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December
12, 2002
NOTE: This release has been updated
to show finalized numbers
instead of the estimated numbers
contained in the original.
More
than 390,000 vehicle owners will
pay less for auto insurance next
year after the Public Utilities
Board ordered a one per cent (1%)
reduction in Basic Autopac rates
today.
The
PUB ruling, governing Manitoba Public
Insurance rates for the insurance
year that begins March 1, 2003,
means about 51 per cent of vehicle
owners will pay the same or less
for insurance as the average premium
drops $6 to $581.
It
is the fifth year in a row that
Manitoba Public Insurance has held
the line on universal insurance
rates keeping more than $110 million
in vehicle-owners’ pockets.
As happens every year, individual
premiums will be affected by the
make and model of the vehicle, how
and where it is driven, and the
owner’s driving record.
“Since
1999, Manitoba Public Insurance
has not increased Basic Autopac
rates,” President and Chief
Executive Officer Jack Zacharias
said. “I can’t think
of a single auto insurer in Canada
that can say it has reduced auto
rates three times and provided vehicle
owners with an $81 million dividend.
“Across
Canada, auto insurance rates increased
an average of 15.7 per cent last
year and in Manitoba, we are dropping
rates while offering a superior
product.”
Overall,
390,549 vehicle-owners will pay
less for insurance next year with
most getting a $20 to $80 reduction.
Another
25,761 vehicle-owners will pay the
same rate as they are this year.
Vehicle owners in Winnipeg will
pay almost $3 million less for insurance
next year while those in Southern
Manitoba including Brandon will
pay $2.2 million less. All other
regions will pay slightly more.
In
its June 2002 rate application,
Manitoba Public Insurance had proposed
no change to its premium revenue.
“The reduction in revenue
presents a challenge to Manitoba
Public Insurance,’’
Zacharias said. “We know that
Manitobans value stable auto insurance
rates and we have worked hard to
provide long-term stability.
“Without
a properly financed Rate Stabilization
Reserve, the corporation’s
ability to absorb bad weather or
spikes in claims is hampered and
increases the possibility of rate
increases in the future.”
Among
different classes of vehicles in
2003/2004, the overall amount of
premium paid by family passenger
vehicles will decrease by one per
cent, while trailer and off-road
vehicle owners will see average
reductions of 10.5 and 8.7 per cent,
respectively.
In
its ruling, the PUB also approved:
•
A flat $40 annual discount for vehicle
owners who have an aftermarket anti-theft
device that meets the national standard.
This change, also effective March
1, 2003, will result in most owners
being eligible for a larger discount
than under the current program.
•
Premiums for 94,000 owners of trailers
and off-road vehicles will decrease
to better reflect their claims costs.
The
PUB also adjusted motorcycle rates
to make sport bike owners pay more
than Manitoba Public Insurance had
applied for. In its ruling, the
public regulator approved an overall
rate hike of 15 per cent stating
it agrees with the corporation’s
rate-making methodology but said
given the number of crashes involving
sport bikes it believes they should
pay 10 per cent more than other
motorcycles.
“The
Board expressed the view that the
type of vehicle one drives is a
personal choice, and that common
sense dictates that the risk of
personal injury is dependent on
the size and type of vehicle chosen,’’
the ruling states. “As the
choice is personal, so too must
be the assumption of risk.”
The
rates take effect March 1, 2003
but, because of staggered renewal
dates, some vehicle owners will
not pay the new rates until February
2004. Some 416,240 vehicle owners
(51.3 per cent) will see their premiums
decrease or stay the same. Of the
vehicles that will receive experience-based
increases because of higher claims
costs, most will be less than $50.
The new rates will see:
•
48.2 per cent of premiums will go
down (390,479 vehicles)
(52 per cent of these will decrease
by between $20 and $80)
• 3.2 per cent of premiums
will remain unchanged (25,761 vehicles)
• 48.6 per cent of premiums
will increase (394,713 vehicles)
(83 per cent of these will increase
less than $50)
Reference
charts and graphs can be accessed
at mpi.mb.ca.
Contact:
Ted Wakefield/ Brian Smiley/Twila
Allen
Media Relations
Manitoba Public Insurance
(204) 985-7678/7300 or 1-888-554-9549
(toll-free in Manitoba)
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