Manitoba’s Public Utilities Board (PUB) has ordered the province’s public auto insurer to increase basic auto insurance rates 5.7% for the 2025/26 insurance year.
The order applies to Manitoba Public Insurance’s (MPI) compulsory, basic line of business that is mandatory for Manitoba drivers. The increase takes effect Apr. 1, MPI says in a statement.
In MPI’s general rate application last July for universal compulsory auto insurance (basic) premiums, the corporation requested an overall rate increase to basic premiums of 3%. However, MPI’s calculations of the overall basic rate increase using the accepted actuarial practice (AAP) was 6.77%, PUB notes in its order.
“MPI has confirmed that the actuarial calculations do not support the requested 3.0% rate increase,” PUB writes in its order issued Tuesday. “During the hearing, MPI took the position that AAP is ‘the starting point’ and that it has taken into account the need for premiums to be affordable and predictable for ratepayers.”
But PUB says it has “consistently aimed for affordable rates for ratepayers, noting that its orders for the past five years have resulted in rates decreasing by more than 15%. In addition, the Board approved $439.1 million in rebates in 2021 and 2022.”
In July 2023, MPI requested no change to overall rates for the 2024/25 insurance year, but was ordered to make a 5% increase. By 2022, MPI had applied for its fourth consecutive annual rate decrease.
The 5.7% increase to basic rates coming this April represents an increase of $50.84 per year or $4.24 per month for the average passenger vehicle policy, MPI reports.
MPI offers additional coverage through its optional extension line of business, which includes additional third-party liability coverage and rental vehicle insurance.
Though the coverage is not mandatory, MPI reports 96% of customers choose to purchase the products through the public auto insurer. The line of business involves slightly higher premiums to reduce the deductible customers would pay in the event of a claim.
In the current insurance year, MPI’s board of directors approved a 10.32% increase to extension rates, representing an increase of $9.60 per year for the average passenger vehicle policy.
Beginning Apr. 1, extension rates will increase 2%, or $1.99 per year on the average passenger vehicle policy.
PUB also approved MPI’s application for a $10 increase to the annual cost of a driver’s licence, which has not increased since 1997.
An expansion of the driving safety rating system was also granted, meaning customers who move to the new level 19 on the scale will receive an additional discount above the current maximum of 46%.
Feature image by iStock.com/EHStock
