ICBC says it accidentally over- or under-charged nearly 600,000 of its optional auto insurance customers and will issue refunds with interest that could average $162 to those who paid too much.
Most motorists aren’t affected by the glitch, which happened because incorrect descriptions were assigned years ago to some vehicles. The error was uncovered last year with ICBC’s move to a new computer system.
About 1.8 per cent of optional insurance customers paid an average of $21 too much per year as a result and 240,000 drivers are owed cumulative refunds stretching back as far as 2008, according to ICBC.
The public auto insurer is updating vehicle descriptions for past years so it can accurately recalculate historic premiums and repay improper charges for the last six years – as far back as its legacy computer system permits.
Another 350,000 customers paid less than they should have by about $34 per year on average but ICBC won’t bill them retroactively.
Affected drivers are to be notified and refund cheques will go out in July.
ICBC expects to pay out $30 to $36 million in refunds plus interest of $3 million, and refunds will average $137 to $162, depending on the final number of incorrect charges that are revised.
It estimates it lost $71 million in underpayments since 2008.
The faulty vehicle descriptions affect only optional insurance, not basic rates.
ICBC’s board is also appointing an outside auditor to review the error.
The error isn’t expected to recur because ICBC’s modernized system will pull the correct description from the vehicle identification numbers, instead of being entered manually by Autoplan agents.