Executive Summary
- Government automobile insurance companies in Manitoba, Saskatchewan, and British Columbia have used data to produce insurance premium comparisons which exaggerate estimates of insurance costs in private-sector provinces.
- The claim that the cost of auto insurance is lower in provinces where government requires it to be purchased from a government provider is not accurate in the case of Manitoba and British Columbia. In the case of Saskatchewan, the average premium is lower than private-sector provinces.
- Average premium comparisons mask a number of reasons why prices differ.
- Claim costs vary greatly by province. Such costs (which include payouts) affect the cost of insurance. With insurance, consumers do indeed get what they pay for.
- Some private-sector provinces have less expensive average insurance prices than other provinces where government is the main insurer.
- Insurance policies must reflect risk in order to send signals to drivers about their potentially dangerous behaviour and the relative risk of their age and gender cohort.
- Governments should end taxes that apply only to insurance products.
- Consumers should be offered a choice between no-fault or tort insurance.
- Full competition should be allowed in provinces where it does not now exist. There is no price or product advantage to monopoly-provided insurance.
- Consumers in search of a fair system of comprehensive auto insurance should demand hat it be competitive, that it reward good drivers and penalize poor ones and that they receive adequate comparative information from agents.
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