How Saskatchewan brokers are handling the French fries challenge

Roughly half the motorists in Saskatchewan lack adequate auto insurance because they are only buying the mandatory minimum required by law from the province’s government-run auto insurer, a broker warns.

Saskatchewan’s 70-year-old-plus Auto Fund writes basic minimum liability, damage to or loss of an insured’s vehicle and also covers first-party medical costs and income replacement for accident victims. Auto Fund is a monopoly run by crown corporation Saskatchewan Government Insurance.

“The main concern that we have collectively – not just brokers – is that half the population of the province operates only with the basic plate coverage,” Dave Pettigrew, president and chief executive officer of Regina-based brokerage Harvard Western Insurance, said Wednesday in an interview.

Basic plate coverage – which all Saskatchewan motorists must buy from SGI – includes no-fault accident benefits. Motorists automatically get no fault unless they specifically choose tort.

Extension auto coverage in the province – where private insurers are allowed to compete with SGI – could include higher liability coverage or lower deductibles for vehicle damage.

But base plate coverage has a limit of $200,000 in liability, “which we really consider to be inadequate,” said Pettigrew, who is also vice chair of the Insurance Brokers Association of Saskatchewan.

Ontario – which does not have a government-run auto insurer – also does not require motorists to buy more than $200,000 in liability coverage, though Ontario auto carriers tend to advise motorists to buy at least $1 million in coverage. The mandatory liability coverage of $200,000 is “just a fraction of the funds necessary to cover catastrophic injury claims and a situation which often compels plaintiffs to seek out those with deep pockets to provide for long-term care,” the Association of Municipalities of Ontario said in an earlier report.

In Saskatchewan, IBAS “recently struck an advisory committee on extension auto,” Pettigrew said, adding that committee will include not just brokers but also representation from SGI and Saskatchewan Mutual Insurance.

The end result that brokers want “is to have a better insured public,” Pettigrew noted.

He added it’s difficult to convince some consumers – who often shop for the lowest price – that they should buy more than just the mandatory auto coverage.

Buying optional additional auto coverage “is like going to McDonald’s, and buying a burger, picking out the burger, paying for it and then being asked ‘would you like to talk about fries?’” said Pettigrew.