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Poof Go the Premiums: Manitoba auto insurance rates to drop 8.8 percent

Winnipeg, Manitoba — Manitoba drivers are projected to see auto insurance premiums drop by an average of 8.8 per cent in the coming months. 

In early December 2020, the Public Utilities Board (PUB) approved MPI’s request, which averages out to a savings of more than $100.

Manitoba Public Insurance (MPI), stated that it can deliver savings because the Crown corporation met its capital target — the minimum amount the company should hold in reserve to protect against market volatility. 

The corporation had begun turning over more money to ratepayers last year. MPI has received approval from PUB for a second round of rebates due to the plummeting number of claims during the pandemic. 

The new agreement reached by MPI and the Insurance Brokers Association of Manitoba (IBAM) over the future of online sales, will keep auto insurance sales in the hands of private brokers, even in online transactions.

The decision settles a long-running feud between MPI and IBAM over the future of online sales. MPI had questioned whether brokers should still be involved in every transaction, while IBAM said the role of its members in the insurance process shouldn’t be sidelined. 

The five-year agreement will take effect in April of this year, said MPI expects additional online transactions on or about April 2023. A spokesperson said online renewal will generally be offered to all passengers vehicle owners, except those with a history of defaulting on their payments. 

The provincial government mandated an end to their dispute by bringing on a conciliator. It worked, said Grant Wainikka, the association’s CEO.

“Rewind two years … we were not on friendly terms with MPI, but I think that we were able to see areas of commonality,” Wainikka said. 

What happened is that we were able to build off of those areas of agreement and to come up with something that isn’t perfect for either side — let’s be clear,” he continued.

“But it’s something that both sides can live with, and most importantly, we think, actually will benefit the motoring public of Manitoba.”

It is good for Manitobans to have the convenience of online renewals, and rely on the advice of brokers at the same time, he added. 

Even some renewals and reassessments can be conducted online. An MPI customer could log into their account and be referred to their previous broker. They could also press a button and be handed a choice of four or five brokers geographically close to them. 

The deal also changes the compensation rate for brokers, and they can now receive more for in-person transactions of basic insurance (4.2 per cent) and less if done online (2.3 per cent).

However, the present compensation rate is three per cent, which is roughly two percentage points lower than Saskatchewan jurisdiction, which already has public auto insurance. 

“The majority of consumers, as we’ve confirmed by our own research and through other research, don’t have a very solid understanding of things like insurable value, of things like third-party liability, of things like vehicle classification, of things like personal injury protection plan limits,” Wainikka said.

“These need to be discussed with a professional so that people can understand their own risks and their own liabilities and the coverages that they might require.”

Curtis Wennberg, MPI’s chief operating officer, said customers will appreciate going online to handle more of their insurance needs.

“The fair compensation that has been agreed will differentiate commissions to brokers when customers choose to go online instead of in-person,” he said in an email to CBC.

“That said, customers will be free to choose any method of interaction as they see fit.”

The new agreement will, unfortunately, also have some customers see an increase in their rates.

Drivers insured under the passenger vehicle for hire class will face a 20 per cent increase in their rates for 2021-22 and a subsequent 20 per cent increase for each of the following two years. 

The board ruled that insurance rates for these vehicles are heavily subsidized already, which is a “patent unfairness” to taxi drivers. MPI had originally planned an average rate cut of 10.5 per cent but downgraded their expectations before the PUB hearing.

Photo credits: Jaison Empson/CBC

 

 

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