Saturday, July 27, 2013

Mandatory Auto Insurance to increase by up to 5 per cent

Courtesy of Gazette Grande

As a result of its annual public rate review, the Automobile Insurance Rate Board (AIRB) will permit premium levels for mandatory automobile insurance to increase by up to five per cent, effective November 1. Insurance companies have the option to implement all or part of the five per cent increase over the next three years.

Both the AIRB’s actuary and the insurance industry agreed that a double digit percentage increase was once again warranted, citing a deterioration in third party liability bodily injury claims experience. Frequency of bodily injury claims is not an issue; however, the average cost of claims for 2012 and the estimates for prior years show significant increases.

“We knew that an increase would be necessary, but we wanted to take a more measured approach in order to maintain balance in the system,” said Alfred Savage, AIRB chair. “A five per cent increase, which works out to on average $30 per year, reflects current insurance trends while still keeping premiums at a reasonable level.”

Since 2004, the AIRB has reduced premiums by 13 per cent, and it will be closely monitoring the effects of this year’s increase.

The decision applies only to mandatory coverage, which is required by law and includes third party liability and accident benefits coverage. It does not include optional collision or comprehensive coverage. Those premiums are set by individual insurance companies and monitored by the board.

The Automobile Insurance Rate Board works to maintain an efficient and effective automobile insurance market with rates that are predictable and fair for both motorists and insurance companies. The board is required to review auto insurance rates every year.

For more information, visit the board’s website at or call 780-427-5428 (toll free at 310 0000).

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