MPI seeks to increase auto insurance rates by 2.2%

Manitoba driverswill see their auto insurancepremiums rise by an average of $27next year, ifManitoba Public Insurance get its way.

The public insurer made the request Friday in its general rate application to the Public Utilities Board. If approved, it woulddrive up insurance rates by what it calls a "modest"overall 2.2 per cent in 2019/2020. That amounts a $27 increase in premiums for the average passenger vehicle owner

"We fully recognize that our customers expect us to deliver comprehensive auto insurance coverage and service at rates that are affordable, predictable and stable over time. We believe this rate application continues to deliver on that mandate,"saidMPIpresident Ben Graham in a press release.

Individual rates vary based on the type of vehicle, use, rating territory and driving history.

547,166 vehicles (excluding trailers and off-road vehicles) could see a premium increase.

Proposed rates

• Private passenger - 2.4 per cent increase
• Commercial - 2.4 per cent increase
• Public - 0.6 per centincrease
• Motorcycles - 3.1 per centincrease
• Trailers - 4.7 per cent decrease
• Off-road vehicles - 20 per cent decrease
• Overall - 2.2 per centincrease

About 40 per cent of drivers can expect an increase ofless than $50 annually,MPIsays.

Last year,MPIhiked rates by 3.7 per cent.

What drives insurance rates up?

MPIjustifies the insurance rate changes based on the most recentcollision claims and damage reports. The corporation experiences higher physical damage costs tied to newer vehicles and rising collision claims at a rate of five per cent per year,MPIsays, compared to an average of 2 or 3 per cent in previous years.

"Newer vehicles have a wide range of complex materials and driver assist technology features which are costly to repair or replace after a collision," said Graham. "Understandably, newer vehicles of today are more expensive to repair than vehicles a decade ago."

Manitoba's harsh winters and drastic weather affect the financial situation,MPIsays. But reduced weather-related claims coupled with corporate cost containment makes for a modest rate increase.

Hail claims went down to 2,100 in 2017 from 11,000 in 2016 and 13,000 the previous year.

The rundown

MPI also releasedits annual report this week, showingan overall net income of $91.1 million for the past fiscal year, compared to $85.2 million in losses theyear earlier.

Last year, Manitobans submitted an average of 1,203 claims every working day, whichrepresents about $3.1 million in dailyAutopac claims.

Proposed rates will come into effect March 1, 2019. Since renewal rates are staggered,MPIsays some drivers won't pay the increased rates until Feb. 28, 2020.