The Island Regulatory and Appeals Commission announced today that its current review of auto insurance rates in the province is nearing completion. Of the 31 insurance companies that have filed their rates, the Commission has completed its review of 21 and has authorized rate reductions that will take effect on April 1, 2004. The authorized rate reductions represent coverage for about 77 percent of the more than 87,000 insured vehicles in the province.
Commission Chair, Maurice Rodgerson, said that the Commission will complete its review of the remaining 10 filings within the next few weeks. A report summarizing the Commission's review and findings will be issued at that time.
The rate filings of the insurance companies reflect recent amendments to the Insurance Act that will limit liability claims for minor personal injury to $2,500. The insurance industry had indicated that the amendments would reduce, on average, auto insurance rates by as much as 13 percent.
The Commission's analysis indicates that, of the companies that have been reviewed to date, most are indicating a premium reduction of 12-15 percent, with the remaining companies indicating a premium reduction of 8-12 percent. The differences among the companies relate, in large measure, to the current rate levels charged by those companies and how they compare to average levels within the province. Companies that have lower existing rate levels are generally reducing their rates less than those at higher rate levels.
The Commission Chair says that the companies reviewed to date have reduced rates largely as a result of the recent legislative changes. "We are pleased with the cooperation provided by the insurance companies, the information they have filed, and with the proposed rate reductions." said Rodgerson.
Mr. Rodgerson cautioned that not every insurance customer will see the same level of rate reduction. "There are many factors that are considered by the insurance companies in determining the rate to be charged an individual customer, and factors such as the vehicle and driving record of the person have a direct impact on rates. In some individual cases, while rates are being reduced, those factors could even result in a premium increase."
The Commission noted that there are broad differences in the rates charged by different companies for similar insurance coverage. For example, some companies that are reducing their rates by as much as 15 percent may still have higher average rates than those who are reducing rates by a lesser amount. Mr. Rodgerson stated that, "It appears to the Commission that competition is alive and well in the auto insurance industry in the province, and consumers who are not satisfied with the rates they pay may wish to discuss the matter with their agent or do some comparative shopping."
Rate reductions authorized by the Commission take effect on April 1, 2004. Customers who have had their policies renewed prior to April 1 should see rebates by the end of June.
For additional information, contact Maurice Rodgerson at 902 892-3501.