IBC, Consumers’ Association at odds over auto insurance rates

The Insurance Bureau of Canada (IBC) and the Consumers’ Association of Canada (CAC) are engaging in a war of words over the cost of auto insurance, following the release of a study by the CAC suggesting rates in Ontario are substantially higher than in provinces where insurance is government-run.
The Consumers’ Association, which advocates public auto insurance, conducted a study of insurance quotes that suggests Ontario drivers pay almost $2,500 for insurance yearly. The study adds that under B.C.’s public insurance system the cost is just over $1,000 per policy per annum.
The IBC says the study methodology is “flawed”, noting that the CAC surveyed only 10 insurers out of the more than 100 that operate in the Ontario market. According to IBC figures, based on all actual policies in effect in Ontario, the cost is $1,027, versus $1,019 in B.C.
Furthermore, Ontario auto claims payouts are nearly three-times that of payouts under the public insurance system in B.C., notes IBC Ontario region vice president Mark Yakabuski. “If public auto insurance was really such a bargain, shouldn’t it be substantially cheaper in B.C., given that claims are a fraction of what the private industry pays here?” He adds that the study fails to take into account coverage levels and other factors such as access to litigation. “Without looking at the claims paid, you’re really talking apples and orangutans.”
The IBC also takes exception with other provincial comparisons, such as CAC’s contention that rates in Alberta are well above $1,500. Based on actual policies, the figure is $943, lower than the cost under B.C.’s public insurer, notes IBC Prairie region vice president Jim Rivait.
IBC Atlantic region vice president, Don Forgeron makes the same case. While the CAC says rates in New Brunswick, Nova Scotia and Newfoundland vary between $1,500 and $2,000 annually, Forgeron says all of the Atlantic provinces have rates lower than B.C.’s. “Maybe the Consumers’ Association can explain why they are advocating a government system that costs more than what we have here, yet delivers only a fraction of the product for consumers?” says Forgeron.
The CAC maintains that its study shows that rates are lowest in B.C., Saskatchewan and Manitoba, where there is public auto insurance. It adds that rates are also low (under $1,000 annually) in Quebec which has a “mixed” system of private and public insurance.
The only insurance group expressing pleasure with the results was Manitoba Public Insurance, who scored the lowest rates on the CAC survey. However, while the CAC puts Manitoba rates at an average $787, the government insurers lists rates on its own sites as between $892 and $1,247 (this includes a 25% discount for good driving) for an average vehicle. The deductible was also higher at $500 for Manitoba policies than the $300 used for private insurance policies in the CAC study.
On the Saskachewan Government Insurance (SGI) web site, its policy comparison system notes that even for a 45-year-old male driver with a clean driving record and the maximum deductible, the rate would be over $1,000. This compares with CAC’s average premium for the province being well under the $1,000 mark.