SGI eyes 5% rate hike

REGINA – Many Saskatchewan drivers could be paying more to drive their vehicles by the end of August.

SGI submitted a 5.2 per cent rate increase to the Saskatchewan Rate Review panel (SRRP) and the proposal will include the following components:

• A 2.7 per cent revenue increase
• A 3.7 per cent capital amount applied on top of the rate changes to help replenish the Rate Stabilization Reserve (RSR)
• Offset by the 1.23 per cent surcharge put in place last year to replenish the RSR (effective until Aug. 30, 2014)

“The number of claims in the province continues to grow and auto body labour rates are set to increase 10 per cent per year for the next three years,” said Andrew Cartmell, President and CEO of SGI. “The Auto Fund operates on a break-even basis so it is important to ensure an adequate balance in the Rate Stabilization Reserve to cushion against unforeseen circumstances.”

If the rate proposal is approved about 84 per cent of Saskatchewan drivers would see their rates increase (with an average annual increase of $49) and about 16 per cent of drivers would see their rates reduced (with an annual average reduction of $12).

Rates will be rebalanced for all vehicles with the exception of motorcycles. Rate rebalancing will take into account the number of claims and average cost of claims including damage, injury and liability.

Motorcyle rates will not be rebalanced. Instead, all motorcycle will receive a flat 2.7 per cent increase (the average rate for all other vehicles) and the 3.7 per cent capital will be applied on top of that increase.

“We’re confident these initiatives will enhance motorcycle safety once implemented,” said Cartmell. “However, it will take some time for these changes to have an impact on claim costs, so in the interest of fairness to all vehicle owners, the proposed flat 2.7 per cent increase is a responsible approach to take.”

If everything is approved the rate changes will come into effect on August 31^st.