling: Just like there are ICBC certified auto body mechanics, there is similar for private insurance providers. Again, this is something to ask an insurance broker.
  • First accident forgiveness: This refers to some private insurance plans having no financial penalty or loss of discount after your first accident in a five or six year period.
  • Free glass repairs: For frequent drivers, free glass repairs is handy because some plans allow for up to three chips per policy term with no deductible.
  • Bundled services/packages: For example, at SeaFirst our Family Autoplus Package includes things like emergency roadside assistance, excess underinsured motorist protection, destination protection, loss of use, family worldwide protection, lock protection, rental vehicle coverage, and travel protection.

benefits of private car insurance bc

Are Private Auto Insurance Providers Better than ICBC?

Whether or not you stick with ICBC for your complete auto insurance coverage, or you opt to go private for add-on services, is a matter of personal preference and what you’re comfortable with. The good news is that through a SeaFirst insurance broker, you can carry out either option via one transaction. We are a one-stop shop! Keep in mind that going private means:

  • More paperwork to file every year (handled by the broker, but you’ll receive reminders in the mail from the third-party in some cases).
  • A second automatic withdrawal from your bank account every month (if not paid for upfront for the year).
  • Having to deal with multiple insurers in the event of making a claim.

Despite these minor differences, when going for private insurance, you can save up to a couple hundred dollars annually for personal use, or in the thousands of dollars if you run a fleet of vehicles.

Ask your family and friends what types of experiences they have had with private insurance companies. There is often a lot of debate surrounding this topic. Since plans can vary significantly, a free chat with a licensed insurance broker can help. Brokers can also shop around for you to get you the best rates possible—no need to compare rates on your own.

Related: Our tips for buying a new vehicle

If you’ve got questions relating to auto insurance and you’re in the Southern Vancouver Island region, come see us at SeaFirst Insurance Brokers. We can help you get the best coverage to suit your automotive insurance needs.

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