Province proposes changes to commercial auto insurance

An expert panel on Quebec auto insurance says it welcomes a recommendation to introduce four new, streamlined categories for commercial vehicles in the province.

“The panel…welcomes SAAQ’s efforts to refine its method of calculating the insurance contributions for commercial vehicles so that their rates reflect the risk represented by each insured vehicle category as accurately as possible,” says the Conseil d’experts sur les contributions d’assurance automobile in a press release.

SAAQ is the Société de l’assurance automobile du Québec, the province’s auto insurance plan. The expert panel examined insurance contributions proposed by SAAQ for 2025 through 2027 and released its French-language report last week.

One proposal is the introduction of four new categories of commercial vehicles. As it stands, the commercial vehicle category comprises 18 distinct categories for more than 1.1 million vehicles, the greatest number of which are vehicles whose plates include the prefix F.

This includes 609,000 commercial vehicles, such as trucks, pick-up trucks and vans up to 3,000 kilograms or less, driving school vehicles, snow blowers, ambulances, hearses, certain motor homes and tow trucks.

The proposal would split the existing broad categories of vehicles with an F prefix into four more specific categories:

• Passenger vehicles for commercial use;
• Motor homes;
• Emergency vehicles; and
• Other commercial vehicles with an F prefix.

 

Tailored to risk profile

Each new category will have its own tailored insurance contribution, reflecting its specific risk profile. The reclassification aims to ensure each vehicle type pays a rate proportional to the risk it presents.

For example, emergency vehicles will have a 2025 insurance contribution of $121.23, increasing to $145.87 in 2026 and $148.79 in 2027. Motor homes, on the other hand, will have a contribution of $58.24 in 2025, $59.64 in 2026 and $60.83 in 2027.

The reclassification means the first three categories bring together approximately 90% of the vehicles previously grouped in the F prefix plate category, the report says. The “other commercial vehicles with an F prefix” category is largely made up of “tool vehicles” used by tradespeople.

The proposed changes reflect a 2021 recommendation made by the panel.

In general, the panel does not recommend changes to any insurance contributions proposed by SAAQ for 2025 to 2027. “The panel considers that the SAAQ proposal complies with the laws and regulations in effect and is fair and reasonable,” the release says.

The panel reached its conclusions after reviewing the approach taken by SAAQ to determine insurance contributions, verifying the data used to support the proposed amendments and holding a public consultation. The panel’s report focuses on four main issues: financing the auto insurance plan, funding, road safety and customer service. It contains 41 observations and recommendations.

The panel says it welcomes initiatives taken to oversee motorcycle driving and the creation of three levels of driving experience:

• Less than three years’ driving experience;
• Three years to five years of experience; and
• Five years’ experience and more.

Essentially, insurance pricing for motorcyclists with five years or more experience will be lower than for those who have less than three years’ experience. This also reflects a 2021 recommendation from the panel that SAAQ consider driving experience and training of motorcyclists in pricing.

Generally speaking, Quebec’s auto insurance fund is on solid ground, says actuary Micheline Dionne, chairwoman of the expert panel.

“At the end of 2022, it had $13.5 billion in assets,” she says in the release. “When the fund was created in 2004, it was underfunded by more than $600 million. Over the last five years, the fund has posted a surplus that has enabled the SAAQ to remit $2 billion to Quebec motorists.”

 

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