SGI calling for an increase of 5.2 per cent to vehicle insurance rates

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SGI has submitted a proposal to the Saskatchewan Rate Review Panel (SRRP) for a net increase of 5.2 per cent to Saskatchewan Auto Fund vehicle insurance rates. The proposal includes the following components:

  • A 2.7 per cent revenue increase
  • A 3.7 per cent capital amount applied on top of the rate changes to help replenish the Rate Stabilization Reserve (RSR)
  • Offset by the 1.23 per cent surcharge put in place last year to replenish the RSR (effective until Aug. 30, 2014)

“The number of claims in the province continues to grow and auto body labour rates are set to increase 10 per cent per year for the next three years,” said Andrew Cartmell, President and CEO of SGI. “The Auto Fund operates on a break-even basis so it is important to ensure an adequate balance in the Rate Stabilization Reserve to cushion against unforeseen circumstances.”

If approved, about 84 per cent of vehicles would receive rate increases (with an average annual increase of $49) and about 16 per cent would receive decreases (with an average annual reduction of $12) or have no change to their rates.

Rates would be rebalanced for all vehicles, with the exception of motorcycles. Rate rebalancing takes into account the number of claims and average cost of claims including damage, injury and liability costs, for each class of vehicle. This means each customer’s rate change would depend on the type of vehicle they own.

Motorcycle rates would not be rebalanced; instead, all motorcycles would receive a flat 2.7 per cent increase – the average required for all other vehicles – and the 3.7 per cent capital amount would be applied on top of that increase. This approach will bring motorcycle rates closer to covering the cost of motorcycle claims anticipated in the upcoming rating year.

Additionally, government has approved the proposals in the Motorcycle Review Committee report released last week. Those proposals include increased requirements for acquiring a motorcycle learner’s licence, incentives for new riders to take training, additional mandatory gear for new riders and their passengers, changes to the Safe Driver Recognition (SDR) program and stiffer penalties in SGI’s driver improvement program for all drivers and riders.

“We’re confident these initiatives will enhance motorcycle safety once implemented,” said Cartmell. “However, it will take some time for these changes to have an impact on claim costs, so in the interest of fairness to all vehicle owners, the proposed flat 2.7 per cent increase is a responsible approach to take.”  

Taxis are another group with a large gap between the cost of claims and expenses, and what they pay. To address this, taxis will see an overall average rate increase of  14.5 per cent, plus the 3.7 per cent capital amount. SGI is currently consulting with the taxi industry about insurance rates, the business recognition program, vehicle requirements, claim handling and traffic safety.

Proposed rates for all vehicles can be found on SGI’s website at www.sgi.sk.ca/2014rates. If approved, the rate changes would be effective Aug. 31, 2014.

The full rate proposal will be available on the SRRP’s website at www.saskratereview.ca. Comments on the rate proposal can be provided to the SRRP through its website, its Facebook or Twitter account, or by calling toll free 1-877-368-7075 or emailing feedback@saskratereview.ca

Organizations: SGI, Saskatchewan Rate Review Panel, Saskatchewan Auto Fund Motorcycle Review Committee

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Recent comments

  • Conrad
    February 13, 2014 - 22:02

    Too bad that until now, the rest of us were subsidizing taxi insurance. Apparently a license to print money, with limited taxi licenses and an artificial shortage and according to this article, a 14 percent subsidy by Saskatchewan taxpayers! Maybe if that 14 percent went to public transit, you could actually take a regular bus route. Or Don McMorris wouldn't have had too shut down those southwest STC bus routes! Rather subsidize grandma's visit to town once a year than keep taxi operating costs down. And better for the environment to take the bus to boot!

  • Conrad
    February 13, 2014 - 21:58

    The one thing you have to miss the former NDP government for is affordable utilities. They may have also had phony balanced budgets on the backs of the Crowns, but costs were low. The SaskParty seems to take pride in being able to jack up rates, especially for motor cycle drivers, and to charge what it wants for utilities, using the hundred of millions in annual imaginary dividends to offset Wall's serial Saskatchewan provincial deficits. Guess we all have to pay more for plates to help them continue to pay off that massive nursing raise a few years back?

  • Craig
    February 12, 2014 - 12:44

    Boy between power rates going up, price at the pump going up, SGI going up again for the third year running, water rates going up and city taxes going up and up and up the tax payer can't get any kind of a break in this province. I haven't seen any kind of wage increase in three years and, in fact, I will be seeing a decrease in my wage this year because of a slow down meaning less hours. No one thinks all these, "It's only a few dollars more a month" increases add up, but they do for all but the rich.

  • Craig
    February 12, 2014 - 11:06

    Boy between power rates going up, price at the pump going up, SGI going up again for the third year running, water rates going up and city taxes going up and up and up the tax payer can't get any kind of a break in this province.