By: Luke Jones, Published on June 20, 2017 08:50 AM, Last Update on June 20, 2017 05:54 AM
Manitoba Public Insurance (MPI) confirmed Monday it is requesting a 2.7% overall auto insurance rate increase for the 2018/19 year.
In a release, MPI says it requested the general rate increase application from the Public Utilities Board on Friday. If the Board approves the request, customers operating average passenger vehicles will see their auto insurance premium increase by around $29 per year. MPI points out this is less than $3 per month and is the best possible outcome, but customers are unlikely to be convinced.
“The overall premium revenue requirement for the Basic insurance program in 2018/19 results from an ongoing focus on fiscal prudence and cost containment, which results in a direct financial benefit for Manitoba rate payers,” Dan Guimond, president and chief executive officer of Manitoba Public Insurance said. “Without these efforts, the indicated rate requirement would have been significantly higher at 7.7 per cent.”
Additionally, the CEO of the public insurance understands “our customers expect us to deliver comprehensive auto insurance coverage and service at rates that are predictable, stable and among the lowest in all of Canada. We believe this application continues to deliver on that mandate.”
MPI is also seeking to brings stabilization to the Basic Autopac insurance program. The crown corporation says the program is subject to “significant undercapitalization” and needs a rate stabilization reserve that would be used to absorb revenue changes and uncertainty in financial markets.
“Our goal is to continue working collaboratively with the Public Utilities Board to reach consensus on these important issues, which will ultimately help to ensure the Basic insurance program operates on a self-sustaining basis for the benefit of all Manitobans,” added Guimond.
The proposed rate changes would mean 637,440 vehicles will receive a hike in auto insurance premiums. MPI says 54.2% of these vehicles will increase by less than $50 per year. 35.5% of owners will not be subject to insurance increases, the release notes. If approved, the new rates will bring Manitoba’s average car insurance premium to $1,086.
If brought into action, the new rates will be effective March 1, 2018, but due to staggered renewal dates, some customers won’t pay until Feb. 28, 2019.