MANITOBA Public Insurance is putting money back in your pocket. The Crown-owned car insurance company was ordered by the Public Utilities Board Monday to issue a 10-per-cent rebate to all vehicle owners.
It is the third year in a row, and the fourth time since 2001, MPI has had to issue a rebate. The average rebate this time will be approximately $100, 10 per cent of your 2007-08 vehicle insurance premium.
The rebates will cost MPI $63 million, plus up to $500,000 in administration fees to cover issuing and mailing out the cheques.
"It's about what we expected," said MPI vice-president John Douglas.
In its rate application to the PUB, MPI suggested a 7.75-per-cent rebate -- about $49.1 million.
But the PUB, which sets rates for Crown businesses including MPI and Manitoba Hydro, believed that was not enough to reflect MPI's strong financial position, following strong investments and years of relatively stable claims costs.
Dave Chomiak, the minister responsible for MPI, said although repeated rebates may suggest MPI's rates are too high, MPI doesn't know in advance how well its investments are going to do, or whether claims are going to go through the roof.
"You'd be better off forecasting conservatively," he said.
The cheques will be mailed in the spring.
The PUB said this may be the last year Manitobans get a rebate for awhile because of how the investment markets look. As well, claims costs for the first half of the year are up, said Douglas, partly reflecting the impact of the major hailstorms last summer.
Insurance rates for more than half of MPI's policy holders will stay the same or go down next year, Douglas said.
Insurance fees will drop for most private passenger vehicles, commercial vehicles and trailers.
But motorcycle owners are going to get dinged again with an average 9.2 per cent increase, or $86 more.
The biggest target are sport bikes -- the so-called "crotch rockets" -- that make up just 16 per cent of the motorcycles on Manitoba's roads, but account for almost half the motorcycle collisions.
"Last year, we had an all-time record high for motorcycle claims," Douglas said.
Accidents to motorcycles or caused by motorcycles cost MPI $8.2 million in 2006-07. The previous four-year average was $5.4 million a year.
A single-vehicle crash will cost around $2,500. In a similar motorcycle crash, the average cost to repair or replace a written-off bike is around $13,000.
Doug Houghton, President of the Coalition of Manitoba Motorcycle Groups, said most motorcycle owners have seen their premiums jump to four or five times what they were 15 years ago.
He said he is "disappointed" the PUB gave in to MPI's request for another big hike, and said it is not fair to target all drivers of sport bikes.
"Motorcycles don't cause accidents, people do," Houghton said.
He thinks it would be more fair to assess high-risk drivers a penalty on their licence fees rather than going after responsible sport bike drivers.
Houghton said motorcycle insurance has gone up so much that some people can't afford to drive their bikes anymore.
The average motorcycle insurance fee will be $1,018 after the new rate is applied in March. That covers a vehicle that can only be ridden for five to six months a year in our climate.
The PUB also asked MPI to look at other initiatives, including addressing the impact of speeding on the number and severity of crashes, and studying whether insurance rates should be higher for drivers whose cars are big greenhouse gas emitters.
mia.rabson@freepress.mb.ca
MPI rebates: don't spend them all at once
2008
10 per cent
Average cheque: $100
Cost to MPI: $63 million
2007
10 per cent
Average cheque: $100
Cost to MPI: $60 million
2006
10 per cent
Average cheque: $100
Cost to MPI: $58 million
2001
16.6 per cent
Average rebate: $106*
Cost to MPI: $75.4 million
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