REGINA - Auto insurance rates are going up in Saskatchewan.
The provincial government approved a 1.03 per cent overall increase to Saskatchewan Auto Fund rates, along with rate rebalancing, and a 1.23 per cent surcharge on all rates for a one-year term.
The new rates will take effect August 31, 2013.
SGI had originally requested a 1.23 per cent rate surcharge for the next three years to replenish the Rate Stabilization Reserve, but the rate review panel recommended the rate surcharge be approved for one year only.
Minister responsible for SGI, Donna Harpauer, said Monday the panel found the overall increase to be reasonable and recognized the importance of rebalancing rates to improve fairness.
She also said the rate rebalancing will bring about 80 per cent of the vehicle population to within five per cent of their required rates, up from only half today.
"Rebalancing helps promote fairness by adjusting customers’ rates so that each vehicle is charged the correct rate to cover the claim costs for that type of vehicle," the government said in a news release.
To ensure each vehicle group is paying sufficient premiums, the government said some rates need to be increased and some decreased. It says 63 per cent of Saskatchewan vehicle owners will have rates increase on average by $3 per month.
Thirty-five per cent of vehicle owners will see their rates go down, on average, $2 per month and 4,000 vehicle owners will see no change to their rates.
The government considered the panel’s suggestion that increases for motorcycles be deferred until the results of the motorcycle review are known. While that review will hopefully result in changes that will impact the need for future rate increases for motorcycles, they won’t be implemented in time to impact this rating year.
In fairness to all vehicle owners, motorcycle owners will see rate changes just like all other vehicle owners in the province in this rating program.
To help reduce rate shock, SGI will cap increases for all vehicle groups, including motorcycles. Vehicle groups with annual rates greater than $1,000 will be capped at a maximum increase of 15 per cent, while those with annual rates less than $1,000 will have dollar caps ranging from $25 to $150.