Does ICBC Charge Tax On Car Insurance?

If you’re looking to insure your car in the Canadian province of British Columbia, you may be wondering whether ICBC (the Insurance Corporation of British Columbia) charges tax on car insurance. The answer is yes, ICBC does impose taxes on car insurance premiums. The types of taxes and the amount of taxes charged depend on the type of vehicle being insured and the coverage that is being purchased.

ICBC Tax Rates

ICBC taxes can range from as low as 5.7% to as high as 16.7%. The taxes imposed by ICBC depend on the type of vehicle being insured, the type of coverage being purchased, and the amount of coverage being purchased. For example, premiums for passenger vehicles are subject to a 7.7% tax, while premiums for motorcycles and motorhomes are subject to a 12.7% tax. ICBC also taxes collision and comprehensive coverage, with a tax rate of 16.7%.

Who Pays the Tax?

The person who purchases the car insurance policy from ICBC is responsible for paying the taxes. This means that if you are purchasing car insurance from ICBC, you will need to factor in the ICBC taxes when calculating the total cost of your car insurance policy. The taxes will be added to the total premium and must be paid when the policy is purchased.

Tax Exemptions

There are certain types of vehicles, and certain types of coverage, that are exempt from ICBC taxes. For example, premiums for private passenger vehicles that are used for business purposes are exempt from ICBC taxes. In addition, premiums for some types of coverage, such as liability coverage, are exempt from ICBC taxes. It is important to note that the exemptions vary depending on the type of vehicle being insured and the type of coverage being purchased.

How Taxes Are Calculated

ICBC taxes are calculated based on the type of vehicle being insured and the type and amount of coverage being purchased. If you are purchasing car insurance from ICBC, the taxes will be calculated automatically and added to the total premium. It is important to note that the taxes are calculated based on the total premium, so if you purchase additional coverage, the taxes will increase accordingly.

Conclusion

In conclusion, ICBC does impose taxes on car insurance premiums. The types of taxes and the amount of taxes charged depend on the type of vehicle being insured and the coverage that is being purchased. If you are purchasing car insurance from ICBC, it is important to factor in the ICBC taxes when calculating the total cost of your car insurance policy.