Motorcycle Insurance - A losing class of business?
(Article from Canadian Insurance)
Saskatchewan Government Insurance (SGI) isn't the only insurer losing money on motorcycle insurance.
According to Randy Carroll, CEO of the Insurance Brokers Association of Ontario, Jevco's overall loss ratio for its motorcycle business was "well over 100%” over the last three years.
"Obviously this will be an area that will be looked at by those writing this type of risk going forward,” states Carroll.
Intact Insurance, which acquired Jevco in 2012, may have to increase its motorcycle rates to make up for the loss, adds Carroll. Intact had yet to provide further data at time of publication of this post.
Last week, SGI made a proposal to the Saskatchewan Rate Review panel to remove the cap on motorcycle rate increases in an attempt to recover its losses.
"We incur about a $9 to $10 million loss annually,” Don Thompson, vice-president of product management at SGI, told Canadian Insurance Top Broker.
Read: Saskatchewan motorcyclists could be hit with 73% increase
Every other vehicle group, he says, pays 1% more in their rate to subsidize that loss.
The Saskatchewan Rate Review Panel is currently examining the proposal and, if passed, motorcycle drivers in the province could see an average rate increase of 73% as soon as August 31st.
Motorcycle enthusiasts are, understandably, upset.
Read: SGI submits new rate proposals
"We're taking a lot of heat [from consumers],” says Thompson, who admits that brokers will have to deal with many unhappy customers.
Garth Neher, president of the Insurance Brokers' Association of Saskatchewan (IBAS), says his organization always has concerns when consumers are faced with major rate increases.
"But on the other hand,” he says, "SGI is in charge of setting their rates.
"At the end of the day, we have to trust that SGI has actually studied their numbers and that they have the facts to rationalize what they're proposing.”
Both Neher and Thompson stress that this is just a proposal.
"At this point in time, they're presenting the rate proposal. It's not automatic that it's rubber-stamped,” says Neher.
Whether the rate cap removal is approved or not, Thompson stresses that something must be done to ensure every vehicle group is paying a fair rate.
"We're trying to price this product to break even. We're trying to have each rate group pay their right rate so there is no cross-subsidization. That's all we're trying to do here.”
If My Basement Floods, am I covered?
To answer this question, the source of the water must be known first. For instance, if it were to seep in through the floor or the walls, there is NO Coverage. If your sump pump were to fail or the sewer were to back up, as long as you had SEWER/SUMP PUMP Coverage endorsement on your policy, the policy would pay.
If My Car is Broken into, does my Car insurance pay for the contents?
No. Car Insurance will only cover things such as equipment that is attached. All other things would be covered by your home or tenants insurance. One thing to realize is that most deductibles are usually 300, 500, or 1000 so most small claims won?t be covered. Another thing to note, is that most insurance companies will not pay more than $1,500 for electronic equipment. So for those who have expensive stereos, you must notify us to ensure you are covered.
What is No Fault Insurance?
No Fault insurance simply refers to the fact that when you are involved in a car accident, you will will deal with your own insurance company regardless of whose fault the accident was. Every accident still carries the element of fault and the person responsible for the accident will have their insurance premiums affected.
If I raise my deductible, will I save a lot of money?
When it comes to car insurance, the amount of money saved by raising your deductible from 300 to 500 or even 1,000 is usually not worth while. Sometimes it as little as $15 saved to have your deductible raised. We do recommend that you consider 500 or 1000 on house insurance as there is a considerable savings and in most cases, it is not recommend that you submit a claim that is under $500.