September 10/2003

Attention News/Political Editors:

WINDSOR, ON, Sept. 10 /CNW/ – The Consumers Association of Canada released a new study today that confirms what NDP Leader Howard Hampton has been saying all along: public auto insurance delivers lower rates than a for-profit, private system. “We already know that a publicly-operated system like those in British Columbia, Manitoba and Saskatchewan will save consumers money,” Hampton said. “Now that the Consumers’ Association of Canada is saying the same thing, perhaps Ernie Eves and Dalton McGuinty will finally get it too.” The report, which looked at more than 7,000 actual rate quotes, found Ontario’s rates, by far the highest in Canada, average about $2450, compared to average rates of $1100 in B.C., $800 in Saskatchewan, and $700 in Manitoba, where consumers benefit from public systems. Toronto drivers pay the highest rates in Canada, more than $2500, compared to rates of $1350 for Vancouver drivers. Joining Hampton was former Manitoba Premier Howard Pawley, who introduced public auto insurance in 1971 in Manitoba, where consumers continue to enjoy stable and lower rates. The NDP would introduce a public plan that would provide basic compulsory insurance to all drivers on a non-profit basis. Any surpluses would be reinvested or distributed to drivers. In British Columbia, the same system requires no taxpayer subsidy and has kept rates lower and stable for 30 years. Lower rates are guaranteed because:

– Industry profits are eliminated.

– Administration savings are substantial with just one company, not more than 100, delivering compulsory insurance.

– Solvency costs are lower thanks to a huge risk pool.

– Eliminating the premium tax eliminates another three per cent from fees.

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