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

conundrum said:
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.
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The overall premium level won't change as a result of OBDII devices, but just the distribution between policyholders. Similar to the example I posted earlier, we would be looking for statistical indicators in the OBDII data that can cherry pick the good risks so that we can offer them a lower premium and steal them from our competitors. I'm not sure how the data is going to be used yet -- you obviously raised some god points (such as accelerating to match speed on the 401) that are definitely on our radar. The devices are actually smart enough to tell whether you are entering/exiting the 401 as opposed to just cruising along, so it's possible that acceleration events on the entrance/exit ramps could be ignored. Also, we would consider the odd acceleration to be a problem since it is obviously necessary at times for safe operating. The people likely to cause claims are those who accelerate and brake hard a LOT. Speeding actually isn't of much interest.

conundrum said:
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.
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We can only rate as best we can with the data we are given. Typical variables that affect your rate include your claims and convictions history, age, driving record, location, commute distance, distance traveled per year, vehicle make/model/year, etc. Ethnicity is banned from rating.

conundrum said:
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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I've wrote on this topic before -- I don't disagree with you, but in Ontario you insure the vehicle and not the operator. If we reversed that and insured the operator instead of the vehicle, then less-fortunate families sharing a single car between two people would have to pay double the premium, so that the single guy with a Porsche, Ferrari, and Mercedes can enjoy a single premium. I don't think that would sit well :P The alternative is to bill per km rather than per vehicle, which might be made possible in the future with OBDII chips. Anyway, that's another discussion entirely :)
 
VifferFun said:
Indeed it is -- this move is purely political. Mandated an across-the-board decrease is a little absurd, since the companies already operating on a tight profit margin will be forced to take rates that are inadequate to pay losses. It will be interesting to see how this plays out.
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I dont see how insurance companies are operating on tight profits,when everybody is scared to make a claim and pay people off in cash that they had a minor accident with.
 
canuckwr250 said:
I dont see how insurance companies are operating on tight profits,when everybody is scared to make a claim and pay people off in cash that they had a minor accident with.
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That might be true for some of the minor fender benders, but definitely not true for the ones including Accident Benefits claims (which is where the real costs are skyrocketing). Collision and Comprehensive claims and premium (i.e. covering physical damage) are actually quite reasonable.
 
GateKeeper said:
I think I was the first one to post there....

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Thanks! I've modified the questionnaire a little bit since I forgot to ask about Collision and Comprehensive. Based on your old Jevco rate of $525, I'm guessing that you had neither COL or CMP. Did you have $1M liability? I asume you were getting the "Select Rider Discount" and "Renewal Discount"?
 
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VifferFun said:
Thanks! I've modified the questionnaire a little bit since I forgot to ask about Collision and Comprehensive. Based on your old Jevco rate of $525, I'm guessing that you had neither COL or CMP. Did you have $1M liability? I asume you were getting the "Select Rider Discount" and "Renewal Discount"?
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nothing changed from the old to the new other than the price increase

I don't have anything less or anything more now, than I did before, and that is what I can't wrap my head around, they just arbitrarily upped the amount
 
GateKeeper said:
nothing changed from the old to the new other than the price increase

I don't have anything less or anything more now, than I did before, and that is what I can't wrap my head around, they just arbitrarily upped the amount
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Do you really believe that? When an insurer sets its rates it sends it's accountants out on a steak lunch where they decide that people who's last names start with T will get a 20% bump in premiums, and people who's month of birth multiplied by their date of birth is greater than 100 will get a 10% increase?
 
VifferFun said:
I agree -- that's a ridiculous increase (although it seems like you were getting a steal at only $260 for motorhome liability). Did anything about your risk profile change (move to a new location, claims, etc.)? You must have got hit with a combo of factor increases. Which company?
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Nothing changed at all, he figured that they did a review of the coverage class (for the first time in a while) and had brought it up to date. TDMM.
 
Got an Ajusto quote just now for my car. Would be over 2x what I'm currently paying, and I dunno if that is with the supposed 25% discount for my driving habits or not. Thanks but no thanks.
 
As a consumer, I am looking forward to this. However, Ontario must take action to reduce the amount being paid out for bodily injury claims. It is ridiculous. If no drastic changes are implemented by the government to reduce this, look for insurers to get out of auto insurance in Ontario in the next 5 years. Auto insurance is not as profitable as one may think.
 
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