SGI applies to hike insurance rates 5.2%
Most drivers will pay more this year
Motorcycle changes approved
In addition to announcing proposed rate hikes, SGI said the government has approved a series of changes to motorcycle rules designed to improve safety.
Several of them apply to new riders in the graduated driver licensing program. Those include:
- a ban on half-helmets for new riders.
- a zero blood-alcohol requirement.
- riders must place placards on their bikes to indicate they are new riders.
As well, anyone applying for a motorcycle endorsement must already have a driver's licence (class 5 or higher).
Saskatchewan Government Insurance says it wants to boost auto insurance rates by an average of 5.2 per cent.
The Crown-owned company said Tuesday it has submitted a proposal to the province's Rate Review Panel.
If approved, about 84 per cent of vehicles would see an increase, while the remaining 16 per cent would see a decrease or no change.
Of those who receive increases, the average would work out to about $49 a year.
SGI president Andrew Cartmell said the increases were needed because the number of SGI claims continues to grow, while auto body rates are set to rise 10 per cent a year for the next three years.
If approved, the change would take effect at the end of August.
The company also said it would rebalance rates for all vehicle classes except motorcycles, which will going up at the flat rate of 5.2 per cent. Rebalancing is when rates are raised or lowered to take costs into account.
SGI says motorcycle insurance rates still don't reflect claim costs, but the latest increase will bring rates closer.
The changes apply to drivers covered by the Auto Fund.
This is the fund run by SGI on a break-even basis to pay auto claims by Saskatchewan motorists.
SGI also runs a general insurance business that generates profits.
2 increases and a decrease
Technically, the 5.2 per cent average increase is the result of two increases and one surcharge elimination.
Here's SGI's breakdown:
- 2.7 per cent is being called a "revenue increase."
- 3.7 per cent is a "capital amount" applied on top of the rate change to help replenish the rate stabilization reserve, which is the SGI fund used to smooth out rate increases in extreme years.
- 1.23 per cent is the "surcharge" imposed last year which is now being eliminated.