Manitoba Public Insurance today filed its Basic Autopac rate application for the 2007/08 insurance year with the Public Utilities Board (PUB) for approval.

• The rates take effect March 1, 2007 but because of staggered renewals, some Manitobans will not start paying these rates until February 29, 2008.
• The PUB will rule on the proposed rates after public hearings in October 2006.

Today’s rate application proposes a 2.6 per cent reduction in overall premium revenue for 2007/08.

• This is the eighth year in nine that Manitoba Public Insurance has held the line on or decreased the average premium paid by Manitobans for auto insurance.

If the new rates are approved, 644,050 vehicle owners will see their premiums decrease or stay the same in 2007.

• Overall, 75 per cent of Manitobans will pay less.
  • Premiums will reduce by more than $40 for 21 per cent of vehicle owners.
  • Premiums will reduce by more than $30 for 31 per cent of vehicle owners.
  • 40 per cent of all vehicle owners will have insurance premiums reduced by more than $20.
• Premiums will remain unchanged for nearly 6 per cent of vehicle owners (53,439 vehicles).

• Premiums will increase for about 19 per cent of vehicle owners (166,597 vehicles). For about 68 per cent or 148,463 of these vehicle owners, the increase will be less than $20.

As always, the rate individuals pay for insurance is determined by their driving records, the kind of vehicle (make, model and year) they drive, what the vehicle is used for and where they live.

• In any given year, an individual rate may increase, decrease or remain the same based on the actual claims experience associated with these rating factors.

Attached charts show the effect of the new rates on all Manitoba vehicles, on one vehicle across the five territories, and on four vehicles across the five territories.

Family passenger vehicles

The average rate for a private passenger vehicle will be $830 – $25 less than in 2005/06.

Highlights
2007-08 Motorcycle Rates

• There are 9,476 motorcycles in Manitoba – 265 more than last year

• The average motorcycle premium (excluding mopeds) in 2007/08 will be $1,182

• Driven by higher sport bike premiums, the average premium is expected to increase by 7.3 per cent (excluding mopeds) in 2007/08
  • Sport bikes are expected to increase on average 15.9 per cent
  • Touring bikes will increase on average across Manitoba about 5.2 per cent although the average touring bike rates in Winnipeg and the Thompson area (Territory 3) will actually drop
    • In Winnipeg and Territory 3, touring bikes are actually paying their fair share of claims costs. This means as many bike owners will see premium decreases as receive increases
    • In rural Manitoba, where motorcycle insurance rates cost, on average, about one-third less are about 10 per cent away from paying their share of claims costs 

Mopeds

• Manitoba Public Insurance is recommending a new classification be established for U-drive mopeds in response to a PUB recommendation
  • Scootering Manitoba asserted that rental mopeds were at least partly responsible for the rapidly growing claims expense
• By definition, mopeds are restricted to speeds under 50 kph; otherwise they must be registered as motorcycles (motorscooters).
• The rates between mopeds and motorscooters are significantly different
• The licensing requirements are also different because motorscooter drivers are required to have a motorcycle licence
• The corporation is receiving conflicting information from customers, dealers and manufacturers regarding the top speed of specific vehicles
• It is to the advantage of owners to register a vehicle as a moped when in fact it is a motorscooter
  • This is reflected in the fact that there are 1,438 mopeds in Manitoba and only 71 motorscooters
• Corporation is proposing that rates for mopeds and motorscooters with engine displacement under 100 cc be set at the same level
• This will result in an average 95 per cent increase for mopeds (from an average of $76 to and average of $148)
• This will also result in the average motorscooter rate being decreased by 73 per cent (from an average of $520 to an average of $139)

Sport bikes

• Sport bikes are driving claims costs by causing a disproportionate number of claims.
• Since 2001 (the year MPI started recording body style), sport bikes have accounted for 47 per cent of motorcycle claims despite making up only 16 per cent of the motorcycle fleet.
• The corporation is clarifying what motorcycles fall into the sport bike category
  • The Coalition of Manitoba Motorcycle Groups argued that some bikes identified in the sport bike category were incorrectly classified
  • With the assistance of CMMG, an evaluation was conducted of the styling, model year and horsepower/weight ratio
  • The result was to reclassify 145 motorcycles from sport bike body style to other body styles