November 22, 2006 by Canadian Underwriter
Three out of four Manitobans will pay less for basic auto insurance coverage next year and everyone who paid for auto insurance in 2005-06 will receive a 10% rebate, Manitoba’s Public Utilities Board [PUB] ruled yesterday.
It will be the eighth year in nine that Manitoba Public Insurance (MPI) has held the line or reduced basic Autopac rates without lowering customer service or reducing coverage, MPI announced today in a press release.
The rebate is the third provided to vehicle owners in the last six years, bringing the total to Cdn$200 million. It will be funded through the corporation’s Rate Stabilization Reserve (RSR), which is designed to cushion Autopac rates from unexpected cost fluctuations.
“Today’s ruling confirms the strength of the public auto insurance system,” said MPI president and CEO Marilyn McLaren. “While insurance rates in other jurisdictions with private auto insurers are on the rise, [MPI] has provided nearly a decade of rate stability and about Cdn$200 million in direct payments to Manitoba vehicle owners in the form of dividend payments.”
PUB’s ruling also means that as of April 2007, all current vehicle owners who paid basic Autopac in 2005-06 will receive a rebate cheque in the mail that averages $100. Then, when most Manitobans renew their insurance throughout the 2007-08 year, 75 per cent of Autopac customers will pay less under the rates approved by the PUB.
The PUB upheld MPI’s application to reduce overall premium revenue by 2.6% with two exceptions:
– it capped motorcycle increases at five per cent and moped rate increases at 25% and
– the average family passenger vehicle premium will be $805 next year, a reduction of $25.
Overall, the ruling means 644,000 vehicle owners will see their premiums decrease or stay the same when the new rates take effect on Mar. 1, 2007. Because of staggered renewal dates, some vehicle owners will not pay the new rates until February 2008.