Thursday, September 16

Public vs. private auto insurance

In February, I bought my first car in Ontario — a used 2009 Ford Focus. The dealer took care of the plates, and I took care of insurance.

Since auto insurance is private in Ontario, I searched online for the company that would give me the best price. After a phone call, and a fax that showed I owned the car, the transaction was done and the insurance company sent me proof of insurance papers in the mail.

It was simple. It took very little time. I didn't have to sign anyone or talk with anyone face-to-face.

At the beginning of the summer, I drove my car back to B.C. for a summer job. Thus, I had to get my car insured in B.C., where auto insurance is provided through the public Insurance Corporation of British Columbia. The bureaucracy of the process was stunning.

First, you have to have your vehicle inspected. This is separate from AirCare, which is an inspection program for older cars to ensure they don't pollute excessively. Even if your car is almost new, like my 2009 model, you must have your vehicle inspected. This costs a little over $100 and takes about an hour. Not surprisingly, my vehicle passed with flying colours. Why this test is required for newer vehicles is beyond me.

Next, you have to fill out paperwork (it's called a transfer form) that says you are selling the vehicle to yourself, for a purchase price of $0. I think the purpose of the form is to register your address change, since you put your Ontario address in the seller's information field, and your B.C. address in the buyer's information field. Why a standard change of address form isn't used is beyond me.

When selling the car to yourself, you must also pay the B.C. government PST on the value of the vehicle (not the purchase price of $0), which can amount to hundreds of dollars in tax. This is a ridiculous requirement, since I had already paid PST on the vehicle when I bought it in Ontario (and at 8% instead of 7% too). There is an exemption called "settler's effects" that an insurance broker can grant you if you are "settling" in B.C. permanently from another province. However, the exemption does not apply if you are in B.C. temporarily (such as for a summer job). My insurance broker said I'd have to pay PST to the B.C. government on my car, unless I contacted the government's "consumer taxation branch," asking them to give me a special exemption and rubber stamp (literally) my paperwork. She said they'd have a Victoria office I could go to, handed me a phone number and sent me away.

I called the consumer taxation branch. It turns out they only have an office in Vancouver. They sent me back to my insurance broker and told me I had to fax in my transfer form, along with a piece of paper from my employer that showed I was only working for the summer. Then, within two days, they'd stamp my transfer form and fax it back to my broker. In the only pleasant surprise of the ordeal, it only took them about three-quarters of a day to stamp my paperwork.

Before you can purchase insurance in B.C., an insurance broker must leave their office, go out to their parking lot, and physically look at your vehicle identification number (I guess to ensure you're not lying about it). This seemed strange, because nobody came to look at my car in Ontario. I also discovered the hard way that some offices refuse to have brokers go out to a parking lot to look at a car after 4 p.m. — even if their offices don't close until later into the evening. Granted, perhaps this is a safety issue in the winter. But this is summer, where it is light out until 8 or 9 p.m. Luckily, not all brokerage offices were this foolhardy.

Finally, I was able to buy insurance (but I did need to bring a bajillion papers — my Ontario licence, my Canadian passport, my transfer form, my inspection report and my ownership papers). All in, it took me well over a full day's labour (probably closer to two) to get my car insured in B.C. And I was only there for 3.5 months. The bureaucracy and inefficiency of the process compared to Ontario was mind-boggling. B.C. could definitely benefit from looking to Ontario for ways to take some of the needless hurdles out of their auto insurance system.