Rates are on the rise.
SGI has submitted a proposal to the Saskatchewan Rate Review Panel (SRRP) for a net increase of 1.03 per cent to Saskatchewan Auto Fund rates. The proposal includes rebalancing, which would result in rate changes for almost all Saskatchewan vehicles. SGI is also proposing a 1.23 per cent surcharge on rates, which would be applied for three years.
SGI says rebalancing helps to ensure fairness in rating. It takes into account the number of collisions and their severity, including damage, injury and liability costs, for each vehicle make and model, and ensures that each vehicle class is covering its own costs. If approved, about 57 per cent of vehicles would receive rate increases and about 43 per cent would receive decreases or have no change to their rates.
"Again this year, we see increased wages affecting injury claim costs, higher costs for auto parts and declining bond and investment yields, which all contribute to the need for increased revenue," says SGI President and CEO Andrew Cartmell. "The Auto Fund operates on a break-even basis and these changes are required to cover claim costs in the next rating year." Included in SGI's rate proposal is a surcharge on every vehicle to help replenish the Rate Stabilization Reservefile. The proposed surcharge would be applied to the rebalanced rates for each vehicle. The net result of the rate changes, combined with the surcharge, is a 2.27 per cent increase in revenue for SGI.
"We want to remind our customers, that while we are proposing a 2.27 per cent increase in overall revenue, very few, if any, customers will see that exact increase to their own rate," Cartmell adds. "Some will see increases, some will see decreases and some will not change."
Under the proposal, increases to motorcycle rates will not be capped. As a group, motorcycle rates are substantially lower than what is required to cover their claim costs. It is proposed that motorcycle rates be fully corrected to end subsidization of their claim costs by other vehicle owners.
"In Saskatchewan, motorcycles are a recreational vehicle, not a primary vehicle for year-round use, and their injury claim costs are excessive," Cartmell says. "We debated this issue, but in the end we simply felt it wasn't fair for other vehicle owners to continue to pay more than they should in order to subsidize the rates for this vehicle group."
Proposed rates for all vehicles can be found on SGI's website at www.sgi.sk.ca. If approved, the rate changes would be effective Aug. 31, 2013.
The full rate proposal is available on SRRP's website at www.saskratereview.ca. Comments on the rate proposal can be provided to SRRP through its website, or by calling 1-877-368-7075 or emailing [email protected].
