Once again, MPI has built up a huge surplus by overcharging for auto insurance.
Manitoba Public Insurance and its practice of “excessive conservatism” in setting rates were skewered Wednesday at an emergency Public Utilities Board hearing over the recent revelation it had an extra $250 million to return to vehicle owners.
I have a modest suggestion for the Minister that does not involve privatizing MPI.
In the interest of aligning MPI rates with its cost structure, could the minister direct to company to remove the mandatory collision damage coverage on vehicle with a value under $10,000?
In concept, collision insurance on vehicles priced under $10,000 could feature a high deductible amount of $2,500, $5,000 or $10,000. Consumers would then have a choice to self-insure, to purchase supplemental coverage from MPI, or to purchase private collision damage coverage like one does with rental cars.
This action would not only save low income consumers money, it would also save MPI money in terms of a reduced volume of claims processing, damage assessments, and repair/write off expenses. It would be a win-win for the government, the company, and the consumer.