IBC explodes myth about public auto

Responding to misconceptions in the public domain about automobile insurance rates, the Insurance Bureau of Canada has published a report aimed at increasing the general population’s understanding.

“This study helps debunk the myths that persist despite access to independently verifiable information,” Stan Griffin, IBC’s president and CEO, said in a statement.

The report reviews the costs of auto insurance from 2000 until 2005 (the last year comprehensive statistics are available), as well as consumer perceptions.

The most prevalent myth, the report found, is the assertion that private sector automobile insurance is more costly than government-provided insurance.

Mike Milke, the study’s author, notes that in Manitoba over the last six years, “government-provided insurance premiums in Manitoba were … higher on average than those offered in private sector provinces such as Nova Scotia and Prince Edward Island.”

Faulty studies and surveys that purport to measure insurance costs by surveying Internet quotes of auto insurance in private sectors are misleading, he continues. “Quotes are merely reflections of bids,” says Milke.

For example, in one such survey, estimates of insurance premiums in 2005 exaggerated Alberta’s average premium by 67.7% and Ontario’s by 80.7%.

The complete report can be found at www.ibc.ca