Manitoba Public Insurance (MPI) and the Insurance Brokers Association of Manitoba (IBAM) have finally come to an agreement over how the online sale and renewal of basic auto insurance should be handled – and what role brokers play in this new system.
MPI had initially proposed the idea of selling auto insurance online in 2019, but it was slammed by IBAM, which claimed that moving insurance sales online would sideline its broker members from the auto insurance purchasing process. Both groups continued to lock horns over the plan until recently, when they finally reached a new deal that permits brokers to handle both in-person and online transactions.
The new deal takes effect April 2021. In addition to allowing brokers into the online auto insurance process, MPI noted that it expects to permit additional online transactions by April 2023. A spokesperson confirmed with CBC News that online renewal will be generally offered to all passenger vehicle owners, except those with a history of defaulting on payments.
Once the deal is in effect, the insuring of new vehicles will still have to be accomplished at either a brokerage or MPI service centre – but some renewals and reassessments could be conducted online. Customers can log into their accounts and be referred to their previous broker, or select an option to reach out to brokers near their area.
The deal also changes the way compensation works for brokers. Under the agreement, brokers will receive more for in-person transactions of basic insurance (4.2%) than for online transactions (2.3%).
“The fair compensation that has been agreed will differentiate commissions to brokers when customers choose to go online instead of in-person,” said MPI chief operating officer Curtis Wennberg in a statement. “That said, customers will be free to choose any method of interaction as they see fit.”
According to IBAM CEO Grant Wainikka, the Manitoba government mandated an end to the dispute by bringing in a conciliator, which worked.
“Rewind two years … we were not on friendly terms with MPI, but I think that we were able to see areas of commonality,” Wainikka told CBC News, adding that they were able to come up with a deal that “both sides can live with.”
Citing research conducted by IBAM and other entities, Wainikka said that most consumers do not have a solid understanding of concepts such as insurable value, third-party liability, vehicle classification, personal injury protection plan limits, and so on.
“These need to be discussed with a professional so that people can understand their own risks and their own liabilities and the coverages that they might require,” the association leader commented.
