PDF Ebook Myths and Facts about Automobile Insurance in Canada
Insurance is about proper risk calculation. Proper actuarial calculations allow insurance companies to sell protection to consumers to protect themselves from unforeseen events. When such risk calculations are interfered with for political ends, the effect is to undermine the usefulness of insurance.
The assertion that competitive private sector automobile insurance is more costly than government-provided insurance is a myth. For example, the British Columbia government requires consumers to buy mandatory automobile coverage from its own insurer. That insurer, the Insurance Corporation of British Columbia (ICBC), also provides most optional coverage. Between 2000 and 2005, the average British Columbia premium ranged from the most expensive among the ten provinces (in 2000, 2001, and 2002) to third-highest (2003) and second-highest (2004 and 2005). Ontario, with private sector competition, did not possess the most expensive average premium until 2003.
Similarly, over the last six years, government-provided insurance premiums in Manitoba were yet higher on average higher than those offered in private sector provinces such as Nova Scotia and Prince Edward Island; B.C. was also higher than all four Atlantic provinces – Newfoundland, New Brunswick, Nova Scotia and Prince Edward Island – in every year between 2000 and 2005.
Media reporting on insurance costs have “torqued” inaccurate assertions. Even editorials meant to provide analysis of past news stories have missed the basic errors contained in flawed studies. The public has been left with the mistaken impression that provinces such as Alberta were more expensive on average than British Columbia when in fact B.C.’s average premiums were higher than Alberta in every year between 2000 and 2005 save one (2003, when B.C.’s average premium was $2 cheaper than Alberta’s average premium).
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PDF Ebook Myths and Facts about Automobile Insurance in Canada
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