"Government-run auto insurance monopolies in British Columbia, Saskatchewan and Manitoba are charging some of the highest average premiums in Canada, concludes a new report released today by the independent research organization the Fraser Institute.
The peer-reviewed report found that drivers in BC pay the highest average premium at $1,304 annually. At $1,229, Ontario has the second highest average premium and is the only province with private, competitive auto insurance that has an average insurance premium exceeding $1,000. Saskatchewan has the third highest average premium at $1,063 followed by Manitoba at $1,029."
"The report concludes that the profit motive does not lead to higher auto insurance costs for consumers. When the private sector insurance industry is open to competition and consumer choice is protected, the portion of auto insurance premiums earned as profits will not result from excessive prices, but instead come from cost efficiencies achieved by successful claims management, pricing strategies, customer service, and good business management. Private sector insurers are also able to use the returns on invested surpluses that accrue during profitable years to subsidize premium rates in years where losses exceed the premiums paid by drivers. Such efficiencies are lost in government auto insurance monopolies where there tends to be a higher frequency of claims and suppression of rates for high-risk drivers below the actuarial cost of insuring them."
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