Rising insurance premiums are a plump grape in the cornucopia of adult annoyances, but they grow into a ripe apple when forces outside of your control cause them to skyrocket.
Now, imagine that there’s only one insurance provider, and you already pay taxes towards it. That’s the reality in several provinces north of the border, but one jurisdiction just crashed head-on into an unforeseen problem: new money, and the skyrocketing increase in six-figure vehicle ownership that came with it.
To save the owners of Malibus and Journeys from a major jump in premiums caused by ultra-pricey supercar repairs, one Canadian province has taken drastic steps.
As reported by Automotive News Canada, British Columbia will no longer cover vehicles costing $150,000 or more through its public insurance policy. Anyone who’s ever visited Vancouver knows the reason behind the move.
The city has gradually become a haven for the ultra-rich, including a large contingent of wealthy Chinese families (or the sons and daughters thereof). Ferraris and Bentleys ply the streets like pickups in Iowa. Already, the city has applied a new tax to empty houses to stem the flow of foreign capital that has, in part, sent home prices into the upper stratosphere. A standalone garage could set you back seven figures.
Now, the provincial legislature’s focus has turned to insurance. With every vehicle owner contributing to the same pot, the cash needed to repair the bumpers and body panels of high-end vehicles has become too much for low-end owners to bear. Hence the need for changes at the Insurance Corporation of B.C.
“If owners of high-end luxury cars can afford a high-priced car, they certainly can afford to pay higher premiums to cover the real cost for their repairs,” said Todd Stone, B.C.’s Minister of Transportation and Infrastructure.
In a statement, the government tallied up the cost of repairing a 2015 Bentley Flying Spur W12. Assuming a low-speed collision, the price tag attached to the replacement of a fender, grille, headlight and intercooler comes to $38,000. Car owners in B.C. pay about $1,000 per year for basic coverage. According to government figures, the average collision repair bill for a normal car amounts to $2,500. That figure rises to $13,000 for a high-value” vehicle.
So far this year, B.C. has registered 3,000 vehicles costing $150,000 or more. That’s up 30 percent from three years ago. In total, last year’s public payout for ultra-lux vehicle repair was $2.3 million.
Unfortunately, the changes needed to force high-end car buyers to buy private insurance will move at the blistering speed of government, meaning a stop gap solution comes first. With this in mind, the province will immediately double the basic insurance premium for super high-end vehicles.