I was grief-stricken to learn this week about the misfortune that befell one of my fellow members in the caring and sharing collective that constitutes the government auto insurance program in B.C.
He accidentally drove his 470-horsepower Ferrari F40 into a pole in 2012. Police at the time said there was no damage to the pole and no injuries. For the $600,000-plus car, it was a different story. CTV news coverage at the time showed it got pretty mangled. That’s a shame.
Thankfully, we ICBC clients look out for each other. That’s the nature of the co-op. If one of my brothers or sisters crashes, ICBC takes some of my premium payment and uses it to pay the costs of my unfortunate fellow member. They’d do the same for me.
It’s when further details of the unfortunate mishap emerged in a B.C. Supreme Court judgment this week that my characteristic generosity of spirit started to ebb. It actually started to waver a year or so ago, when ICBC’s financial situation became a subject of political fascination.
To summarize a Byzantine series of arcane developments, the corporation is losing staggering amounts of money, and the business model now looks exactly like part of that Ferrari — wrecked beyond recognition.
There’s a technical term for this in the financial world. It’s called “a dumpster fire,” which is the phrase Attorney General David Eby started using when he walked into the flames.
It turns out the Ferrari case is one of the things that keeps that fire burning.
ICBC says it has paid $789,374.66 toward the cost of repairs. The judge noted the total cost of repairs is anticipated to be in excess of $982,000, but ICBC said Friday the repairs are complete, as far it is concerned.
The plaintiff is arguing ICBC acted in bad faith by delaying the job, objecting to costs, using inferior materials and trying to write it off, rather than repair it. The protracted argument has stretched over three years. At one point, ICBC put $503,028 in a fund to fix the Ferrari, but the two sides couldn’t agree on how to go about it.
The average cost of a car on the road is $15,000. You could buy 33 standard-issue Hondas or the equivalent with the money ICBC initially put up to fix one Ferrari.
The judgment said the Lower Mainland plaintiff is known as a Ferrari collector who makes them available for public display and appreciation. The prolonged absence of the vehicle “is a source of inquisitive inquiry that the plaintiff finds unsettling and embarrassing,” said one of the submissions to court.
The judgment is just an interim ruling, so there are lots more argument and legal expenses to come.
It’s cases such as this one that prompted the B.C. Liberal government in November 2016 to try to tackle the exorbitant cost of fixing luxury cars. It announced: “Government getting out of the business of insuring high-end luxury cars.”
The Liberals ran out of time, and the government changed before the required legislation was passed, so ICBC still insures them. But premiums on luxury cars were increased substantially. At the time, there were an estimated 3,000 cars worth more than $150,000 on the road, and the number was growing.
Then-minister Todd Stone, who was in the middle of another panic about runaway costs and the threat of huge premium hikes, cited a couple of horror stories about expensive repairs to justify bailing out of the luxury-car insurance business. A new fender and a headlight on a Bentley cost us $38,000, for instance.
The NDP government should flee this market as soon as it can. At this rate, ICBC is about two Lamborghini fender-benders away from going bankrupt.
If the NDP can hold ICBC premiums at current levels for my 10-year-old Ford, I’ll only have to pay for 840 years to cover the cost of fixing my fellow client’s Ferrari.
But hey — we’re all in this together. And we’ll be in it for a long time to come.
