Regulatory and Appeals Commission (IRAC), Prince Edward Island

IRAC FAQ's - Auto Insurance Rate Regulation

Frequently Asked Questions

Auto Insurance Rate Regulation

This is the first in a series of FAQs on auto insurance
rate regulation in Prince Edward Island.

Initially published: February, 2006

The following FAQs are intended as a general guide to auto insurance rate regulation in Prince Edward Island. Additional FAQs are under development.

1. When was auto insurance rate regulation introduced in PEI?

In December of 2003, amendments to auto insurance legislation came into effect in Prince Edward Island that imposed a limit of $2,500 on minor personal injury claims. The amendments also introduced auto insurance rate regulation in the Province and mandated that all insurers must seek Commission authorization for rate changes. Each insurer must now file its rates for the review of the Commission at least once every twelve months.

[Link to Insurance Act]

2. Has the imposition of limits on minor injury claims resulted in lower auto insurance rates?

Yes. In 2004, the Commission reviewed the rates of 31 insurers. On a weighted average basis, insurance rates decreased by approximately 10%. Rates for third-party liability coverage decreased by more than this.
In 2005, the Commission reviewed the rates of 32 insurers. Rates again decreased - on a weighted average basis - by a further 4% to 5%.

3. Does this mean that everyone's rates have reduced by these amounts?

On an industry-wide basis in the province, rates have reduced by these amounts. However, since rates are a product of many factors - including vehicle age and type, age and driving record of the driver(s), and other factors, rate changes for individual drivers will have varied.

It is noted, as well, that there are broad differences in the rates charged by different insurers for similar insurance coverage. In some cases, companies that reduced rates by the above amounts still had higher average rates than companies that reduced rates by lesser amounts.

Below is a table that shows average rate changes, by insurer, for the years 2004 to 2006. In reviewing this table, care should be taken not to equate percentage reductions with overall insurance costs.

Insurer	Total Rate Reduction 2004 - 2006
Aviva Insurance Company of Canada	16.8%
CAA Insurance Company (Ontario)	13.0%
Co-operators General Insurance Company	27.8%
Coseco Insurance Company	14.7%
The Dominion of Canada General Insurance Company	21.2%
Echelon Insurance Company	0.0%
Economical Mutual Insurance Company	29.5%
Elite Insurance Company	10.3%
Federated Insurance Company of Canada	13.0%
ING Insurance Company of Canada	19.8%
The Insurance Company of Prince Edward Island	18.9%
Lombard General Insurance & the Tokio Marine & Fire	4.4%
Market Insurance Company of Canada	10.3%
The Personal Insurance Company	0.0%
The Portage La Prairie Mutual Insurance Company	17.7%
Primmum Insurance	0.00%
RBC General Insurance Company	25.6%
Royal & Sun Alliance Insurance Company of Canada	9.9%
Security National	0.00%
The Sovereign General Insurance Company	21.3%
TD Home & Auto/Formerly Liberty Insurance Company	13.9%
Traders General Insurance Company	12.0%
Trafalgar Insurance Company of Canada	17.5%
Unifund Assurance Company	19.9%
Waterloo Insurance Company	21.6%
The Wawanesa Mutual Insurance Company	30.7%
Zurich Insurance Company	0.00%
Facility Association	2.5%

4. I've compared my bills over the last two years and I don't appear to be receiving the indicated reductions.

Check with your agent or broker. He or she should be able to fully explain your bill.
If the explanation is not clear, you can write to the Commission. The Commission will contact your insurer and obtain a written explanation.

Last Reviewed or Updated : 2015-01-15