I help set rates for a Major Canadian Insurance Company! Some thoughts . . .
- Thread starter VifferFun
- Start date
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Yes, I did, but I didn't have a chance to post up a reply until now.
I spoke with the Auto product specialist, and he forwarded me a copy of an email from a year ago where he had discussed this issue with a Director. Anyways, it does come down to the whole cost/benefit issue. We are aware of at least one company in the industry that offers a 10% discount when there are more cars than drivers, but this certainly isn't the discount that people in this situation are hoping for.
Anyways, I spoke with my manager who is in charge of pricing for all of Ontario, and while he agreed, he was concerned about a lack of data. It is hard to find any statistics on households where there are more vehicles than drivers. You guys can help me out with this if you are able to find any data. My manager said that if I am able to come up with some good statistics to support the venture, then it could be proposed to be included in the rating algorithm.
I tried checking briefly, but most of the Canadian data that I found is old (from the mid-nineties) and the demographics would have changed a lot since then. If someone could find the percentage of Canadian households where there are more vehicles than drivers, that could help me out. Even if you could find some American data, that might help too.
Cheers!
I don't have the data that you are looking for but if you wanted to start a poll.....I insure 4 bikes and I am the only one in my house with a motorcycle license. I only ride one at a time but pay liability insurance on all 4.
You mentioned that the insurance companies are government regulated but I think that it must be a pretty loose leash in certain areas. It seems to me that increases and coverages may be watched but the "class" in which a bike is placed seems open to the individual companies.
Example:
M class - 27 years
No claims
2 street bikes and 1 dirtbike insured
1M Liability each
I purchased a 2001 Yamaha FZ1 and called to insure it with my insurance company. They inform me that it is a "sport bike" and give me the same quote that they gave me a week earlier on a 2003 GSX-R1000!
I decide that it is a high quote and I start calling around. I got 8 different quotes.........
I got prices throughout the range from $567 to $2830 for the same 2001 FZ1.
How can this be? It's the same bike and I'm the same driver! My insurance company came in at $980. Some classed it as a sport bike and others classed it as a sport "touring" bike. This does not seem to be regulated at all.
You mentioned that the insurance companies are government regulated but I think that it must be a pretty loose leash in certain areas. It seems to me that increases and coverages may be watched but the "class" in which a bike is placed seems open to the individual companies.
Example:
M class - 27 years
No claims
2 street bikes and 1 dirtbike insured
1M Liability each
I purchased a 2001 Yamaha FZ1 and called to insure it with my insurance company. They inform me that it is a "sport bike" and give me the same quote that they gave me a week earlier on a 2003 GSX-R1000!
I decide that it is a high quote and I start calling around. I got 8 different quotes.........
I got prices throughout the range from $567 to $2830 for the same 2001 FZ1.
How can this be? It's the same bike and I'm the same driver! My insurance company came in at $980. Some classed it as a sport bike and others classed it as a sport "touring" bike. This does not seem to be regulated at all.
Companies are allowed to put surcharges/discounts on certain types of vehicles as wthey see fit, and the government must approve of this. Most companies have a surcharge for the "Sport" class of motorcycle, and I believe Jevco's is 200% or so. I guess the definition of "Sport" is a little fuzzy from one company to the next.
Give State Farm a call if you are having trouble . . . they rate based on engine displacement (CCs) rather than the class of bike.
Cheers!
suprPHREAK
Well-known member
I have looked into US insurance, and teh cost difference seems to come down to as follows:
Liability:
MUCH lower in the USA. As a result, the insurance company pays out less. So they charge less. Of course, you wreck something beyond your $25,000 coverage (as in, a bike with a small visit to a hospital for a broken leg) and you are on the hook for much much much more money. In the USA, once your insurance is used up, they walk away. The victim now sues you for pain and suffering, and you are out millions. In Ontario, the victim cannot sue for such things, but as a result of this, the insurance company must keep paying out until the victim is back to their original status. It takes longer to use up $2M in Canada, than $25K in the USA.
Accident Benefits
No such thing in most states. If you are injured in a crash, and dont have this coverage, the bills are up to you. Being a private healthcare system, you won't be able to afford any of your recovery at all. Up here, the insurance companies pay a large amount out. On my policy, this is almost 60%.
If you were to tailor a US plan to be identical in every way to an Ontario plan, it actually adds up nearly the same. In most cases after that, they can be a little lower because they have 1-x the population to draw from.
Peggassus: Texas bike accident stats are LOWER because they never have to re-learn riding after months off of winter. That is why southern states are cheaper.
VifferFun: here is one for you: I have read that statistically, bike accident rates increase aove age 55, to a point that they are higher risk than a 16 year old newbie. If this is the case, then why do their rates continue to drop?
As well, a 16yo on a supersport, knowing the raping the insurance co will give them with a claim, will not usually make a claim, especially if they are not formally charged. A mature adult is more likely to actually claim damage from a small accident, charge or not. That being true, shouldnt the stats show that younger riders appear safer?
Liability:
MUCH lower in the USA. As a result, the insurance company pays out less. So they charge less. Of course, you wreck something beyond your $25,000 coverage (as in, a bike with a small visit to a hospital for a broken leg) and you are on the hook for much much much more money. In the USA, once your insurance is used up, they walk away. The victim now sues you for pain and suffering, and you are out millions. In Ontario, the victim cannot sue for such things, but as a result of this, the insurance company must keep paying out until the victim is back to their original status. It takes longer to use up $2M in Canada, than $25K in the USA.
Accident Benefits
No such thing in most states. If you are injured in a crash, and dont have this coverage, the bills are up to you. Being a private healthcare system, you won't be able to afford any of your recovery at all. Up here, the insurance companies pay a large amount out. On my policy, this is almost 60%.
If you were to tailor a US plan to be identical in every way to an Ontario plan, it actually adds up nearly the same. In most cases after that, they can be a little lower because they have 1-x the population to draw from.
Peggassus: Texas bike accident stats are LOWER because they never have to re-learn riding after months off of winter. That is why southern states are cheaper.
VifferFun: here is one for you: I have read that statistically, bike accident rates increase aove age 55, to a point that they are higher risk than a 16 year old newbie. If this is the case, then why do their rates continue to drop?
As well, a 16yo on a supersport, knowing the raping the insurance co will give them with a claim, will not usually make a claim, especially if they are not formally charged. A mature adult is more likely to actually claim damage from a small accident, charge or not. That being true, shouldnt the stats show that younger riders appear safer?
You raise some good points/questions.
First off, you might not see “Accident Benefits” coverage in many states because they might still be operating under the traditional “tort” system of insurance (i.e. the opposite of no-fault insurance). As a result, if you are in an accident in these states and are injured, your insurance company MUST sue the other insurance company to get any sort of Accident Benefits payments. In these States, the payments under Bodily Injury will be huge because they will be paying for both the injuries of the insured and the injuries of any third party.
You are correct about the increasing frequency of accident for drivers/riders over a certain age threshold, but it is not as severe as you would think. The driving experience tends to deteriorate around the age of 60-65, but the stats show that they never become as bad as a new 16-year-old driver/rider. Depending on the company, rates actually do increase once you reach a certain age threshold in order to match their premium with the historical experience of their group.
Your theory about a 16yo on a super-sport is interesting, and I agree with you if you are only speaking about Collision (i.e. physical damage) coverages. If a newbie drops his bike and is not injured and didn’t hit anyone else, there are less likely to claim than a more experienced rider. However, it is not the small $10,000 claims for the actual bike that drive up rates, but rather the large accident involving bodily injury and third party liability. If a newbie on a super-sport happens to injure himself or other, a claim will definitely be made. Or, even if the newbie isn’t hurt but damages someone else’s property, a claim must be made as well. In the end, it is pretty clear in the statistics that young drivers are definitely not “safer”.
Cheers!
Sorry, but I'm not following your example. What is "IE"?
Do you personally know someone who was denied a treatment plan, or is this a hypothetical situation?
You are correct that the system isn't perfect, and some money will be lost along the way in expenses and higher-than-warranted settlements; however, I would not say that they entire system is fundamentally flawed. It is not the insurance company's goal (nor would it be in their best interest) to try and take money away from those who deserve it. This is related back to the problem where I described how if one insurance company "got tough" on fighting excessive claims to try and reduce costs, they are just painted as the bad guy in the media.
Cheers!
and i completely disagre with you. Kingsway does all it can to prevent having to pay out. there are clients that have not recieved months of income replacement benefits. Kingsway also avoids recieving OCF's. even with registered mail, and fax reciepts they still claim not to have recieved them. They refuse to pay where it is OBVIOUSLY deserved.
If what you are telling me is true, then I agree with you that Kingsway is not a good insurance company to deal with. People seem to have the misconception that the level of service is equal for all insurance companies, but this is not true.
The good thing is that there are many other insurers out there, so it is your decision who you want to purchase insurance from.
Cheers!
If I remember correctly, State Farm did quite well on the FSCO "Claims Satisfaction Surveys" that I mentioned earlier. Kingsway did not do so well, which is likely attributable to the fact that they are a sub-standard risk insurer.
They are not the best according to people living in New Orleans. A quick google search with the key words Hurricane Katrina and State Farm will show that many homeowners still have not been paid, or have been denied.
true.
but many people are requesting coverage for sections they did not have in their agreement.
We also were talking local vehicle insurance.
That's a very good point. State Farm isn't the only company getting negative PR from the whole New Orleans ordeal. If people weren't covered for a peril, then the insurance company is not obligated to cover the loss (although the media would like you to think so).
Also a good point. Even though State Farm's parent is in the United States, their Canadian Head Office is in Newmarket and the handling of claims is done right here in Canada. Even if the Claims Satisfaction is poor in the USA, that does not necessarily mean that the same holds true in Canada.
Cheers!
Hey Guys,
I was actually able to find an older copy of the FSCO Auto Claims Satisfaction Survey from 2003. Have a look at the following link to see how your company measures up. Note: This is a Adobe PDF file:
http://www.easywayinsurance.ca/pdf/2003-AutoClaimSatisfactionSurvey.pdf
The survey gives you the following:
- Percentage of people satisfied with their Claim Service
And then this percentage is broken down into the following:
- Percentage of people VERY satisfied with their Claim Service
- Percentage of people somewhat satisfied with their Claim Service
Here are a few results that might be of interest:
STATEFARM: 90% Satisfied (73% Very Satisfied, 17% Somewhat Satisfied)
LIBERTY (aka PC Insurance): 86% Satisfied (63% Vey Satisfied, 23% Satisfied)
TD General: 87% Satisfied (56% Vey Satisfied, 31% Satisfied)
BELAIR: 84% Satisfied (58% Vey Satisfied, 26% Satisfied)
FACILITY: 72% Satisfied (42% Vey Satisfied, 32% Satisfied)
KINGSWAY: 70% Satisfied (36% Vey Satisfied, 34% Satisfied)
Note that these results may have changed over the last five years. Also note that Kingsway and Facility are non-standard risk insurers, so it is expected that their results will not be as good as the standard-risk insurers.
Cheers!
I was actually able to find an older copy of the FSCO Auto Claims Satisfaction Survey from 2003. Have a look at the following link to see how your company measures up. Note: This is a Adobe PDF file:
http://www.easywayinsurance.ca/pdf/2003-AutoClaimSatisfactionSurvey.pdf
The survey gives you the following:
- Percentage of people satisfied with their Claim Service
And then this percentage is broken down into the following:
- Percentage of people VERY satisfied with their Claim Service
- Percentage of people somewhat satisfied with their Claim Service
Here are a few results that might be of interest:
STATEFARM: 90% Satisfied (73% Very Satisfied, 17% Somewhat Satisfied)
LIBERTY (aka PC Insurance): 86% Satisfied (63% Vey Satisfied, 23% Satisfied)
TD General: 87% Satisfied (56% Vey Satisfied, 31% Satisfied)
BELAIR: 84% Satisfied (58% Vey Satisfied, 26% Satisfied)
FACILITY: 72% Satisfied (42% Vey Satisfied, 32% Satisfied)
KINGSWAY: 70% Satisfied (36% Vey Satisfied, 34% Satisfied)
Note that these results may have changed over the last five years. Also note that Kingsway and Facility are non-standard risk insurers, so it is expected that their results will not be as good as the standard-risk insurers.
Cheers!
