More than half of Manitoba drivers will move to 8, 9 or 10 merits and save $9 million dollars in driver premium
Manitoba Public Insurance applied to the Public Utilities Board for its first rates under a new merit/demerit system designed to provide stronger rewards and incentives for safer driving.
The special rate application moves Manitoba one step closer to the introduction of the new system called the Driver Safety Rating, which was introduced to Manitobans during public consultations last fall. The Driver Safety Rating was accepted by government earlier this month, and will come into effect for Autopac policies and driver’s licences renewed after November 1, 2009.
If the rates proposed today are accepted by the PUB, Manitobans will collectively pay almost $11 million less in driver premiums from the day the new model is introduced and onward. The safest Manitoba drivers will pay no driver premium (or five dollars if they don’t own a vehicle), compared to their current driver premium of twenty dollars.
“With input from Manitobans, we’ve designed a system that can provide stronger financial incentives to drive safely, while making it easier to understand how the way you drive affects the amount you pay,” said Manitoba Public Insurance Chief Executive Officer Marilyn McLaren.
“We’re pleased that many Manitobans could see savings during the very first year of the new system.”
The rate application filed today is for policy years beginning between November 1, 2009 (when the Driver Safety Rating comes into effect) and February 28, 2011. For this 16-month transition period, Manitoba Public Insurance is asking PUB to keep almost everyone’s rates about the same as, or slightly lower than, they would have been under the old system.
“As we increase the discounts for the safest drivers, we’ll also need to increase the penalties for those who persist in higher-risk behaviour. We want to ensure those drivers have a chance to improve their habits before higher penalties are introduced – so for the first year, we are proposing that no one will pay more, and the maximum vehicle insurance discount remain at 25 per cent. Within a few years, we expect to introduce higher discounts for safer vehicle owners.”
Manitoba Public Insurance sought public feedback on the new Driver Safety Rating in September 2008, after first doing preliminary research on the basic underlying concepts. Manitobans were invited to learn about the model by reading a discussion paper, viewing online material and talking with company representatives at shopping mall displays. They were then encouraged to express their views by way of written submissions and an online survey.
The corporation estimates that more than 1,000 people stopped at the mall displays, and hundreds completed the survey or submitted written comments. More than 90 per cent of the feedback was supportive of the new model, which uses one integrated up-and-down scale to show how much risk a driver brings into the insurance pool, and how much premium the driver should pay as a result.
Manitobans are invited to check out this website to learn more about the new Driver Safety Rating and view the feedback from the public consultation. Manitoba Public Insurance plans to conduct an information campaign to help drivers prepare for the transition.
Hearings regarding this first rate application under the Driver Safety Rating are expected to take place this spring.
