Thursday November 20, 2014

Government approves SGI hikes


The provincial government has approved a 3.4 per cent overall increase to Saskatchewan Government Insurance’s (SGI) Saskatchewan Auto Fund vehicle rates, along with rate rebalancing, and a one per cent increase to the capital amount on all rates. The new rates will take effect Aug. 31, 2014.

“Saskatchewan’s auto insurance rates will continue to be among the lowest in Canada,” Minister responsible for SGI Don McMorris said. “Rate rebalancing is necessary to ensure fairness. 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.”

The 2014 rate program will bring 95 per cent of vehicles to within five per cent of the rate required for their vehicle group to break even. Including motorcycles in the rebalancing will see their claims shortfall drop to $5.6 million, compared to $7.2 million if there were no changes to current motorcycle premiums.

The end result is a net increase of 4.4 per cent to basic auto insurance premiums; however, this is not applied across the board. Due to rate rebalancing, customers will see increases or decreases based on the actual cost of claims for their vehicle type, resulting in:

•82 per cent of Saskatchewan vehicle owners receiving a rate increase, with an average annual increase of $44;

•17 per cent of vehicle owners receiving a rate decrease, with an average annual decrease of $12; and

•the remaining vehicle owners (about 6,000) seeing no change to their rates.

To help reduce rate shock, vehicle groups with annual rates greater than $1,000 will be capped at a maximum increase of 10 per cent, while those with annual rates less than $1,000 will have dollar caps ranging from $17 to $100. The rate cap amounts are based on the SRRP’s recommendation that rate increases be capped at two-thirds of the level originally proposed by SGI.

For vehicle owners receiving rate decreases, SGI will apply the decrease immediately on August 31, 2014. Vehicle owners who have already insured their vehicles past Aug. 31 will automatically receive a refund for amounts in excess of five dollars for the difference between their old rate and their new rate to the end of their policy term.



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