Rising auto insurance costs could prevent companies from hiring young drivers

Amanda Klassen isn't a bad truck driver, just a new one.

ICBC gives her a 40 per cent discount on her personal car insurance for having a clean driving record. But when her boss, Brad Hoy, decided to make her the principal operator of one of his logging trucks, the insurance quote jumped $8,000. Simply having her as an employee will likely increase the insurance on his entire fleet of five trucks, costing him an additional $20,000 this year.

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It's enough to make someone reconsider hiring a new truck driver, Hoy said from his home in Fort St. James."I'm not that kind of guy, but it makes me wonder if others will avoid hiring young drivers."

Hoy began Sabertooth Transport in 1993 with one truck. With the help of his wife Nadine, he's since expanded to five trucks with five employees, including the 26-year-old Klassen. But as the B.C. forestry industry continues to struggle, there's little chance he'll make up the increased cost of insuring her.

"It takes away a huge chunk of profit, and I see no way around it. The mills aren't going to pay more," he said.

B.C. Liberal MLA Jas Johal said small business owners, particularly trucking firms and delivery services, will feel the pinch this year as they renew their insurance.

"Small business -- people like Brad -- are the backbone of the B.C. economy," Johal said.

But tight profit margins may convince some not to hire young people in an effort to keep their insurance costs from skyrocketing.

Johal said that will directly impact young people, reducing jobs and training opportunities because it costs more to hire them.

The MLA for Richmond-Queensborough wants to see a review of the entire auto insurance system.

"If you have a public insurer, there has to be a benefit," he said. "I'm not advocating for private insurance, but it's clear the social contract has been broken. The system is broken."

The ICBC changes, which began in September, link rates to driver history and are intended to more accurately reflect the actual risk of a crash by driver type. Inexperienced drivers are three-and-a-half times more likely to get into an accident, according to the public insurer.

Under the new system, 75 per cent of the basic insurance premium is still based on the principal driver. Of the other listed drivers, which should include household members and employees, the one with the highest level of risk makes up the remaining 25 per cent.

ICBC lost almost $2.5 billion over the past two years, largely due to rising claims costs and legal fees. One out of every four dollars spent at ICBC goes to legal costs.

In October, the B.C. Supreme Court struck down a key part of the provincial government's auto insurance reforms, ruling that a cap on the number of expert reports allowed in auto insurance lawsuits was unconstitutional.

A $5,500 cap on pain and suffering claims for minor injuries is also being challenged in court.

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