Last fall, ICBC made major changes to the way they determine auto insurance premiums, introducing the Driver Factor rating model, to shift accident-responsibility from the vehicle owner to the driver at the time of the crash. The goal of this is to more fairly distribute premiums, with long-time, crash-free drivers paying less than those with a history of causing accidents.
Around the same time, ICBC also introduced a new discount to benefit drivers who are on the road less: the Low-Kilometre discount.
The Basics
- It is a 10% discount on the mandatory coverages, extended Third Party Liability, and Collision premiums. (So, there’s no discount on roadside assistance, New Vehicle Replacement Cost, Comprehensive, or Excess Underinsured Motorist Protection.)
- If you drive under 5,000 km in a year, you qualify!
- Motorcycles and collector/vintage vehicles do not qualify for the discount. These rate classes assume limited kilometres will be driven given the nature of the vehicles, so the discount is already built into the premium.
The Process
- Next time you renew your auto insurance, bring in your vehicle’s odometer reading. (A photo of the odometer taken within the past seven days will work.)
- The discount won’t apply on a renewal until you have two successive odometer readings on file that were taken a year apart.
- The following year, when you renew the car insurance, provide the second odometer reading. If you have driven less than 5,000 kilometers, the discount will be applied.
- Keep providing your odometer reading at the time of renewal proving you drove less than 5,000 km the past year, and you will keep receiving the discount!
Be aware that since the discount is based off annual kilometres driven, odometer readings cannot be provided at any time other than renewal, and the discount is only available on annual policies. If you renew your auto insurance for under 12 months at a time, you are not eligible for the discount.
ICBC is not the only car insurance company offering a discount for low mileage. Many private auto insurers also provide discounts for those who drive less. The prevailing logic is that the less time you spend driving, the less likely you are to be involved in an accident, since most accidents occur when vehicles are in transit.
Note: intentionally misdeclaring an odometer reading in order to obtain a discounted premium could void your insurance policy and leave you with no coverage in the event of a crash. To appropriate a cliché: Honesty is the best policy… and the best thing for your insurance policy.
For a full-overview of their Low Kilometre discount, visit ICBC’s Discounts and Savings page.
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Morgan Thomas, BA (Dtn.)
Team Leader, Personal Insurance Service Associates