With the recent increase in the price of gasoline to over $1 per liter across Manitoba – an increase that looks as though it’s here to stay, the simple act of driving has again become more expensive. There is however one aspect where Manitobans are receiving a break, and may continue to do so for some time – insurance premiums.
Vehicle registration/insurance has typically been quite low in Manitoba in comparison to other provinces, and in many cases, other countries. For example, in the case of the average working citizen driving a basic car to and from work, an older 1991 Honda Civic will cost about $1100 for a year at the 2006 rates. A 2004 Pontiac Sunfire would be about $1700. These amounts are reduced by up to 25% if you have the merits to qualify for an Autopac Discount. They are reduced further still by $40/year if you have an approved electronic ignition mobilizer installed in your vehicle to help prevent theft. For readers from other parts of the world, this includes coverage for anyone driving your vehicle, gives you a $500 deductible (upgradable), $200,000 liability (upgradable), and all-purpose coverage.
The fight to reduce theft
First of all, these rates are despite a high vehicle-theft rate in Manitoba. Since MPI obviously realized that the current legal system isn’t about to offer anything in the way of deterring theives, they started offering the discount for those who have an approved “immobilizer” installed – a device which makes it extremely difficult for a theif to steal a vehicle – so much so, that a vehicle with one installed is considered to be effectively “theft-proof”. For whatever reason, not many Manitobans took up MPI on this offer. Maybe it’s because a $300 immobilizer will take about 8 years to “pay” for itself through the $40/year discount. More likely, it’s because a) many Manitobans are too lazy to bother, b) Manitobans are cheap, and c) many Manitobans don’t seem to care terribly much if their vehicle gets stolen. Sure we’re all crime-fighters from behind our television sets, but getting proactive about it..?! Get real.
Seeing the lack of interest, and with vehicle theft rates still rising, MPI decided to split the cost of an immobilizer 50/50 with the policyholder. With MPI now paying half, you could get an immobilizer for only $140. Not only that, MPI was also willing to finance that $140 at 0% interest over 5 years. Remember, you’d be saving $40/year, so it would pay itself off in only 3.5 years. Even if you financed the cost over 5 years, you’d be paying $28/year but saving $40/year for having the immobilizer, so looking at it that way, you get a free immobilizer, a $12/year discount for the first 5 years and then a $40/year discount afterwards.
For those who routinely sell/upgrade/etc every couple years, it probably wouldn’t make perfect financial sense. The same goes for those who are ‘accident prone’, those who drive ‘beaters’ that are due to die any moment, or anyone else who probably won’t have the same vehicle for more than a few years. But for everyone else, you have to admit, it’s a pretty sweet deal. You save money, reduce the chance that your vehicle might go missing at an inconvenient time, and you get to help fight crime at the same time.
Sadly, that’s not enough somehow, as the program didn’t really seem to catch as well as it should. One might start to think that Manitobans are either incredibly lazy or incredibly stupid ignorant.
The next step for MPI has been to give away the immobilizers. Yes, they’re so desperate to reduce auto thefts that they’ve resorted to paying for the devices for owners of ‘high-risk’ vehicles (others still qualify for the 50/50 program). The sad thing is, MPI is doing it to help reduce insurance costs for the consumers who are too lazy or ignorant to be proactive in helping to reduce the costs themselves. Somehow this reminds me of the teacher who desperately tries everything they possibly can to teach the students who have absolutely no interest in learning… these being the same students who cry and complain at the end of the year when they see the consequences of their inaction. Here, MPI continues to try to keep rates low, but Manitobans do nothing to help them out, and then get upset when they find their premiums have gone up the next year. How pathetic.
If this new immobilizer program doesn’t work out, I suppose MPI will end up having to hire a 100% paid-for-by-MPI security guard for every high-risk vehicle in Manitoba. Of course, they’d have to make it an “opt-out” program, because if it’s “opt-in”, it would probably flop as well.
Anyway, the point is that MPI is trying to reduce claims, and reduce the cost to Manitobans. A worthy cause, and I commend them for doing it.
A few years ago, MPI found themselves with a $20-million surplus. They decided they would donate it to 3 different Universities. This made rate payers furious, so MPI reneged, and instead offered a one-time 16.6% discount to policyholders.
Earlier this month, MPI began sending letters to policyholders. Again, they’ve had a surplus, and have sent rebate cheques for 10% of the insurance premiums for the 2004-2005 insurance year for a total of $58 million. The letter policy holders receive is as follows:
When we succeed, you benefit
With this letter, you’ll find your Basic Autopac rebate cheque, which equals 10% of the premium you paid during your 2004-2005 insurance year.
In total, we’re rebating $58 million in premiums to our policyholders across Manitoba.
Our success as your automobile insurer makes this rebate possible. High investment income has put more in our savings account than we expected. Now, that extra money is flowing back to you.
This is unusual. Most automobile insurers simply don’t rebate premiums to their policyholders.
But we’re not like most insurers. This is the second rebate to Manitobans in the last five years. In total, we’ve rebated about $140 million to our policyholders since 2001.
What’s more, most Manitobans will see their premiums go down for 2006. Year in and year out, Autopac premiums remain among the lowest in Canada. Your public insurance system works!
The Public Utilities Board determined how much your rebate should be. Here are some things you should know:
-If you had a valid Autopac policy in the 2004-2005 insurance year, you’re entitled to a 10% rebate of the premium you paid in that year.
-The rebate applies to Basic Autopac only, which is the compulsory part of your Autopac insurance. It doesn’t include any premiums you paid for optional Autopac like lower deductibles, higher third party liability limits, or Auto Loss of Use, among others.
-Your rebate is based on the net premium you paid. It doesn’t include any credits or refunds you received or any administration/service fees you paid.
If you have questions about your rebate, please call your Autopac agent.
Count on us to keep working with you.
More credit should probably be passed on to the Public Utilities Board, but the point is, when MPI adds up the financial numbers and ends up high in the plus-side, we get some money back. Still not as great as the Co-op yearly gas rebates around here, but certainly welcomed all the same.
Why things are looking good
Not only are our insurance premiums fairly low (relatively speaking), but our sole auto insurance provider seems to be doing everything it can to keep them low. It’s almost surprising because with the lengths and measures they have to take to do it, you’d think it’d be easier to let the thefts/claims skyrocket and just deal with the complaints. All I’ve got to say is there must be some good people running things, and I’m glad they are. Eventually, assuming the immobilizer program is successful, thefts should go down, which means that unless there’s another factor driving up claims, insurance premiums should go down too (or we should be in for another rebate at some point down the line).
No, I’m not crazy about MPI. But you have to admit, they’ve taken some respectable steps to keep our costs down – which is more than many others can say about their insurance companies.