The Public Auto Insurance Advantage
Aug 26, 2011
auto, buffett, gord, pc, steeves
Provincial PC candidate Gord Steeves has recently gone on record with regard to his belief that private corporations should take over Manitoba’s public auto insurance program. But, as demonstrated in an article on the MGEU website, for the average driver, privatizing our insurance just doesn’t add up. In fact, in most cases, private insurance would cost Manitobans more and provide less coverage than our public system.
In the late 1960s, the Manitoba government decided that the private sector was not providing citizens with adequate and affordable auto insurance. At that time, about 10 percent of vehicles on the road had no insurance at all, companies were denying people coverage, and the coverage that was provided contained significant gaps. The Manitoba Automobile Insurance Committee was struck, and made several recommendations towards creating a more equitable automobile insurance system for Manitobans.
The primary change would be that insurance coverage would be compulsory for drivers. This would guarantee basic coverage to all Manitobans, and would be administered by one government agency (now known as MPI) for greater efficiency. It also included an insurance plan designed to ensure that no less than 85 percent of money paid in premiums was returned to policyholders in the form of claim payments or benefits. Private sector insurers at the time returned little more than about 67 percent of monies paid for premiums.
The case for Manitoba’s public system is comprehensive. The coverage is better, rehabilitation and death benefits are better, the rates are lower, it’s a more efficient system, and it provides valuable public safety and community outreach functions. Advocates of private insurance always argue that public systems cost consumers more, but the research just doesn’t bear this out. On average, Manitoba drivers pay amongst the lowest automobile insurance premiums in the country. And we should keep it that way.
For a more detailed explanation of all of these advantages, click here.
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