SGI Proposes 7.6% Insurance Rate Hike Citing Rising Car Repair Costs
Saskatchewan Government Insurance (SGI) is pointing to computerized car parts and inflation as the driving forces behind a proposed 7.6 per cent rate increase for auto insurance over the next two years. The Crown corporation, which operates on a not-for-profit basis, states that the escalating costs of vehicle repairs have created a financial shortfall in the Saskatchewan Auto Fund.
Inflation and Advanced Technology Fuel Cost Surge
Chris McCulloch, SGI's vice-president of corporate actuary, explained that inflation has significantly increased the prices of materials and labor required for vehicle repairs. "Newer vehicles are equipped with advanced technology, sensors, and specialized materials, making even minor repairs substantially more expensive," McCulloch stated during a public consultation meeting in Regina.
The data supports this claim: the average cost for damage claims rose by 25 per cent, from $4,880 in 2019-20 to $6,101 in 2024-25, as reported earlier this year.
Phased Increase and Financial Implications
SGI has outlined a phased approach to the rate hike:
- An interim increase of 3.75 per cent is proposed to take effect on June 1, 2026, raising premiums by an average of $38 per year for most motorists.
- A subsequent increase of 3.75 per cent is planned for June 2027.
Combined, these increases would compound to 7.6 per cent, generating an estimated $85.5 million in additional revenue for the auto fund over two fiscal years. Insurance rates for motorcycles and taxis remain under review pending further consultation.
Public Consultation and Regulatory Review
The Saskatchewan Rate Review Panel, composed of government-appointed members, is tasked with evaluating SGI's rationale against public feedback and external consultant reviews. The public has until April 20, 2026, to submit comments through saskratereview.ca.
The panel will present its report to Jeremy Harrison, the minister responsible for SGI, on June 18, 2026, before a final decision on the rate increase is made.
NDP Critic Questions Past Rebates
Darcy Warrington, the Saskatchewan NDP critic for SGI, raised concerns about the timing of the proposed hike, questioning the corporation's previous rebates. During the COVID-19 pandemic, a decrease in collisions led to a surplus, prompting SGI to issue $374 million in rebates to customers.
"Did it need to be $374 million? Maybe it could have been $200 million. Then they would have had another $174 million kicking around. We need to find a balance," Warrington remarked after the public meeting. He suggested that more conservative rebates could have mitigated the need for current rate increases.
SGI executives, including Drew Kendel, executive vice-president and chief financial officer, defended the rebates as a response to the surplus at the time, emphasizing that the auto fund must remain solvent to cover basic universal coverage for vehicle damage and personal injuries.
