SGI has submitted a proposal to the Saskatchewan Rate Review Panel (SRRP) for a net increase of 5.2 per cent to Saskatchewan Auto Fund vehicle insurance rates. The proposal includes the following components:
A 2.7 per cent revenue increase
A 3.7 per cent capital amount applied on top of the rate changes to help replenish the Rate Stabilization Reserve (RSR)
Offset by the 1.23 per cent surcharge put in place last year to replenish the RSR (effective until Aug. 30, 2014)
"The number of claims in the province continues to grow and auto body labour rates are set to increase 10 per cent per year for the next three years," said Andrew Cartmell, President and CEO of SGI. "The Auto Fund operates on a break-even basis so it is important to ensure an adequate balance in the Rate Stabilization Reserve to cushion against unforeseen circumstances."
If approved, about 84 per cent of vehicles would receive rate increases (with an average annual increase of $49) and about 16 per cent would receive decreases (with an average annual reduction of $12) or have no change to their rates.
Rates would be rebalanced for all vehicles, with the exception of motorcycles. Rate rebalancing takes into account the number of claims and average cost of claims including damage, injury and liability costs, for each class of vehicle. This means each customer's rate change would depend on the type of vehicle they own.
Motorcycle rates would not be rebalanced; instead, all motorcycles would receive a flat 2.7 per cent increase - the average required for all other vehicles - and the 3.7 per cent capital amount would be applied on top of that increase. This approach will bring motorcycle rates closer to covering the cost of motorcycle claims anticipated in the upcoming rating year.
Proposed rates for all vehicles can be found on SGI's website at www.sgi.sk.ca/2014rates. If approved, the rate changes would be effective Aug. 31, 2014.
The full rate proposal will be available on the SRRP's website at www.saskratereview.ca. Comments on the rate proposal can be provided to the SRRP through its website, its Facebook or Twitter account, or by calling toll free 1-877-368-7075 or emailing [email protected].
