Public Auto Insurance is one of two types of operated systems of car insurance in Canada, the other being Private Auto Insurance. Car insurance companies operated in the Canadian provinces of British Columbia, Saskatchewan, Manitoba and Quebec are both government owned and operated forms of Public Auto Insurance. According to the Consumer’s Association of Canada, car insurance rates charged in these provinces are significantly lower than in provinces that use Private Auto Insurance. However a study conducted in 2011 by the Fraser Institute concluded that the highest auto insurance rates were paid in three of the four previously mentioned Canadian provinces (Ontario, British Columbia, Saskatchewan), with the fourth being Manitoba.
Typically, public auto insurance is limited to the coverage of personal injuries, while property damage is usually covered by separate private insurers. It should be noted that this system happens to affect every party involved quite differently.
As stated by former premier of Manitoba, Howard Pawley, “administrative costs of public plans avoids costly administrative duplication and are only one half as much as those incurred by private insurance companies.” In other words, Pawley is saying that public plans would ensure that there was one source for executive matters and one major computer system to accompany it as opposed to several. In this sense, any profits made in private industry would be paid to policy holders as opposed to insurance company shareholders.
Moreover, there are a view advantages to public auto insurance. Provinces that run on public auto insurance systems have much to benefit from by taking active steps to reduce accidents and encourage on road safety. In turn, this leads to lower premiums, more stable rates, surpluses being returned to the public, and more reserves being invested into public institutions in Canada.
Public Auto Insurance has established an increasing prevalence in politics dating as far back as 1990, when Bob Rae won a provincial election for Ontario on the promise of implementing public car insurance in Canada. These days, public auto insurance is regularly discussed and slowly on the rise on a more widespread level.