Do You Know The Difference Between Government and Private Auto Insurance?

 I don't know about you, but there is a lot of information about insurance out there that could put a girl on overload. For instance, did you know there is a huge difference between Government and Private Auto Insurance?

 I knew there was a difference and would prefer private over government, but I wasn't aware of all of the information out there letting me know exactly what the difference was. There's so much information out there and not just what you read, but when talking to friends and family as well. So much information from different people and perspectives can drive you crazy. Thankfully with the help of IBC I was able to better understand the difference and learn a bit more. IBC has been working to make insurance less confusing. Thank goodness! Their Time to Talk campaign is all about showing us Ontarians how insurance works and what it means.

Check out some of the myths related to government-run vs. private auto insurance systems below:

GOVERNMENT

Limited choice for customers - Government-run auto insurance provides a

“one-size-fits-all” solution for consumers (e.g., fixed deductibles, no multi-vehicle discounts).

Fewer benefits - While it is true that the government-run insurers in Manitoba and Saskatchewan have lower premiums in dollar terms, consumers in these systems have far fewer benefits. BC is a tort jurisdiction. On paper the benefits are quite rich, there is no cap. In Manitoba, for example, an accident victim who is catastrophically injured has no right to sue for economic losses – including future lost wages – that are over and above a predetermined amount. Drivers have had the choice to opt out of no fault and chose to be in a tort system since 2003, but very few drivers chose this option.

  

Huge start-up costs - Depending on where you are in Canada, the average cost to establish a government-run insurance company would be $300-$500 million.

PRIVATE

Competition works - Auto insurance is purchased competitively in almost every jurisdiction in North America.

Insurance rates reflect true cost -Premiums in a competitive environment reflect the real cost of insuring a driver. Auto insurance premiums are set based on a host of factors that affect the frequency and cost of claims.

Employment - Private auto insurance systems provide vital injections of

investments, jobs and taxes into regional economies. The private insurance industry in Canada employs almost 100,000 people, either directly or through its support of a broker workforce.

For more information about both insurance, please feel free to check out IBC online.

Disclosure: This post is compensated. Although this post has generously been sponsored by Insurance Bureau of Canada, the opinions and language are all my own, and in no way do they reflect Insurance Bureau of Canada.

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