Drivers could face big insurance rate hike in Manitoba

Manitoba Public Insurance wants approval for a rate hike that would add about$40 tothe premium of anaverage passenger vehicle.

MPI has asked the Public Utilities Board to grant an overall 4.3 per cent increase two per centin general rates and another 2.3 per centto cover poor returns on its investment portfolio for the coming year.

That's a hefty jump that doesn't make theConsumers Association of Canada very happy.

"Twoyears ago we had a 3.4 per cent increase. A decade before that we had a 3.7. We haven't had a 4.3, certainly in the last 15-16 years, closer to 20," saidByron Williams, who attended Friday's public hearings into the proposed rate increases as arepresentative of the consumer association's Manitoba branch.

Drivers could face big insurance rate hike in Manitoba

8 years ago

Duration 1:14

Manitoba Public Insurance wants approval for a rate hike that would add about $40 to the premium of an average passenger vehicle.

"Our clients are very upset, to be quite honest. They aren't confident MPI has been doing its best to protect ratepayers."

The vast majority of vehicles on the road,privately owned passenger vehicles, would see a four per cent jump in insurance if the request is approved.

Others could see a bigger leap. For instance, registering a trailer could go up 10.2 per cent and commercial vehicles could see an 8.8 per cent increase.

"On averagethat's about $40per passenger vehicle, [but]there will be 300,000vehicles that will pay more than $50 in terms of rate increases," said Williams."We're here to critically test the MPI case [and]offer alternatives that might better protect consumers.

"They are already facing what looks like two decades worth of hydro rate increases and obviously, salaries aren't rising 4.3 per cent, so we want to be confident that you've got your house in good order."

On Thursday, MPIreported a net loss of $30.9 million for the six months of its fiscal yearending Aug.31. The Crown corporation blames an increase in claims costs for the loss, butWilliams wonders if MPI is managing its investments properly.

"MPI is having challenges adjusting to the new economic times of new lower interest rates, and there's a significant question in terms of whether they are appropriatelyprotecting themselves against those interest rates," he said.

According to a document submitted to the PUB, MPIsays its overall requested rate hike is still below the national annual average premium growth rate of 4.53 per cent.

The PUB is expected tomake a decision by December.

SOURCE: MPI