03/14/2013 01:14 EDT | Updated 05/14/2013 05:12 EDT

Saskatchewan to cap motorcycle insurance increase; other drivers to cover costs

REGINA - The Saskatchewan government is trying to dampen the roar of angry motorcyclists by capping a hefty insurance increase, but it appears the move will hit other drivers in the pocketbook.

The proposed increase from Saskatchewan Government Insurance would have seen insurance costs for motorcycles go up by an average of 73 per cent.

Instead, the province has asked SGI to amend its proposed rate hike so that it's capped at 15 per cent for motorcycles with annual rates greater than $1,000.

Motorcycles with annual rates of $1,000 or less will be subject to a dollar cap instead of a percentage cap, with a maximum increase of $150 annually.

"The motorcyclists were very, very vocal saying it was too much, too soon, and can we look at options, and we don't disagree with their position that we should be looking at options," Donna Harpauer, minister responsible for SGI, said Thursday.

Motorcyclists were shocked at the initial proposal and said the move could force them to give up their bikes.

One Regina motorcycle enthusiast who has been riding since 1968 said at the time that insurance on his Ducati would go from $1,300 a year to $5,300.

SGI said the move was necessary because there is a wide gap — about $9 million — between what they take in from motorcyclists in fees versus what they pay out for their at-fault collisions.

Information on the company's website said the shortfall is essentially being subsidized by operators of other vehicles.

Harpauer said other drivers have "always been subsidizing motorcyclists, so that will just continue."

Under the original proposal, 57 per cent of Saskatchewan vehicle owners would have seen rates increase an average of $28.

The revised proposal means 63 per cent of Saskatchewan vehicles owners would see their rates increase an average of $35 per year.

Harpauer acknowledged some drivers won't be happy.

"We have heard a little bit from other drivers already and I think we'll going to hear a little bit more and we're going to ask them to be patient because we're going to work on this issue," she said.

Harpauer said the long-term goal is to have motorcycle rates cover motorcycle liability.

"We can't continue indefinitely subsidizing different categories, but we do understand that perhaps we need to for one more year," she said.

SGI CEO Andrew Cartmell said the corporation will look at safety initiatives and the injury benefit levels provided in the insurance coverage, which would require some legislative changes.

Cartmell said it could take a couple of years to close the gap.

"We're going to be tasked with working with various stakeholders to come up with some proposals. We hope to do that by the fall, to have some recommendations," he said.

The Saskatchewan Rate Review Panel is expected to come to a decision on SGI's proposal in June, with public consultations to be held before then.

Any rate changes would not go into effect until Aug. 31.