About Public Auto Insurance
Public auto insurance in Canada is a system where the government owns and runs a monopoly to supply basic auto insurance or all auto insurance. As the auto insurance provider is owned by the province, it either operates as a non-profit or its profit funds other public projects.
History
All public auto insurance providers were started through NDP provincial governments between the 1940 and 1980. The policy comes from the publics’ concern at the time for the state of private auto insurance. Usually describing the private industry as expensive, confusing, and inadequate.
Pros:
- Lower Premiums
- Licensing, vehicle registration, and insurance all through the same institution
- Easier claims process
Cons
- Fewer incentives for efficiency gains or product changes
Public Auto Insurance by Province
Saskatchewan
Started in 1945, Saskatchewan Government Insurance (SGI) forms two distinct auto insurance branches. Saskatchewan Auto Fund supplies auto insurance that is mandatory for all vehicles in the province and operates as a long term non-profit. Bonus or additional coverage can be purchased through SGI’s other branch, the property and casualty division known as SGI Canada.
Manitoba
Manitoba Public Insurance (MPI) was started in 1971 after extensive public hearings found the current private system to be confusing, expensive and inadequate. Since 2004 it handles all driver and vehicle insurance in the province, as well as driver licensing and vehicle registration. MPI operates as a non-profit.
British Columbia
Insurance Company of British Columbia (ICBC) was started in 1973 and is the sole provider of basic auto insurance coverage in the province. Additional coverage can be purchased through ICBC or a private auto insurance provider. ICBC does however operate as a for-profit institution generating revenue for the province more broadly. Funds are also used to reduce rates if ICBC collected too much in premiums.