Government approves SGI rate rebalancing and increase
Sept. 11, 2009
The provincial government today approved a rate rebalancing that will see vehicle insurance premiums go up by an average of 4.2 per cent effective November 1, 2009. This is the first Saskatchewan Auto Fund rate increase since 2000.
SGI Minister June Draude said that even with the increase, Saskatchewan drivers will continue to have the lowest average personal auto insurance rates in the country.
"Several factors led to SGI requesting a rebalancing and rate increase," Draude said. "For example, the increasing costs of repairing vehicles and income replacement benefits are outpacing investment income and premiums."
The changes break down as follows for Saskatchewan vehicle owners: 553,000 or 55 per cent will see a rate increase of $55 on average annually; 32 per cent (321,000) will have no change to their rates; and 13 per cent (126,000) will decrease by an average of $21 annually.
In April, SGI applied to the Saskatchewan Rate Review Panel (SRRP) for a rate rebalancing and increase. The SRRP reviewed the proposal and then recommended the rate rebalancing and increase to the government.
Rate rebalancing will help to better reflect the actual costs of insurance claims for different vehicle types and classes as well as the collision frequency and severity, damage, injury and liability costs. Currently some vehicle groups, such as motorcycles and commercial trucks pay rates that don't fully reflect claims costs. Increases in the rate groups are being capped to help reduce "rate shock".
For example, there is a maximum increase of 12.5 per cent for light passenger vehicles to a limit of $125. All other vehicle increases would be capped at 10 per cent, with the exception of up to 24 per cent for sport motorcycles and 15 per cent for other motorcycle types; up to 22.5 per cent for light commercial trucks travelling out-of-province; up to 17.5 per cent for taxis in rural areas, and up to 17.5 per cent for "U drive" rental vehicles. SGI will consider rate rebalancing every year as the SRRP recommended.
Other recommendations from the SRRP included reviewing the capital target for SGI's Rate Stabilization Reserve, as well as continuing to examine SGI's operations for efficiencies.
Rates are determined based on the actual risk each vehicle make, model and year represents for being involved in a claim, and actual costs of paying that claim. Rates are available on the Registration and insurance rates page.