Study
| EST. READ TIME 1 MIN.The Personal Cost and Affordability of Auto Insurance in Canada: 2011 Edition
This study compares the average cost and affordability of personal passenger automobile insurance premiums in each of the 10 Canadian provinces from 2007 to 2009. Four provinces have government-owned monopolies that sell insurance coverage to drivers. The other six rely on a regulated competitive private sector to provide auto insurance.
Comparisons across all 10 provinces in the years from 2007 to 2009 show that the average price for auto insurance premiums was highest in British Columbia, Ontario, Manitoba, and Saskatchewan. Of those provinces, three have government-run auto insurance monopolies. The least expensive average premium in 2008 was in Prince Edward Island where auto insurance is delivered in a regulated, competitive, private-sector insurance market. The least expensive premium in 2007 and 2009 was in Quebec, which has a government-run auto insurance monopoly but only for bodily injury.
The study examines why Ontario has relatively high average premiums and why Quebec's average premiums are relatively low. Ontario has relatively severe regulations, and is experiencing a significant problem with insurance fraud. Quebec has less onerous rate regulations and less generous prescribed benefits.
The findings are generally consistent with previous editions of this study and other previous research comparing auto insurance in international jurisdictions including all 10 Canadian provinces. All studies show that auto insurance does not tend to be less costly in jurisdictions that have government auto insurance monopolies, despite claims to the contrary.
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Neil Mohindra
Neil Mohindra is the former Director of the Centre for Financial Policy Studies at the Fraser Institute where he authoreda number of papers, articles, and opinion pieces on securities regulation and insurance. Mr. Mohindra previously worked for the Financial Services Commission of Ontario as Policy Manager for the Joint Forum Secretariat, Joint Forum of Financial Market Regulators, in which he managed the cross-sectoral projects of Canadian provincial pension, securities, and insurance regulators. This included strategic planning, developing policy options and recommendations, managing external stakeholder engagement, and developing communications strategies. Mr. Mohindra worked for Insurance Bureau of Canada as a Senior Policy Analyst and led the development of industry positions on a number of issues key to the property and casualty insurance industry such as the 2006 review of federal financial institutions legislation. Prior to Insurance Bureau of Canada, he was a policy analyst on financial sector issues at the Department of Finance Canada where his responsibilities included briefing the departments member on the Financial Stability Forum. Earlier, he was a research associate with the Task Force of the Future of the Canadian Financial Services Sector (the MacKay Taskforce). He holds a BA (Honours) in Social Sciences (Economics) from the University of Ottawa and an MBA in Finance from McGill University.… Read more Read Less… -
Emrul Hasan
M. Emrul Hasan was a Researcher in the Centre for Financial PolicyStudies at the Fraser Institute. He teaches finance andeconomic policycourses at Simon Fraser University as a teaching assistant and in North SouthUniversity (Bangladesh) as a lecturer. He is also consulting for firms in thebanking, P3, agriculture, leather, and textiles sectors. Previously he workedat York University as a teaching assistant. Prior to moving to Canada, Mr.Emrul worked as a research associate for the Asian Tiger Capital Partnersinvestment bank. He was a member of both their macroeconomic consulting andcorporate advisory teams where he worked extensively in M&A deals, sectorresearch, policy studies, and advocacy. He has published in finance andeconomics. He graduated from York University with an MA in Financial Economics.He earned a BBA (summa cum laude) in Finance and Economics from North SouthUniversity. He is also a Chartered Financial Analyst (CFA) candidate.… Read more Read Less…
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