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

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So how much do Insurance Companies spend on claim fraud prevention, detection and education ? Instead of just writing off, and paying out, why don't they investigate a little more, and maybe say 'NO!' to some the ridiculous claims that come in.. Then the rest of us, honest premium paying clients, wouldn't have such a huge price to pay.
 
sunshine said:
What are you gonna do?!? If you wanna ride/drive then you gotta get insurance...that's just the way it is.
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I agree..but disagree. I believe a lot of what we pay is a result of the system. Much like my benefits at work. I think people take advantage of things like lost work days. You know, they have it, they're forced to pay for it and they take more than they probably would if they were paying out of their pocket of their own accord. I can't tell you how many people at my workplace get new eyeglasses every year, at $400 a pop, because they're covered by our benefits plan. The first question my dentist asks is, how much are you covered for? Part of the reason why BC's insurance is cheaper is because their coverage for medical is lower than ours. That's something we can change. But you'll only get 5 days off work after your accident rather than 15 for "back pain".
 
invictus43 said:
I agree..but disagree. I believe a lot of what we pay is a result of the system. Much like my benefits at work. I think people take advantage of things like lost work days. You know, they have it, they're forced to pay for it and they take more than they probably would if they were paying out of their pocket of their own accord. I can't tell you how many people at my workplace get new eyeglasses every year, at $400 a pop, because they're covered by our benefits plan. The first question my dentist asks is, how much are you covered for? Part of the reason why BC's insurance is cheaper is because their coverage for medical is lower than ours. That's something we can change. But you'll only get 5 days off work after your accident rather than 15 for "back pain".
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Regarding insurance fraud and its implications on the Insurance Industry, the following article is a good read:

http://en.epochtimes.com/news/6-9-11/45993.html

I have included an excerpt below:

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Is insurance fraud really a problem?

Any fraud is a problem if the cost is passed onto the policyholders.

Do insurers combat fraud effectively?

The Insurance Corporation of British Columbia, a public insurer, is frequently in court charging and convicting individuals with insurance crimes or announcing the break-up of another fraud ring. Very little is heard from private insurers in Ontario and Quebec, where fraud is said to be the highest. Although the types of fraud activities have changed very little in the past several decades, private insurers have arrived at few effective solutions because they lag behind other industries in their use of technology and the sharing of information. To their credit, they have mounted an aggressive stand against auto theft which costs insurers over a billion dollars annually. However, car theft is not classified wholly as insurance fraud per se as it is the innocent victim of the crime (policyholder) and not the thief, who usually makes the claim.
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As I mentioned before, the purpose of my thread is to help answer your insurance questions and not to defend the industry. You guys are right . . . I think the private insurance companies could do a much better job of fraud detection in Ontario; however, this detection process isn’t very simple in the “pain and suffering” cases. The BC government can take an aggressive stance on the issue because it is a monopolized market and the people have no choice but to insure with ICBC. In the private industry, it is a little different. If were to deny “or reduce” someone’s pain-and-suffering claims or frequently take people to court, what would that do to the image of our company? Would you want to be insured by a company that has a reputation of taking people to court over every pain-and-suffering claim?

Cheers!
 
VifferFun said:
As I mentioned before, the purpose of my thread is to help answer your insurance questions and not to defend the industry. You guys are right . . . I think the private insurance companies could do a much better job of fraud detection in Ontario; however, this detection process isn’t very simple in the “pain and suffering” cases. The BC government can take an aggressive stance on the issue because it is a monopolized market and the people have no choice but to insure with ICBC. In the private industry, it is a little different. If were to deny “or reduce” someone’s pain-and-suffering claims or frequently take people to court, what would that do to the image of our company? Would you want to be insured by a company that has a reputation of taking people to court over every pain-and-suffering claim?

Cheers!
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Well put. As I say, we pay a lot and we get a lot. We, collectively, make our premiums rise by taking full advantage of what's offered to us. I would like a different system but that requires political change. Just like my benefits. Frankly, I'd rather have the $5k, or whatever it costs my employer for my benefits, in my pocket than paying for glasses for my co-workers 9 kids. Everyone has to ask themselves if they're prepared to give up those extra 10 days off though. If you get in an accident, are you willing to cap your paid days off at, say 5? Everyone's got a lot of big talk until they're hit by a car and have to take a month off work and only 5 days are paid for. Then what?
 
invictus43 said:
Well put. As I say, we pay a lot and we get a lot. We, collectively, make our premiums rise by taking full advantage of what's offered to us. I would like a different system but that requires political change. Just like my benefits. Frankly, I'd rather have the $5k, or whatever it costs my employer for my benefits, in my pocket than paying for glasses for my co-workers 9 kids. Everyone has to ask themselves if they're prepared to give up those extra 10 days off though. If you get in an accident, are you willing to cap your paid days off at, say 5? Everyone's got a lot of big talk until they're hit by a car and have to take a month off work and only 5 days are paid for. Then what?
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Your benefits don't cost as much as you think. $1800/yr is on the high end... and that would get a solid plan for most employers. The benefits don't just cover eyeglasses and dentist visits. Imagine though if someone's kid broke a few teeth in an accident? Most employer plans cover that. Or if you needed prescription drugs for cancer? $1800 spread out over a year and taxed would likely not be used for it's intended purpose. Most employer plans also have a life insurance component, a critical illness component, a short term and long term disability component as well - all of which are worth a great deal more than the premium.
 
Avi Singh said:
Your benefits don't cost as much as you think. $1800/yr is on the high end... and that would get a solid plan for most employers. The benefits don't just cover eyeglasses and dentist visits. Imagine though if someone's kid broke a few teeth in an accident? Most employer plans cover that. Or if you needed prescription drugs for cancer? $1800 spread out over a year and taxed would likely not be used for it's intended purpose. Most employer plans also have a life insurance component, a critical illness component, a short term and long term disability component as well - all of which are worth a great deal more than the premium.
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I understand how insurance works Avi!! I'm not stupid. (I know how you feel Niteshade!! :-D) And I would prefer to opt out. And define "intended purpose"?? I believe I should be able to make my own decisions about where my money goes and what coverage I want. We never see that money being deducted and if people did, maybe they wouldn't be so frivolous with their claims. $1000 for massages?!?! Gimme a break.. There's a whole growth industry revolving around services people don't really need but use anyway because their benefits plan is covering it..and the cost of the plans keeps going up as a result. Why do you think the chiropractic industry was so opposed to their services being delisted??
 
Vitterfun, thanks for posting that information regarding percentages it was VERY informative!!!


so just to be clear with the numbers,


I have approx. a 3 in 10000 chance (using the probability figures you gave me) of having a claim OVER $200K claim?
 
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mat2312 said:
I have approx. a 3 in 10000 chance of having a claim OVER $200K strictly liability?
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I suspect it's rather lower than that if you're insuring a bike and you don't take passengers..
 
invictus43 said:
I suspect it's rather lower than that if you're insuring a bike and you don't take passengers..
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Can you see what I'm trying to get at? I don't think it makes financial sense to have insurance past the 200K minimum for a motorcycle especially

a 3 in 10000 chance is VERY slim. If it were 1 in 100 fine. The talk like "well what if....." honestly if that happened to me I'd feel unlucky and know that it was just meant to be.
 
Vitterfun, do Insurance companies have to write you at 200K if you ask? I'm not talking about facility insurance which I know they're obligated under.


Say for example I wanted to get 200K liability + collision on my bike?


I just don't see it being fair that the government mandates a minimum yet no company will sell you the minimum just the larger 'size'

That'd be like the government saying you MUST buy at least one 500mL bottle of water a day but the only size stores carry are 2L and up. I don't want 2L of water!! I want my 500mL dammit ;p
 
Crazy

Motorcycle Insurance


Liability

When purchasing liability insurance it may include some of the following
1) Passenger liability - This will provide protection for any injuries and damages that occur to the passenger of your motorcycle. This is usually overlooked or dropped, especially when someone is trying to receive a low premium. It, however, is very, very important! If you are responsible for an accident, you will be financially responsible for all injuries to your passenger. So purchase this insurance and protect yourself!!
2) Uninsured Motorists - This will protect you if you are in an accident with a motorist than doesn't have insurance. Remember, you can still sue this person for damages, but if they didn't have enough money to pay for insurance, then they probably won't have enough money to pay for your injuries!
3) Liability - This is the same as auto insurance liability. It covers you for any injuries and damages caused by you on your motorcycle to others, up to a maximum amount as outlined in your policy. Any damages above this maximum, remember you are responsible for.
Collision and Comprehensive Coverage

This is the same as auto insurance. Collision will pay for your bike to get repaired, and Comprehensive will cover theft and vandalism against your bike.
 
mat2312 said:
Vitterfun, thanks for posting that information regarding percentages it was VERY informative!!!

so just to be clear with the numbers,

I have approx. a 3 in 10000 chance (using the probability figures you gave me) of having a claim OVER $200K claim?
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No problem. Here are the probability figures again:

Probability of Bodily Injury claim exceeding $100K: 0.034%
Probability of Bodily Injury claim exceeding $200K: 0.016%
Probability of Bodily Injury claim exceeding $500K: 0.005%

Probability of Accident Benefits claim exceeding $100K: 0.031%
Probability of Accident Benefits claim exceeding $200K: 0.014%
Probability of Accident Benefits claim exceeding $500K: 0.005%

I think you were trying to add the 0.016% and 0.014% figures together, which is actually the probability that either one or both of BI and AB exceeds $200K. Some examples of this:

BI = $205,000 and AB = $5,000
BI = $5,000 and AB = $205,000
BI = $0 and AB = $500,000
etc.

I think you thought you were calculating the probability that the SUM of BI and AB losses exceeds $200K. Some examples of this:

BI = $100,000 and AB = $105,000
BI = $75,000 and AB = $180,000
And also any of the examples above . . .
BI = $205,000 and AB = $5,000
BI = $5,000 and AB = $205,000
BI = $0 and AB = $500,000

This probability would be much higher than 3 in 10,000 but unfortunately I can't calculate the probability with this data alone.

Cheers!
 
invictus43 said:
I suspect it's rather lower than that if you're insuring a bike and you don't take passengers..
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Just because a bike is small, it doesn't mean it isn't dangerous to other people. If some idiot biker does a stupid move on the 401 causing a car to swerve into a semi . . . well, you get the picture.
 
mat2312 said:
Can you see what I'm trying to get at? I don't think it makes financial sense to have insurance past the 200K minimum for a motorcycle especially

a 3 in 10000 chance is VERY slim. If it were 1 in 100 fine. The talk like "well what if....." honestly if that happened to me I'd feel unlucky and know that it was just meant to be.
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I just explained that the chances of the sum of BI and AB exceeding $200K is greater than you think. Assuming, however, that the probability is indeed 3 in 10,000 as a conservative estimate, this isn't a lottery I would want to play. Remember that this is an ANNUAL probability, so your chance in 30 years of riding is actually 90 in 10,000, which is close to the 1 in 100 figure you are talking about!

Cheers!
 
mat2312 said:
Vitterfun, do Insurance companies have to write you at 200K if you ask? I'm not talking about facility insurance which I know they're obligated under.

Say for example I wanted to get 200K liability + collision on my bike?


I just don't see it being fair that the government mandates a minimum yet no company will sell you the minimum just the larger 'size'

That'd be like the government saying you MUST buy at least one 500mL bottle of water a day but the only size stores carry are 2L and up. I don't want 2L of water!! I want my 500mL dammit ;p
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I believe that most companies will sell you the $200K limit if you request it, but they might have you sign a waiver stating that you understand the consequences. It's kind of like a product that is priced, but rarely quoted and sold because no one requests it and brokers quote the $1M limit by default.

I highly recommend against this. You premium will not be reduced by a REALLY huge amount (if that is what you are thinking) because the limit does not affect your AB premium (which is also a large part of your premium).

Cheers!
 
VifferFun said:
I believe that most companies will sell you the $200K limit if you request it, but they might have you sign a waiver stating that you understand the consequences. It's kind of like a product that is priced, but rarely quoted and sold because no one requests it and brokers quote the $1M limit by default.

I highly recommend against this. You premium will not be reduced by a REALLY huge amount (if that is what you are thinking) because the limit does not affect your AB premium (which is also a large part of your premium).

Cheers!
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FYI Jevco offers a flat rate reduction to drop from 1M liability to 200k - The savings - $22/yr! Not worth it at all.
 
VifferFun said:
Just because a bike is small, it doesn't mean it isn't dangerous to other people. If some idiot biker does a stupid move on the 401 causing a car to swerve into a semi . . . well, you get the picture.
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That's true..but I suspect it's still lower. :-D
 
invictus43 said:
That's true..but I suspect it's still lower. :-D
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It may or may not be lower . . . without the data I wouldn't make a statement.

However, not all bikers are "good drivers". I've seen an idiot pull a catwalk down the 401 in fairly busy traffic. What if he had wiped out . . . what would happen? Would all of the cars behind just drive over his body and go along their merry way, or swerve to miss and cause all hell to break loose?

Cheers!
 
Avi Singh said:
FYI Jevco offers a flat rate reduction to drop from 1M liability to 200k - The savings - $22/yr! Not worth it at all.
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Just don't do it guys . . . it's not worth the $22/yr. Avi's a broker and I work in the industry, so if you don't understand then just believe us. Going with $200K liability when people who know what they are talking about tell you otherwise is like the beginner riders who buy a Gixxer when experienced riders tell them "no" . . .

Cheers!
 
VifferFun said:
Just don't do it guys . . . it's not worth the $22/yr. Avi's a broker and I work in the industry, so if you don't understand then just believe us. Going with $200K liability when people who know what they are talking about tell you otherwise is like the beginner riders who buy a Gixxer when experienced riders tell them "no" . . .

Cheers!
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Of course it's not worth it... to YOUR profit margin. Talk 100,000 policy holders into paying $22 more a year and that's 2.2 million more in YOUR pocket. LOL at "if you don't understand, then just believe us", you sound like a politician... and they never lie!:rolleyes:
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