Insurance response: Competition always helps consumer’s wallet
To the editor:
Re: Place More Attention On The Cause Of Insurance Rate Hikes, Paul Hergott column July 21 Capital News.
I read your paper’s recent editorial (Our View: Is It Time To End ICBC’s monopoly? July 14) and Paul Hergott’s response with interest. As someone who works in the insurance industry, I’d like to provide another perspective.
Mr. Hergott is right to believe that competition drives auto insurance prices downward. Anyone who has switched phone companies or cable providers knows that competition puts consumers in the driver’s seat.
But I disagree with his claim that drivers haven’t benefited from competition in optional insurance. On the contrary, optional insurance rates have dropped over the last few years (a fact that ICBC itself has acknowledged). The reason? In this market, ICBC must compete with private insurers for business.
Consider that if policyholders are unhappy with their optional insurance provider, they can shop around and take their business elsewhere. That’s a significant benefit that drivers forced to do business with ICBC just don’t have.
The disadvantages of a government-run auto insurance monopoly that restricts choice, product innovation and service are crystal clear to drivers in B.C.
Saskatchewan and Manitoba,