I help set rates for a Major Canadian Insurance Company! Some thoughts . . .

[invictus43]

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I am not a child. Do not insinuate that. I do not rant like one either. I put forward rational thought with facts to back it up.

Insurance is hardly regulated. More control's need to be instilled to stop "bait and switches" and other dirty tactics.

Nites

I wasn't calling you specifically a child. But honestly, do some of your own research on the insurance business. This guy comes here and lays it out, like a text book, and people still don't understand. If the topic is too difficult to understand, then fine, just say we're getting ripped off and ignorance is happiness. If you REALLY care and want to learn, and not just rant, check what the minimum required insurance coverage is for different jurisdictions. Check out maximum litigation awards in accident cases. Check out insurance fraud.

Insurance in Ontario is VERY transparent and highly regulated by the government. Oil companies certainly don't have to check with the government before they raise prices.

Just as an example, and I've used it before, in California, where insurance is less than here, they have a minimum liability coverage of $15,000. Ours is $200,000. Think about that..if your wife/husband is killed in a car accident in California, the most your insurance is going to pay out is $15k. I'm not tugging at heart strings here..it's just basic facts. If you want more, you have to sue. As you can imagine, their civil case load from auto accidents is much higher than ours..which means EVERYONE pays for the cost of those lawsuits. Which system is better? THOSE are the questions you have to ask.

I'm not saying our insurance system is the best system..but don't dump on insurance companies for trying to make a relatively low 7% on their service within the framework of our current regulations.

 

[VifferFun]

They are also able to subsidize the premiums with tax dollars.

Very good point, Avi! I failed to mention that.

 

[VifferFun]

I skimmed your posts a bit, but the reason why I asked this is because last year my brother canceled his insurance with statefarm in january.

There was no cancellation fee for statefarm and they actually sent him a check with some money saying 'We only charge x amount for nov-dec'. I assumed because the extra dollars were added on those months to pay for the summer months up until june when he would've had to renew.

With being said, what I meant was that I wouldn't want to cancel my insurance completely in the winter months. I would just like collision removed. I think for me it's $50/month extra for collision on top of comprehensive.

But thanks for the explanation I got what you mean. That the winter months are going to make up for the high amount for summer months.

Even if they had the policy for 8 months I'd assume it would be high, almost close to what I would pay for the entire year.

Liability, Accident Benefits, AND Collision all earn at the same rate over the rate, and are mostly earned over the Spring/Summer months as mentioned. Sorry . . . before I was only talking about Liability and AB.

Cheers!

 

[VifferFun]

Insurance in Ontario is VERY transparent and highly regulated by the government. Oil companies certainly don't have to check with the government before they raise prices.

Just as an example, and I've used it before, in California, where insurance is less than here, they have a minimum liability coverage of $15,000. Ours is $200,000. Think about that..if your wife/husband is killed in a car accident in California, the most your insurance is going to pay out is $15k. I'm not tugging at heart strings here..it's just basic facts. If you want more, you have to sue. As you can imagine, their civil case load from auto accidents is much higher than ours..which means EVERYONE pays for the cost of those lawsuits. Which system is better? THOSE are the questions you have to ask.

I'm not saying our insurance system is the best system..but don't dump on insurance companies for trying to make a relatively low 7% on their service within the framework of our current regulations.

That is very well stated, and a good example. I think people in Ontario have much more adequate coverage than our friends in the United States do. Even though the Ontario minimum liability coverage is $200,000, I have never heard of a company who regularly quotes for any limit less than $1M. You could get less than $1M coverage by request, but you would likely have to sign a waiver or something which declares that you understand the consequences of such a foolish decision. I would say that over 90% of Ontarians have over $1M coverage, and VERY VERY few would have coverage below $500K.

Cheers!

 

[NiteshadeTA]

"Bait and Switches"????

Have you ever applied for insurance and been given something other than what you thought you were buying? ie. you went in for insurance and came out with a snowblower? I'm not following you with the whole bait and switch thing.

Bait and switch:

IE:

Mr. Avi we can insure your bike for 10 dollars a month
<you sign up>
<month goes by>
<telephone call>
Mr. Avi, turns out you didnt tell us some piece of information and we have had to increase your premiums to $XXXX.00/month
<Avi> - "no. I won't pay it"
<insurance company>-"But you signed a contract, you have it pay it"

You get the idea. My buddy is fighting one of these bait and switches right now.

Nites

 

[Avi Singh]

Bait and switch:

IE:

Mr. Avi we can insure your bike for 10 dollars a month
<you sign up>
<month goes by>
<telephone call>
Mr. Avi, turns out you didnt tell us some piece of information and we have had to increase your premiums to $XXXX.00/month
<Avi> - "no. I won't pay it"
<insurance company>-"But you signed a contract, you have it pay it"

You get the idea. My buddy is fighting one of these bait and switches right now.

Nites

Hardly a bait and switch. He applied for insurance, he got insurance. That he didn't give all of the information he was required to give is not really the insurance company's fault is it? They asked for the facts, he didn't give them.

If he want's out of the deal tell him to request that his policy be cancelled based on the premium he was quoted. Most companies will cancel it without penalty (so long as he states that in his cancellation letter and also asks for it to be cancelled penalty free).

 

[VifferFun]

Bait and switch:

IE:

Mr. Avi we can insure your bike for 10 dollars a month
<you sign up>
<month goes by>
<telephone call>
Mr. Avi, turns out you didnt tell us some piece of information and we have had to increase your premiums to $XXXX.00/month
<Avi> - "no. I won't pay it"
<insurance company>-"But you signed a contract, you have it pay it"

You get the idea. My buddy is fighting one of these bait and switches right now.

Nites

What was the missing piece of information if you don't mind my asking? Was your friend trying to hide something in his insurance application such as a conviction or accident?

Cheers!

 

[farmerjoe]

I vote sticky... and for removal of a whole bunch of frivolous cr*p (thanks to previously, but unfortunately not-any-more banned posters) after page 3.

 

[Charly]

There are 5 main elements of any contract and 3 elements that are unique to insurance contracts.

The fifth section, section C, outlines when an original insurance contract can be voided by the insurer.

1. Agreement - For an agreement to exsist there must be:
a) an offer made
b) an unconditional acceptance of the terms of that offer

2. Consideration - An exchange of something of value between the parties, in this case the premium.

3. Legailty of Object - A contract intended for a purpose which is contrary to the public good is not enforceable at law. (Essentially indicates that the object of the contract is legal.)

4. Legal Capacity of the Parties to Contract - Law will enforce only those contracts of persons it recognized as competent or having legal capacity.

5. Geniune Intention - To prove genuine intention it must be shown that the agreement between the parties was not affected by:

a) Fraud
b) Duress
c) Concealment (When people misrepresent past or present facts or fail to disclose pertinent facts, they are guily of concealment. If concealment is committed in an insurance contract, it is usually done so by the applicant and may be sufficient grounds to void the contract.
d) Mistake (Documents signed in error.)

Unique Elements

1) Insurable Interest - outlines all parties who may have interest in the item being insured. Example Mortgage companies

2) Utmost Good Faith - Both parties agree to deal with each other in utmost good faith. In simple terms, the complete honesty of the parties is viewed as critical to the contract.

3) Indemnity - People receive the actual amount of their loss, no more, no less.


There is no bait and switch with any insurance company, just people who sometimes do not tell the complete truth in an attempt to lower their rates.

 

[mat2312]

Direct Compensation Property Damage (also known as DCPD) is mandatory in the province of Ontario. This covers damage to your vehicle in the event that you are in a not-at-fault accident. Even if you don't have collision coverage, as long as the accident is not your fault, your bike will be repaired free of charge by your insurer (and free of any deductible payment because the deductible is $0).

Why do I have to pay for someone's negligence if they damage my vehicle. Shouldn't this come out of the other person's insurance company?

Loss or Damage . . . I think this is for coverage of a rental car in the event of an accident, but I am not 100% sure without looking it up. As far as I know, it is not mandatory, but the premium should be small.

If this was clearly explained, I'm sure many people would opt out of this unless the premium was miniscule, it's simply not worth paying $200+/year in the event you may have to rent a vehicle



Family Protection is also known as OPCF44 and I don't think it is mandatory, but am not 100% sure. The premium for this coverage is small anyways. OPCF44 provides coverage for you and your family from the actions of an at-fault, underinsured driver. If you are travelling in a province or a state where the mandatory liability coverage is low, Family Protection coverage ensures that you and your family are covered if you are injured in an accident up to your own policy's limits regardless of the other person's coverage levels.


Again, why am I paying for someone else's mistakes?

 

[mat2312]

Some random thoughts:



Insuring multiple bikes: There is no reason why insurance companies can't allow people to limit who can drive their vehicles. Insurance companies will allow people to sign a waiver preventing their children from driving. In my household, I had to sign a waiver not allowing my brother to drive my car.

I understand insurance is on the vehicle BUT it is my contract with the insurance company. We should be able to dictate our own terms to meet the government-mandated insurance requirements for ME!!! There has to be another alternative. Maybe a dashboard sticker that says

"THIS VEHICLE IS INSURED FOR *DRIVER NAME* ONLY, YOU ARE NOT LEGALLY INSURED IF YOU ARE OPERATING THIS VEHICLE WITHOUT YOUR OWN VALID INSURANCE"


To say a lawyer would eat that contract up is simply untrue. Couldn't I sue the insurance company if my brother uses my car because it's such a clear cut case for a good lawyer???


Liablity minimums your statistic about BC injuries taking 13 times less time to heal is just staggering. But the insurance industry (and government) only have themselves to blame. If there was reduced liability minimums, people would not take full advantage when there is an accident. Victims, Doctors, Rehab specialists, Auto Body repairment all know that the insurance companies are rolling in money with huge profits. In provinces with provincially run insurance programs there is LESS fraud.

If they know they'll have to sue and actually PROVE in court that they need additional money then they are less likely to pursue it under false pretences. I worked a short while in a rehabilitation clinic and let me tell you, MVAs were treated like gold mines.

I would GLADLY take a 200K liability. The odds of being completely at fault and causing a 200K+ payout is probably on par with winning the lottery.



I do have a couple questions for you however.


What are the odds of getting into an at-fault MVA in Ontario where the liability payout EXCEEDS $200 000?


and


What is the average payout for an at-fault MVA in Ontario and what are the odds of getting into an ordinary at-fault MVA?


odds calculated against the total amount of drivers in ontario



Thank you for your time! I know it can't be easy working for an industry that has much animosity towards it, I appreciate your attempts to explain the other side.

 

[VifferFun]

Direct Compensation Property Damage (also known as DCPD) is mandatory in the province of Ontario. This covers damage to your vehicle in the event that you are in a not-at-fault accident. Even if you don't have collision coverage, as long as the accident is not your fault, your bike will be repaired free of charge by your insurer (and free of any deductible payment because the deductible is $0).

Why do I have to pay for someone's negligence if they damage my vehicle. Shouldn't this come out of the other person's insurance company?

Loss or Damage . . . I think this is for coverage of a rental car in the event of an accident, but I am not 100% sure without looking it up. As far as I know, it is not mandatory, but the premium should be small.

If this was clearly explained, I'm sure many people would opt out of this unless the premium was miniscule, it's simply not worth paying $200+/year in the event you may have to rent a vehicle



Family Protection is also known as OPCF44 and I don't think it is mandatory, but am not 100% sure. The premium for this coverage is small anyways. OPCF44 provides coverage for you and your family from the actions of an at-fault, underinsured driver. If you are travelling in a province or a state where the mandatory liability coverage is low, Family Protection coverage ensures that you and your family are covered if you are injured in an accident up to your own policy's limits regardless of the other person's coverage levels.


Again, why am I paying for someone else's mistakes?

Ontario has what we call a "no-fault" insurance system. This means that in the event of an accident, your own insurance company pays for the damages to your vehicle (and your physical self) in the event of an accident, regardless of who is at fault. The purpose of this no-fault system is to remove the small physical damage claims from the courtrooms (costly and a waste of time), and it succeeds at that. If a person is severely injured as a result of an accident that was not their fault, then their own insurance company would pay and then take the other insurance company to court to recoup on costs. This is a very confusing insurance system to explain. Even though it is called "no-fault" insurance, a driver is still deemed to be at fault when it comes to their driving record.

I am likely wrong on the "Loss or Damage" coverage if this is costing you $200/year. More likely, this is referring to Property Damage or Direct Compensation Property Damage. Rental premium is very small.

Cheers!

 

[VifferFun]

Some random thoughts:



Insuring multiple bikes: There is no reason why insurance companies can't allow people to limit who can drive their vehicles. Insurance companies will allow people to sign a waiver preventing their children from driving. In my household, I had to sign a waiver not allowing my brother to drive my car.

I understand insurance is on the vehicle BUT it is my contract with the insurance company. We should be able to dictate our own terms to meet the government-mandated insurance requirements for ME!!! There has to be another alternative. Maybe a dashboard sticker that says

"THIS VEHICLE IS INSURED FOR *DRIVER NAME* ONLY, YOU ARE NOT LEGALLY INSURED IF YOU ARE OPERATING THIS VEHICLE WITHOUT YOUR OWN VALID INSURANCE"


To say a lawyer would eat that contract up is simply untrue. Couldn't I sue the insurance company if my brother uses my car because it's such a clear cut case for a good lawyer???


Liablity minimums your statistic about BC injuries taking 13 times less time to heal is just staggering. But the insurance industry (and government) only have themselves to blame. If there was reduced liability minimums, people would not take full advantage when there is an accident. Victims, Doctors, Rehab specialists, Auto Body repairment all know that the insurance companies are rolling in money with huge profits. In provinces with provincially run insurance programs there is LESS fraud.

If they know they'll have to sue and actually PROVE in court that they need additional money then they are less likely to pursue it under false pretences. I worked a short while in a rehabilitation clinic and let me tell you, MVAs were treated like gold mines.

I would GLADLY take a 200K liability.



I do have a couple questions for you however.


What are the odds of getting into an at-fault MVA in Ontario where the liability payout EXCEEDS $200 000?


and


What is the average payout for an at-fault MVA in Ontario and what are the odds of getting into an ordinary at-fault MVA?


odds calculated against the total amount of drivers in ontario



Thank you for your time! I know it can't be easy working for an industry that has much animosity towards it, I appreciate your attempts to explain the other side.

I'm not arguing with you on the multi-bike issue, because there is nothing wrong with your argument I am still investigating to find out the real reason why we don't offer larger discounts for a single rider with multiple bikes. Honestly, I am pretty sure it will come down to the fact that it isn't worth the headache of filing for approval with FSCO for very little financial benefit to the company.

Your stance on the liability minimums is interesting, but I think that damages exceed $200,000 more than you would think. How much would you want to be paid if you lost the ability to walk? I don't think $200K would make you happy. What if you required constant medical care for the rest of your life? That costs a pretty penny too. What about the children that you are no longer able to support because you can't work anymore due to an accident? That comes from insurance too. What about the case where you hit a car carrying four passengers? I can go on. $200K liability coverage is not enough in my opinion. Your argument that higher limits result in higher payments is interesting, and I'm not going to say you are wrong because I honestly have no idea whether or not this cause-and-effect relationship holds true. You are correct about the MVAs seen as a goldmine in the medical field. These fraudulent acts are part of the forcing that will drive rates up.

At my company alone, we don't even consider a loss "large" until it has exceeded the $200K barrier, and our file of large losses is not small. I have seen a couple close to the $5M mark (which is possible because liability payouts are limited on your policy, but not Accident Benefits).

I'm sorry, but I don't have industry statistics that I am able to cite at this moment. I can try and look into that sometime in the near future if you are really interested. I can assure you, however, that whenever Bodily Injury claims are involved in a MVA, it doesn't take much to get over the $200K mark. You might not think a $200K+ claim will happen to you, but I'm sure that no one in that situation expected it; it's up to you, but that's not a lottery that I want to play!

Cheers!

 

[VifferFun]

Are people REALLY this IDIOTIC ? They are paying 3-4 thousand for insurance and see nothing wrong ?


I liked the FREEBIE over the winter months quote. BLOW ME !

VideoSilva, I have been nothing but kind to you in my posts, regardless of your lack of appreciation. You are entitled to your opinion on this issue, but please refrain from such lewd comments. This thread is to remain civil.

What I said about the "freebie" winter months is completely true. Take the time to read my explanation and it should be clear. . . it's not that difficult of a concept to understand.

It sounds like you want to purchase a product for half of its actual cost. Will a Suzuki dealer sell you a GSXR-1000 for $5000 brand new, and if not, are they an evil company for refusing to do so? Perhaps we should start a petition against Suzuki because they will not lose money so that we can have fun?

If you think there is so much profit to be made and that insurance companies are price gouging, then get a group of investors together and start your very own motorcycle insurance company. Charge $500 to everyone who walks through your door and allow a full 50% refund for winter cancellations and we will see how rich you and your investment buddies are within a couple of weeks of business . . .

Cheers!

 

[videosilva]

VideoSilva, I have been nothing but kind to you in my posts, regardless of your lack of appreciation. You are entitled to your opinion on this issue, but please refrain from such lewd comments. This thread is to remain civil.

What I said about the "freebie" winter months is completely true. Take the time to read my explanation and it should be clear. . . it's not that difficult of a concept to understand.

It sounds like you want to purchase a product for half of its actual cost. Will a Suzuki dealer sell you a GSXR-1000 for $5000 brand new, and if not, are they an evil company for refusing to do so? Perhaps we should start a petition against Suzuki because they will not lose money so that we can have fun?

If you think there is so much profit to be made and that insurance companies are price gouging, then get a group of investors together and start your very own motorcycle insurance company. Charge $500 to everyone who walks through your door and allow a full 50% refund for winter cancellations and we will see how rich you and your investment buddies are within a couple of weeks of business . . .

Cheers!

LOLOLO everyone reading this should feel much better knowing your paying 2000.00 or more for 6 months of isurance. Acording to our friend you are not being charged for the other 6 or so months.

What a DEAL !! Corruption really does go along way and WHY is there ALWAYS some one defending it ??

 

[VifferFun]

LOLOLO everyone reading this should feel much better knowing your paying 2000.00 or more for 6 months of isurance. Acording to our friend you are not being charged for the other 6 or so months.

What a DEAL !! Corruption really does go along way and WHY is there ALWAYS some one defending it ??

Carefully READ my winter cancellation explanation before ranting. To rephrase it yet again, which situation would you rather have?

SCENARIO A:
Pay $4000/yr with the ability to cancel in the winter and get 50% of your annual premium back

SCENARIO B:
Pay $2000/yr without the ability to cancel in the winter.

I'm sure that if you really want to go with Scenario A, your insurer will gladly hook you up. Why aren't you rushing out and starting your own insurance company if there is so much opportunity for a competitive advantage?

Cheers!

 

[videosilva]

JAN -- $0
FEB -- $0
MAR -- $60
APR -- $120
MAY -- $120
JUN -- $240
JUL -- $240
AUG -- $240
SEP -- $120
OCT -- $60
NOV -- $0
DEC -- $0

Hopefully this should clear up any remaining confusion. The benefit of paying annually rather than monthly is that you get to ride in all of the summer months, but you get the winter months as freebies.

Cheers!


How the **** do you guys come up with those numbers and tell people that is fair or right ? How the **** can you insure anyone for FREE ??



I'm feel like PUKING the more I read this. Come on there are people reading this in the background that know this is WRONG say some thing @!@!@!

 

[VifferFun]

I welcome any other questions that you guys might have

 

[VifferFun]

JAN -- $0
FEB -- $0
MAR -- $60
APR -- $120
MAY -- $120
JUN -- $240
JUL -- $240
AUG -- $240
SEP -- $120
OCT -- $60
NOV -- $0
DEC -- $0

Hopefully this should clear up any remaining confusion. The benefit of paying annually rather than monthly is that you get to ride in all of the summer months, but you get the winter months as freebies.

Cheers!


How the **** do you guys come up with those numbers and tell people that is fair or right ? How the **** can you insure anyone for FREE ??



I'm feel like PUKING the more I read this. Come on there are people reading this in the background that know this is WRONG say some thing @!@!@!

My illustration was to show the normal distribution of the allocation of premium (and hence the allocation of early-cancellation refunds). We wouldn't allow someone to be insured exclusively for the winter months and charge them $0 of course, but this example shows that we don't earn any premium over the winter months because there is nearly NO risk exposure.

I apologize, but I'm afraid I finished with explaining this to you. If you can't understand the concept with the many different explanation approaches I have taken (and other members as well), then I'm afraid you are either incapable of understanding or simply refuse to understand. My guess is the latter.

FYI, using profanity, even if it is masked by asterisks, does not lend credibility to your "argument." I think everyone else seems to understand my simple explanations.

Cheers!

 

[Wind]v[ill]

Ah man... I wasn't going to say anything but, I must bow down to Sir. Videosilva for his infinite wisdom.

Sir-Mister-Awesome-and-Einstein-like Videosilva, you speak of words that are far beyond any one's comprehension in this century. It may take us lesser beings another few hundreds years to understand you.

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