PUB sides with MPI’s rainy-day savings strategy, approving third-straight rate hike
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Hey there, time traveller!
This article was published 03/12/2018 (2282 days ago), so information in it may no longer be current.
Manitoba motorists are facing an increase in Autopac premiums for the third consecutive year.
The Public Utilities Board approved a 1.8 per cent overall rate increase for basic motor vehicle insurance Monday, granting almost all of the 2.2 per cent hike sought by Manitoba Public Insurance earlier this year. The increase takes effect March 1.
MPI says the ruling will result in the average passenger vehicle owner paying about $20 more for their insurance next year.
The Crown corporation requested an increase to boost its reserves to absorb any future financial shocks due to unanticipated claims. With the increase, the PUB forecasts that MPI’s reserves could rise to $280 million in 2020 from $211 million in 2018.
Last fiscal year, MPI earned a profit of $91 million.
By the numbers
• Private passenger vehicles — up 1.98%
• Commercial vehicles — up 1.91%
• Public (transit, school buses) — up 0.14%
• Motorcycles — up 2.14%
• Trailers — down 4.86%
• Off-road vehicles — down 20%
• Overall — up 1.8%
Figures reflect average increases or decreases for each classification. Individual rates depend on a host of factors including age and make of vehicles, personal driving records and whether various options are purchased.
Source: Manitoba Public Insurance
While the overall premium rate for basic vehicle insurance is climbing, several other factors, including insurance options, determine the final rate motorists pay.
Owners of private passenger vehicles will see their rates rise an average of 1.98 per cent in March. Motorcycle owners will face an average rate hike of 2.14 per cent and rates for owners of off-road vehicles will tumble 20 per cent.
Lawyer Byron Williams, who represents the Manitoba branch of the Consumers’ Association of Canada, said the PUB made a "philosophical choice" to heed MPI’s desire to boost its reserves, or "capital maintenance provision," as the corporation calls it.
“Our client took a different perspective," Williams said. "Our client’s perspective is that (an increase) closer to zero would have been appropriate given that MPI would still achieve break-even rates."
He said there’s also "little evidence to suggest" that MPI will manage its "excessive reserves prudently.”
Erika Miller, a spokeswoman for CAA Manitoba, did not comment directly on the decision, but noted that individual vehicle owners have significant control over how much they pay in insurance.
"Manitobans should be reassured that not all ratepayers will be impacted by the 1.8 per cent general rate increase," Miller said. "Manitoba Public Insurance’s driver safety rating scale, which is informed by an individual’s driving record and other factors including the make, model and year of an individual’s vehicle, as well as their vehicle’s reason for use and where they’re driving, all play a part in whether one will see a change in one’s premium."
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In its 116-page decision, the PUB supported recent efforts by MPI to rein in staffing and information-technology expenses.
"The board finds that the corporation is continuing to take positive steps towards containing its costs," the board said.
Meanwhile, it gave final approval to a rate structure approved on an interim basis earlier this year for ride-hailing services such as TappCar.
larry.kusch@freepress.mb.ca
Larry Kusch
Legislature reporter
Larry Kusch didn’t know what he wanted to do with his life until he attended a high school newspaper editor’s workshop in Regina in the summer of 1969 and listened to a university student speak glowingly about the journalism program at Carleton University in Ottawa.
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