Government approves SGI rate program

The Saskatchewan government has given the green light to a 3.4% overall increase to Saskatchewan Auto Fund vehicle rates, along with rate rebalancing, and a 1% hike to the capital amount on all rates, effective Aug. 1.

The 2014 rate program will bring 95% of vehicles to within 5% of the rate required for their vehicle group to break even, notes a statement issued Thursday by Saskatchewan Government Insurance (SGI). By including motorcycles in the rebalancing, their claims shortfall will drop to $5.6 million compared to $7.2 million had there been no changes to current premiums, SGI reports.

“Rate rebalancing is necessary to ensure fairness,” Don McMorris, provincial minister responsible for SGI, says in the statement. “Our government is hopeful that the work done by SGI and the Motorcycle Review Committee, in addition to the current review of automobile injury coverage, will have a positive impact on future insurance rates,” McMorris continues.

SGI reports the effect of the approval is a net increase of 4.4% to basic auto insurance premiums, although this is not applied across the board. Overall, as a result of rate rebalancing, 82% of vehicle owners in the province will receive a rate increase, with an average annual hike of $44; 17% will receive a rate decrease, with an average annual reduction of $12; and the approximately 6,000 remaining vehicle owners will see no change to their rates.

For vehicle owners receiving rate decreases, SGI will apply decreases immediately on Aug. 31 (or automatic refunds for the difference between old and new rates for those who have already insured their vehicles past Aug. 31); for those receiving rate increases, the new rate will apply the next time the owner completes a vehicle transaction on or after Aug. 31 (usually the next time they renew their plate insurance).

SGI notes that to help reduce rate shock, vehicle groups with annual rates greater than $1,000 will be capped at a maximum increase of 10%, while those with annual rates less than $1,000 will have dollar caps ranging from $17 to $100.