Ebook The Personal Cost and Affordability of Automobile Insurance in Canada
This study estimates and compares the average cost of personal passenger automobile insurance premiums in each of the 10 Canadian provinces for the year 2007. Six provinces (Alberta, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador) have private competitive insurance industries that provide auto insurance for their populations in a regulated market environment. Three provinces (British Columbia, Saskatchewan, and Manitoba) each have a government-owned automobile insurer that has a monopoly over the provision of basic auto insurance and also competes for the sale of optional insurance coverage with private companies. Government insurers in these three provinces occupy between 95 and 98 percent of market share (Skinner, 2006). One province (Quebec) has a government insurer with a monopoly over basic auto insurance, but which does not compete with the private sector for the sale of optional insurance coverage and therefore occupies a much smaller market share than government insurers in British Columbia, Saskatchewan, or Manitoba.
It is important to compare the cost of auto insurance among the provinces to verify the validity of published claims that provinces with government auto insurers produce lower premiums for drivers than provinces that rely on private sector competition for the delivery of auto insurance (CAC, 2003).
Varying inter-provincial definitions for reported data make calculating comparable average premiums difficult. Government auto insurers do not publish audited data in a format that permits a simple calculation of average premiums in their provinces that can be directly compared to other provinces. In order to estimate and fairly compare the average cost of auto insurance in every province, this study applies (by estimation) the same data definitions that government regulators require from private sector insurers in six provinces to the published data of the government auto insurance monopolies in four provinces.
The main research question of this study is: Assuming that the actual number of annualized risk exposures per total provincial population in the provinces with government auto insurance monopolies is roughly proportional to the average of the provinces for which appropriate standardized comparable data is provided, what is the estimated average cost of auto insurance premiums in each province?
Contents
- Executive summary
Introduction
Findings
Conclusions
Policy recommendations
Purpose of this study
About the data
Appendix tables: Base data and calculations
References
Acknowledgements
About the author
Publishing information
About the Fraser Institute
Editorial Advisory Board
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PDF Ebook The Personal Cost and Affordability of Automobile Insurance in Canada
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