Ontario Gov't mandates a 15% decrease to *Auto* Insurance Rates

VifferFun said:
I don't know why people think there is anything remotely close to a monopoly in the insurance market of Ontario. I believe there is upwards of 200 insurance companies licensed to provide auto insurance in Ontario. If that's not a competitive market, then what is?
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It's not competitive enough, and it's closer to a monopoly cause it is Gov't regulated.....in a sense,,,,the Gov't says you need to make X number of dollars, and you have to comply....ohhh and those 200 companies licensed to provide insurance are actually there to make money for the Gov't......and they get what ever is left over....

if it was such a monopoly why can't these 200 companies decrease premiums by 15 percent, or 20 or 50, cause the Gov't says so.......

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FAIR said:
In September 2010, the government approved reforms to Ontario's auto insurance system to address claims costs without investigating the impact these changes would have. These reforms reduced costs for insurers, decreased consumer coverage (down to $3500 from $100,000 for rehab) and ensured that many MVA victims no longer have timely access to necessary medical treatment. These ill-conceived changes that favor insurers have created a download to the taxpayer and a backlog within our court systems. That ensures that those injured in an auto accident in Ontario have less access to necessary treatment and a long wait for justice in a province that puts the interests of big business ahead of the interests of taxpayers. There are now 10,510 injured accident victims in Ontario waiting for hearings to get the benefits they were promised. Consumers have every right to be angry about the way they are treated by their insurer when half of all claims are denied (28,239 claims denied last year). There is an organization out there that is bringing the issues to light - Fair Association of Victims for Accident Insurance Reform. We need to speak up with consumer concerns or we will be left with no benefits for those most injured on our roads.
http://www.fairassociation.ca/the-independent-medical-examination-imeie/ See http://www.canadianunderwriter.ca/news/fsco-clears-auto-insurance-mediation-backlog/1002556748/ .
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This is something that could be better addressed by someone working in claims. We have a few adjusters on this board so hopefully they can comment. In general, a part of the reform was aimed at reducing the costs of examinations where some clinics screwing over insurance companies (and hence policyholder with increased premiums) with expensive assessments. I don't know how that has translates to the experience of claimants -- the Gov't designs the product and how you can claim, and we just put the price tag on that risk based on our expected costs.
 
VifferFun said:
the Jevco/Intact theory is all pure speculation on my part based on the premium changes people have reported.

The survey on this board about people leaving Intact was actually created by me. Since it's a competitive market and all insurance companies want to attract profitable business, I wouldn't mind trying to bring in some of the good business that Intact is losing by offering them rates more comparable to what Jevco was charging.
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drop my insurnace on my bike by 200 bucks and you will have a new client......that don't mean you get to up my car and house insurance to make up,,,,drop them as well and I will gladly bring you all of my business....

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GateKeeper said:
Really now......don't the insurers have us over a barrel already, someone wants to give them even more ammo to screw us with.....

Talk about Big Brother watching......

No Thanks.......

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This should actually be good news for people who believe they're good drivers but are penalized based on the statistics of their group. For example, if you live in Brampton but don't drive like the typical Brampton resident, your premium can be more individualized. Same thing goes for young operators. Other options might start to open up like charging a single premium for people who own multiple cars, charging cheaper rates if young operators rarely drive between 12AM-6AM when most of their accidents occur, etc.

I've seen the OBDII devices in action and they're actually a really cool piece of technology. It's actually already being used by Desjardins under the name "Ajusto" and I expect more insurers will be implementing programs soon. In the short term (0-5 years), I would expect discounts simply for having a device installed so that the insurers can collect data to correlate with claims. In the longer term (5-10 years) we might see more individualized premiums. the programs will be optional, but you will be forgoing the discounts.

Desjardins Ajusto:
http://www.ajusto.com/on/en
 
fastar1 said:
The best that can achieve is to redistribute costs according to some different less-than-perfect risk model than we already have, since costs won't change. Some will see rate hikes, some will see reductions.
If insurers really wanted to cut rates overall they'd discount drivers with dash cams instead of OBDII readers.
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Dash cams would be interesting, but I don't know how you could translate what they see into useful information? The dash cam could show when you're following to closely, but this would probably be captured by an OBDII dianostic that shows you frequently accelerate and brake hard compared to other people driving in that area.
 
GateKeeper said:
It's not competitive enough, and it's closer to a monopoly cause it is Gov't regulated.....in a sense,,,,the Gov't says you need to make X number of dollars, and you have to comply....ohhh and those 200 companies licensed to provide insurance are actually there to make money for the Gov't......and they get what ever is left over....

if it was such a monopoly why can't these 200 companies decrease premiums by 15 percent, or 20 or 50, cause the Gov't says so.......

.
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It's an extremely competitive market, but it seems that no rational explanation is going to change your thoughts on the matter.
 
VifferFun said:
The Gov't insurer might not refuse a vehicle outright, but they could make it prohibitively expensive (such as the huge increase in Saskatchewan Motorcycle premiums that another member pointed out).
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Double is a scary word but doesn't mean as much if rates are a lot lower to begin with. If I had $100 insurance and it jumped to $200, I'd sure be made, but that wouldn't make it "prohibitive" (I know it's not that low in SK, that's just an example). Also, as I understand it, the Saskatchewan situation is not a done deal and there is some pushback, possibly a legal challenge. So we'll see.

I don't know why people think there is anything remotely close to a monopoly in the insurance market of Ontario. I believe there is upwards of 200 insurance companies licensed to provide auto insurance in Ontario. If that's not a competitive market, then what is?
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It's not a monopoly, nor have I claimed it is. I said it's a partial monopoly, or a quasi-monopoly. The obligation to purchase insurance offers a big guarantee to companies which is not present in a properly free market. When it comes to insurance, that represents a big personal risk, but some people who could not afford to drive otherwise will certainly run that risk. That's also an easier risk to take in a country with socialized medicine.

If there's no legal obligation to buy, that limits collusive raising of rates, because people can just walk away if they have to. You do not see these absurd situations where someone does nothing wrong but sees their premiums rise 20% per year for four years in a row. That's not something made up either - that is literally what happened to me. Now, as you correctly pointed out, I can switch companies, and I have done so every year in order to retain my old premium, and I am not the type to drive without insurance, even if it wasn't a legal obligation, but in a true free market companies do not just dump their cost shocks (I'll be generous and say the rise in costs are legitimate, where others here might cry conspiracy or greed) passed directly on to the end consumer without even blinking.

You claim your company has done just that, but will now be screwed by regulation and now cannot compete. Other companies see that and will avoid your situation. That's again something you only see in a badly-regulated quasi-monopoly situation. Maybe there's not organized collusion, but the laws and regulations produce effects that mimic collusion. And most people can't tell the difference.

Ontario's in a terrible spot. We either need more regulation or way less, but the half-assed pile neither-here-nor-there we've got now is terrible.
 
GateKeeper said:
^^

Yes there is

lower my rates, from year to year......

but NO

the rates go UP and UP and UP every year

funny how that works.....

for example the bike, insured last year for 520 now it's 709, yet nothing changed on my end.....

so give me a rational explanation and change my mind

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You must not be shopping around. I've seen my premiums decrease over the last three years and I'm not alone. You can look up the rate changes that the regulator approves each quarter, by company, here:

http://www.fsco.gov.on.ca/en/auto/rates/Pages/default.aspx

Just look through the approved rate changes over 2012-2013 -- the vast majority are negative.
 
Mongrel said:
Double is a scary word but doesn't mean as much if rates are a lot lower to begin with. If I had $100 insurance and it jumped to $200, I'd sure be made, but that wouldn't make it "prohibitive" (I know it's not that low in SK, that's just an example). Also, as I understand it, the Saskatchewan situation is not a done deal and there is some pushback, possibly a legal challenge. So we'll see.



It's not a monopoly, nor have I claimed it is. I said it's a partial monopoly, or a quasi-monopoly. The obligation to purchase insurance offers a big guarantee to companies which is not present in a properly free market. When it comes to insurance, that represents a big personal risk, but some people who could not afford to drive otherwise will certainly run that risk. That's also an easier risk to take in a country with socialized medicine.

If there's no legal obligation to buy, that limits collusive raising of rates, because people can just walk away if they have to. You do not see these absurd situations where someone does nothing wrong but sees their premiums rise 20% per year for four years in a row. That's not something made up either - that is literally what happened to me. Now, as you correctly pointed out, I can switch companies, and I have done so every year in order to retain my old premium, and I am not the type to drive without insurance, even if it wasn't a legal obligation, but in a true free market companies do not just dump their cost shocks (I'll be generous and say the rise in costs are legitimate, where others here might cry conspiracy or greed) passed directly on to the end consumer without even blinking.

You claim your company has done just that, but will now be screwed by regulation and now cannot compete. Other companies see that and will avoid your situation. That's again something you only see in a badly-regulated quasi-monopoly situation. Maybe there's not organized collusion, but the laws and regulations produce effects that mimic collusion. And most people can't tell the difference.

Ontario's in a terrible spot. We either need more regulation or way less, but the half-assed pile neither-here-nor-there we've got now is terrible.
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Insurance is mandatory because otherwise the burden or personal injuries would be placed on all of society, and not just those with cars (i.e. taxes would have to increase to support people who are injured but without insurance). Currently, the insurance industry is assessed with health levies payable to the Gov't to cover the cost of health care related to auto injuries.

There is no collusion of rates -- in fact it's quite the opposite where companies are battling to increase market share by offering premiums that are lower than the competitors, but still high enough to pay expected future claims.

I do agree that Ontario is in a bit of a mess. Claims are out of whack resulting in high premiums. The September 2010 reform helped to alleviate the problem somewhat, but hasn't gone far enough to drastically decrease rates. While the 15% reduction will be nice for policyholders, it's not a long-term solution unless claims remain lower.

I think that de-regulating auto insurance would be a good first step to lowering premiums and making them less volatile. History has proven that the most heavily regulated states/provinces have affordability and stability issues.
 
VifferFun said:
You must not be shopping around. I've seen my premiums decrease over the last three years and I'm not alone. You can look up the rate changes that the regulator approves each quarter, by company, here:

http://www.fsco.gov.on.ca/en/auto/rates/Pages/default.aspx

Just look through the approved rate changes over 2012-2013 -- the vast majority are negative.
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now I need to shop around, that does not change my mind nor is it a rational explanation...

like I said, I was paying 520 for a year now 709

get me the same rate I had before and I will give you and or your employer all of my business....

and I guess I need to drop my broker, cause no matter how much I complain to him and tell him I need him to find me a better and cheaper rate, it just never happens.....

I guess brokers are useless, and I will have to shop on my own.....I guess then I don't understand the role of a broker.....
 
VifferFun said:
You must not be shopping around. I've seen my premiums decrease over the last three years and I'm not alone. You can look up the rate changes that the regulator approves each quarter, by company, here:

http://www.fsco.gov.on.ca/en/auto/rates/Pages/default.aspx

Just look through the approved rate changes over 2012-2013 -- the vast majority are negative.
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%
If it shows 0% change does that mean the insurer filed for a rate increase or decrease and was denied?
 
GateKeeper said:
now I need to shop around, that does not change my mind nor is it a rational explanation...

like I said, I was paying 520 for a year now 709

get me the same rate I had before and I will give you and or your employer all of my business....

and I guess I need to drop my broker, cause no matter how much I complain to him and tell him I need him to find me a better and cheaper rate, it just never happens.....

I guess brokers are useless, and I will have to shop on my own.....I guess then I don't understand the role of a broker.....
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I don't know the particulars of your situation or the company you are with, but it's possible that you're expected future claims/expenses has always been $675 and you were getting a stellar deal before, and are just paying adequate rates now. A company wants to charge as close to the expected claims/expenses as possible to attract as many profitable clients as possible. A deterioration in a number of factors could have lead to an increase in your situation. Some factors include the performance of the insurer's motorcycle book in general, claims in your area of residence, claims of people of similar age and riding history, etc. I agree that a 36 percent; increase is really high -- I tend to cap factor adjustments to reduce the impact to individual clients such that *VERY* few people (less than 1 in 1000 clients) would see an increase that large, but other companies might not follow the same mentality.

I really suggest that people shop around. While brokers are great, each broker only represents the insurers they are licensed to do business with. In other words, if you only stick with one broker then you're only tapping in to 5-10 insurance companies of the 200 or so providing insurance in Ontario. Some insurance companies (such as State Farm, TD, Co-operators) deal exclusively through agents, so you would have to call/visit them directly to get a quote. Sometimes it is well worth your while :)
 
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VifferFun said:
You must not be shopping around. I've seen my premiums decrease over the last three years and I'm not alone. You can look up the rate changes that the regulator approves each quarter, by company, here:

http://www.fsco.gov.on.ca/en/auto/rates/Pages/default.aspx

Just look through the approved rate changes over 2012-2013 -- the vast majority are negative.
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My rates havent decreased in a while, and i shop around from time to time. Been with the same company for a really long time, and just got a quote that blows them out of the water finally.
 
fastar1 said:
If it shows 0 percent change does that mean the insurer filed for a rate increase or decrease and was denied?
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Excellent question! If a change shows up on FSCO's approved rates list, then it was a filing that was submitted and approved by the regulator. The percentage value represents the average rate change experienced by a company's clients. If some clients increase and others decrease, the average premium change can be 0 percent.

The following simplified hypothetical example will show how a 0 percent rate change can happen as well as illustrate the importance of shopping around.

EXAMPLE:

eg. Suppose that an insurer has only two clients with the following characteristics:

TODAY:
CLIENT A (35 years old): $500/yr in premium; $400/yr in expected claims
CLIENT B (65 years old): $500/yr in premium; $600/yr in expected claims
TOTAL $1000/yr in premium; $1000/yr in expected claims

In total, the company is collecting $1000 in premium and expects to pay $1000 in losses but there's a big problem -- the 35yo is overpaying relative to the 65yo based on expected future claims experience. If the company doesn't change their rating, then they will lose Client A to a competitor charging $400, and retain client B since no competitor will want to take someone with expected claims of $600 for less than $500! Without change, the company would be facing the following situation where they are paying $1.20 in claims for every $1.00 received:

TOMORROW SCENARIO A:
CLIENT A (35 years old): Shopped around and left the company
CLIENT B (65 years old): $500/yr in premium; $600/yr in expected claims
TOTAL $500/yr in premium; $600/yr in expected claims

Obviously that's no good for the insurer! To prevent the situation above, the insurer should adjust their factors such that 65 year olds pay more than 35 year olds. After making the adjustment, both the 35yo and 65yo are paying rates equal to their expected future claims. The insurer is likely to retain the business unless either client is able to shop around and find another insurer is undercharging either 35yo or 65yo operators (such as in "Tomorrow Scenario A". After adjusting the relative rates, the insurer's situation will look like the following:

TOMORROW SCENARIO B:
CLIENT A (35 years old): $400/yr in premium; $400/yr in expected claims
CLIENT B (65 years old): $600/yr in premium; $600/yr in expected claims
TOTAL $1000/yr in premium; $1000/yr in expected claims

In the end, this is a 0 percent change for the insurer -- they were collecting $1000 before, and they continue to collect $0 later. See the importance of shopping around? :)
 
VifferFun said:
I don't know the particulars of your situation or the company you are with, but it's possible that you're expected future claims/expenses has always been $675 and you were getting a stellar deal before, and are just paying adequate rates now. A company wants to charge as close to the expected claims/expenses as possible to attract as many profitable clients as possible. A deterioration in a number of factors could have lead to an increase in your situation. Some factors include the performance of the insurer's motorcycle book in general, claims in your area of residence, claims of people of similar age and riding history, etc. I agree that a 36 percent; increase is really high -- I tend to cap factor adjustments to reduce the impact to individual clients such that *VERY* few people (less than 1 in 1000 clients) would see an increase that large, but other companies might not follow the same mentality.

I really suggest that people shop around. While brokers are great, each broker only represents the insurers they are licensed to do business with. In other words, if you only stick with one broker then you're only tapping in to 5-10 insurance companies of the 200 or so providing insurance in Ontario. Some insurance companies (such as State Farm, TD, Co-operators) deal exclusively through agents, so you would have to call/visit them directly to get a quote. Sometimes it is well worth your while :)
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Wow what a way with words.....I will applaud you for that....

what changed, nothing other than a renewal for next year, and Intact taking over Jevco and increasing me from 520 to 709

I called and asked them why, they did not have an answer, other than almost everyone has experienced an increase, now what kind of rational answer is that ?

I better get out of this thread before I say something that is going to get me booted off this forum, but as I have said before and will continue to say so...

Insurance companies are just legalized extortionists....
 
GateKeeper said:
Wow what a way with words.....I will applaud you for that....

what changed, nothing other than a renewal for next year, and Intact taking over Jevco and increasing me from 520 to 709

I called and asked them why, they did not have an answer, other than almost everyone has experienced an increase, now what kind of rational answer is that ?

I better get out of this thread before I say something that is going to get me booted off this forum, but as I have said before and will continue to say so...

Insurance companies are just legalized extortionists....
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Oh, you were in the Jevco-turned-Intact ordeal -- that explains helps to explain the increase. I can't remember if it was in this thread or the Jevco premium thread where I explained that in more detail. In short, I agree with you and I disagree with the way that Intact rolled the entire Jevco motorcycle book onto their Intact rating algorithm en masse (resulting is some rather huge increases and decreases). Were you able to find an insurer that will beat your new Intact premium?
 
VifferFun said:
Oh, you were in the Jevco-turned-Intact ordeal -- that explains helps to explain the increase. I can't remember if it was in this thread or the Jevco premium thread where I explained that in more detail. In short, I agree with you and I disagree with the way that Intact rolled the entire Jevco motorcycle book onto their Intact rating algorithm en masse (resulting is some rather huge increases and decreases). Were you able to find an insurer that will beat your new Intact premium?
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no I have not, I got the notice of my renewal, argued with them, got no where, was going to shop around, but life and work and everything else got in the way, by the time I had time it was too late so I paid for another year online via credit card so I could continue riding for this season, but I will be taking sometime in the very near future to look elsewhere, and even if I have to pay a get out of my current policy penalty I will, as I am sure it will be less than the almost 200 dollar increase I was slapped in the face with...

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Personally I see the OBDII thing as bad, since we don't live in a perfect world. If we did, it would be awesome, but for every 1 item that causes a decrease in premiums there'll be 10 that cause increases. Good example is monitoring acceleration -- So if I accelerate up to the limit quicker than the car next to me I deserve to pay more than him? This would be similar to if police could track everything on the road in real-time, and could ding anyone who hits 101km/h on the 401 for more than 0.1 of a second.

Also as far as rates do go -- I believe both viffer and others here are making good points. Regarding rate increases, I also agree that a lot of times they can be unwarranted, and although they are typically based on 'something', that something doesn't always relate back to the policy holder. Just because red cars were in more accidents one year, or say CBR600RRAs were caught speeding more than other models, doesn't mean ALL policy holders of those vehicles should pay more. That's almost the equivalent of saying if more people of one race committed crimes in a year, then all people of the race should be monitored the following year, or that if one race was caught stealing more often, then they should have to pay more for items in a store -- no one would ever go for/allow for that, yet somehow insurance companies get away with doing similar.

Lastly, as pointed out by others, the fact that you have to have full policies on all vehicles borders on stupidity -- If I live alone and can only drive or ride 1 vehicle at a time, why not just have to pay for a full policy on the most expensive of the bunch? If I owned a Ferrari and a Civic, as well as a Ninja 250 and a HP4, why do I need 4 full policies vs 2 or even just 1? Driver-based instead of vehicle-based insurance would make much more sense to me...again, assuming it didn't involve a chip that raised rates $1 every time I went 1km/h over the limit in an area for even a split second, or that I drive near cars of a certain colour too often within a set time period.
 
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GateKeeper said:
no I have not, I got the notice of my renewal, argued with them, got no where, was going to shop around, but life and work and everything else got in the way, by the time I had time it was too late so I paid for another year online via credit card so I could continue riding for this season, but I will be taking sometime in the very near future to look elsewhere, and even if I have to pay a get out of my current policy penalty I will, as I am sure it will be less than the almost 200 dollar increase I was slapped in the face with...

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I hope you find a cheaper premium :) If you haven't posted already, you can post your before and after premiums in the Jevco/Intact thread.
 
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