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IRAC FAQ's - Auto Insurance Rate Regulation
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Frequently
Asked Questions
Auto Insurance Rate Regulation
Updated: July, 2020
The following FAQs are intended as a general guide
to auto insurance rate regulation in Prince Edward Island.
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1.
What is the Commission's role regarding auto insurance rate
regulation in PEI?
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Since 2004, the role of the Island Regulatory and Appeals
Commission ("IRAC" or the "Commission") has been to regulate
auto insurance rates for all underwriters or insurers doing business in PEI.
Each insurer is required to submit its rates for the
Commission's review at least once every twelve months. There are
roughly 33 insurers operating in PEI that are responsible to
file with the Commission.
Information on auto insurance licensing and underwriting in
Prince Edward Island can be found through the province's
Office of the Superintendent of Insurance.
[Link
to Insurance Act] |
2.
Does IRAC review rates for all types of vehicles?
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Yes. The Commission reviews rates for all classes of vehicles.
Private passenger makes up the biggest class of vehicles insured
in PEI. Other classes reviewed include, commercial vehicles,
interurban trucks, ATV's, taxis, snow machines and motorcycles.
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3.
Is auto insurance mandatory in PEI?
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Yes, owners of motor vehicles in PEI must obtain insurance
coverage. Mandatory coverages include, third party liability,
accident benefits, and accidents caused by uninsured and
unidentified motorists.
Drivers also have the option to purchase additional insurance
that would cover loss and damage to your car.
For more information on PEI's mandatory auto insurance coverages,
check out the
Insurance Bureau of Canada's PEI Mandatory
Coverage summary.
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4.
What is Direct Compensation Property Damage (DCPD) and how
does it affect me?
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DCPD was introduced in the province on October 1, 2015. Under
the DCPD model, a driver deals with his or her own insurer
directly regardless of who is at fault for the accident. DCPD will cover the portion for which you are not at-fault.
Collision coverage, if you choose to purchase it, will cover the
portion for which you are at-fault.
DCPD is not "no-fault" insurance. Just like the former system,
fault must be determined as at-fault accidents may affect your
rates.
In the event of an accident, consumers are reminded to still be
sure to obtain the other party's proof of insurance information
(insurer and policy number with a valid date). You will need
that information for DCPD to apply. For more information, see
the province's
DCPD summary.
5. Are there limits on accident awards for minor personal
injury (pain and suffering) claims in PEI?
Yes. On April 1, 2004 the province enacted legislation
which limited automobile accident court awards for
non-pecuniary (pain and suffering) damages to $2,500
when an injury was deemed a "minor personal injury."
The cap amount was subsequently reset to $7,500 and the
definition of "minor personal injury" was revised for
accidents occurring on or after October 1, 2014.
Effective January 1, 2016, the cap amount is indexed by
the province's annual average percentage change for
all-items Consumer Price Index of the preceding year,
each January 1st. For details on the indexed amounts, go
to the
province's
annual indexation file.
6.
Why do rates differ from company to company?
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There are broad differences in the rates charged by
different insurers for similar insurance coverage. How
much you pay for auto insurance will be based on many
factors including, your gender, driving record, accident
claims, where you live and how much you drive. A
company's losses, expenses, and the number and type of
customers they service also affect rates.
It is recommended to seek quotes from different brokers
or agents to compare auto insurance rates as they can
vary from company to company.
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7. How do average auto insurance premiums in PEI compare to
other provinces?
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In 2019, the average annual premium for private
passenger vehicles on Prince Edward Island was
approximately $839 - one of the lowest in Canada.
Direct comparisons can prove difficult because of
differences in the auto insurance product offered in
each province. The best comparison is between NB, NS and
PEI where there are very similar benefits and
marketplaces.
The following table shows the average auto insurance
premiums across Canada -
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8. Who do I contact if I have a complaint about my auto
insurance?
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If you have a concern about the actions of an insurance
company, agent, broker, or adjuster, first speak to the
insurance company. The company should have an Ombudsman
to help you.
If you aren't satisfied with the company's response on a
rate-related matter, you can reach out to the
Commission.
If the matter is not rate-related, then you can contact
the
Superintendent's Office for assistance, or they can
direct you to a consumer insurance advocate or ombudsman
agency.
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Last
Reviewed or Updated :
2020-11-17
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