Motorcycle Insurance in Ontario is racketeering

[omnivore]

I know that all insurance companies have many people doing their actuary calculations, and that non of them are in the business of loosing money. period. All insurance companies must make money to stay afloat.

My buddy moved from Toronto to Buffalo. He just bought a newer bigger bike and is delighted to find that his rates are now 1/5th of what they were in Ontario on a smaller older bike....same coverage.

2001 CBR600-$1060/yr (Ont)
2005 GSXR750 - $204/yr (NY)

Now his new insurance provider in the USA isn't retarded, and they aren't a new business, and they aren't in the habit of making decisions that cost them huge sums of money. So their actuaries have calculated and discovered that at $204, his rates should average out to a profit for them, considering all of their other insured riders .
Or are we to believe that Insurance providers simply have 5 x more costs here in Ontario than they do in lawsuit-happy USA?

One more good reason to move south of the border.

[CBRJOHN]

Countdown to Viffer........

[BusaBob]

I'm waiting, Viffer!

[Insurance-Broker]

I know that all insurance companies have many people doing their actuary calculations, and that non of them are in the business of loosing money. period. All insurance companies must make money to stay afloat.

My buddy moved from Toronto to Buffalo. He just bought a newer bigger bike and is delighted to find that his rates are now 1/5th of what they were in Ontario on a smaller older bike....same coverage.

2001 CBR600-$1060/yr (Ont)
2005 GSXR750 - $204/yr (NY)

Now his new insurance provider in the USA isn't retarded, and they aren't a new business, and they aren't in the habit of making decisions that cost them huge sums of money. So their actuaries have calculated and discovered that at $204, his rates should average out to a profit for them, considering all of their other insured riders .
Or are we to believe that Insurance providers simply have 5 x more costs here in Ontario than they do in lawsuit-happy USA?

One more good reason to move south of the border.

Why do we pay more in taxes - income tax and others...

Why do you pay more to buy the same car here as compared to US?

What about electronics, computers, houshold item......I can list about a 100 items but hopefully you get the point!

My house in Brampton costs 2X more than what my cousin paid in in US for a bigger home..

You get paid more(in general) in USA for the same position as compared to Canada.

[FiReSTaRT]

C'mooooon Viffer

[seame]

Many Canadian industries are inefficient. The banks are the same. I'll bet if you could find out how many employees per 10,000 policies there are, there would be way more employees in Canada. Do you think we are getting a "good deal" from the banks ? It's the same for the insurance companies. The lack of competitiveness comes from being a smaller market (not as many players).

It's just good old Canadian inefficiency. When a decision is being made by a company in an inefficiant industry about what to do, it always comes down to protecting the employees (ie. raise premiums, rather than become more efficient, and lay off employees).

You can see this at the lottery corporation as well. They have denied a number of lottery prize claims recently, so that they can continue to pay salaries for their bloated beurocracy.

They are just looking out for themselves, and their "friends' (ie. other employees). This will not change, unless the American, and Canadian markets become totally "seamless" (true "free trade" = competition). This will never happen, because it would mean laying off too many unproductive Canadian beurocrats.

I have had too many bad experiences with insurance companies to list here.

SeaMe

[Mistero2009]

I think this topic has been covered already in another thread. The recap is that US insurance companied insure you for lesser amount of money - $40000 was mentioned as one of the amounts, if I recall correctly!

[kellen]

Why do we pay more in taxes - income tax and others...

Why do you pay more to buy the same car here as compared to US?

What about electronics, computers, houshold item......I can list about a 100 items but hopefully you get the point!

My house in Brampton costs 2X more than what my cousin paid in in US for a bigger home..

You get paid more(in general) in USA for the same position as compared to Canada.

yeah, all 4x more! sweet

[anth1414]

I know that all insurance companies have many people doing their actuary calculations, and that non of them are in the business of loosing money. period. All insurance companies must make money to stay afloat.

My buddy moved from Toronto to Buffalo. He just bought a newer bigger bike and is delighted to find that his rates are now 1/5th of what they were in Ontario on a smaller older bike....same coverage.

2001 CBR600-$1060/yr (Ont)
2005 GSXR750 - $204/yr (NY)

Now his new insurance provider in the USA isn't retarded, and they aren't a new business, and they aren't in the habit of making decisions that cost them huge sums of money. So their actuaries have calculated and discovered that at $204, his rates should average out to a profit for them, considering all of their other insured riders .
Or are we to believe that Insurance providers simply have 5 x more costs here in Ontario than they do in lawsuit-happy USA?

One more good reason to move south of the border.

i am in no ways defending insurance companies....
but i think it comes down to major factors in this case.

#1. location (minor factor).

#2. policy coverage (major factor).
an insurance policy in ontario has a minimum coverage, and it is that minimum that is higher...therefore more expensive....than one in the US.

ontario has certian coverages and dollar values that are required for every policy.....and the US has a much lower minimum, which is why the insurance policies are so much lower.

so...for example.

in ontario. you pay $1,000 for the year.
you are covered by liablitiy at a minimum of $300,000 (i think)
that includes damages to you and the people that you hurt..harm..and their property that is damaged.

in US. you pay $200 for the year.
you are covered for a little bit of money.
you have to pay all the medical bills.(out of pocket)
you have to pay for all the damages. (out of pocket)

a simple way of looking at it....you get what you pay for.
nothing good comes from being free.

i am sure viffer will give a much better understanding than me.

[BusaBob]

i am in no ways defending insurance companies....
but i think it comes down to major factors in this case.

#1. location (minor factor).

#2. policy coverage (major factor).
an insurance policy in ontario has a minimum coverage, and it is that minimum that is higher...therefore more expensive....than one in the US.

ontario has certian coverages and dollar values that are required for every policy.....and the US has a much lower minimum, which is why the insurance policies are so much lower.

so...for example.

in ontario. you pay $1,000 for the year.
you are covered by liablitiy at a minimum of $300,000 (i think)
that includes damages to you and the people that you hurt..harm..and their property that is damaged.

in US. you pay $200 for the year.
you are covered for a little bit of money.
you have to pay all the medical bills.(out of pocket)
you have to pay for all the damages. (out of pocket)

a simple way of looking at it....you get what you pay for.
nothing good comes from being free.

i am sure viffer will give a much better understanding than me.

but didn't the OP say it was for the same coverage?

[VifferFun]

Anthony has already answered the question for me, and I have already answered this question MULTIPLE times in other threads. Of course, I don't expect everyone to read all of the Insurance threads every day, but perhaps a search on "USA" in the insurance forums might pull up some useful information for the original poster.

In Ontario, you get a lot of coverage with you policy. A LOT. In the USA, you barely get any coverage at all. I believe that New York state has a $25K minimum liability limit, and this is laughable. If the payouts of insurance companies are capped at a mere $25K for liability, then obviously they don't have to charge nearly as much. In Ontario, an injury claim is just barely getting started at $25K. Honestly, we wouldn't even blink twice about such a small claim. Over 95% of Ontario policies carry a limit of $1M or greater.

The Canadian Insurance Industry is not inefficient by any means. In fact, I would argue the complete opposite. I have worked in Chicago for the Actuarial Department of one of the largest American insurance companies, and I can tell you that actuaries do A LOT more work here in Canada, in much shorter time periods. When I did a rate review in the US, I would have to explain it (and get approval) from my manager, then my manager's manager, and then my manager's manger's manager for the final say. One actuary only works on one coverage in one state. Here is Canada, one actuary works on all coverages in about three or four provinces. Also, here in Canada, the actuaries develop their own statistical programming rather than having it provided by IT.

Also, I don't know why people think there is a lack of competition for insurance in Ontario. Check out the following link that provides a full listing of every insurance company licensed to provide insurance in Ontario. There are 100 pages, and each page lists about five insurance companies. If this is not competition, then I don't know what is:

http://www.fsco.gov.on.ca/english/li...edinsurers.asp

People talk smack about moving to the USA. If the USA is so great, then move there. I've lived there for a while and never want to live there again.

[seame]

i am in no ways defending insurance companies....
but i think it comes down to major factors in this case.

#1. location (minor factor).

#2. policy coverage (major factor).
an insurance policy in ontario has a minimum coverage, and it is that minimum that is higher...therefore more expensive....than one in the US.

ontario has certian coverages and dollar values that are required for every policy.....and the US has a much lower minimum, which is why the insurance policies are so much lower.

so...for example.

in ontario. you pay $1,000 for the year.
you are covered by liablitiy at a minimum of $300,000 (i think)
that includes damages to you and the people that you hurt..harm..and their property that is damaged.

in US. you pay $200 for the year.
you are covered for a little bit of money.
you have to pay all the medical bills.(out of pocket)
you have to pay for all the damages. (out of pocket)

a simple way of looking at it....you get what you pay for.
nothing good comes from being free.

i am sure viffer will give a much better understanding than me.

1) Canada has government health care, the taxpayers (you and I) pay for at least some of the healthcare after an accident.

2) The maximum liability level only has a small affect on premiums (if you bump up your liability from 1mill to 2 mill, your premium only goes up a few dollars).

3) American courts are much more likely to impose harsh settlements (therefore costing the insurance companies much more in claims).

4) Viffer, and the other insurance company apologists on this board are protecting their own jobs by coming on boards like this, and "spinning" about how the insurance companies are not ripping you off. Insurance companies may not be making much profit, but it is not because you aren't paying a high enough premium, it's because the Canadian insurance companies are not efficient.

SeaMe

[VifferFun]

1) Canada has government health care, the taxpayers (you and I) pay for at least some of the healthcare after an accident.

This is an uneducated and incorrect statement. OHIP does not pay for your injuries, the insurance companies do.

2) The maximum liability level only has a small affect on premiums (if you bump up your liability from 1mill to 2 mill, your premium only goes up a few dollars).

Yes, this is true (in part). Going from $1M to $2M is cheap, because the expected number of claims exceeding $1M is not that great. However, try to get an American company to increase your limit from $25K to $500K and watch your premium skyrocket. Almost EVERY claim exceeds $25K, so increasing your limit above this threshold will cost the insurance company a bundle. Look up "limited expected value" on math sites if you cannot comprehend this simple statistical concept. I just don't feel like explaining it here.

3) American courts are much more likely to impose harsh settlements (therefore costing the insurance companies much more in claims).

Who cares what the courts say if the insurance company only has to provide a $25K settlement at a maximum?

4) Viffer, and the other insurance company apologists on this board are protecting their own jobs by coming on boards like this, and "spinning" about how the insurance companies are not ripping you off. Insurance companies may not be making much profit, but it is not because you aren't paying a high enough premium, it's because the Canadian insurance companies are not efficient.

What do I have to gain by "defending" the insurance industry to people who have no impact on the future of the industry whatsoever?

[seame]

Also, I don't know why people think there is a lack of competition for insurance in Ontario. Check out the following link that provides a full listing of every insurance company licensed to provide insurance in Ontario. There are 100 pages, and each page lists about five insurance companies. If this is not competition, then I don't know what is:

http://www.fsco.gov.on.ca/english/li...edinsurers.asp

Only a very small percentage of the insurance companies carry motorcycle insurance, which is what the OP is talking about here.

You can't seriously think the level of competition (therefore the level of efficiency) in Canada is anywhere near what it is across the border ? Consumers get ripped off by our banks, car dealerships, motorcycle dealerships, oil companies, and yes more than any other industry, our insurance companies. I know people who work in the insurance racket. They are not enterpreneurial, they are beurocratic people. The premium differences between Canada and the US is mostly to pay the salaries of unproductive beurocrats.

SeaMe

[FiReSTaRT]

Viffer.. The OP claimed that the 80% cheaper premium was for the same level of coverage. What I've noticed about our payout system's inefficiencies is that the rates go up multiple times over as soon as the goods/service providers find out that the customer is making an insurance claim and the customer realises that (s)he needs a whole bunch of stuff that they never needed before in their lives. Nobody puts any checks on the payouts as it's not in the insurance industry's interest. It's easier to just adjust the rates.

[VifferFun]

Only a very small percentage of the insurance companies carry motorcycle insurance, which is what the OP is talking about here.

You can't seriously think the level of competition (therefore the level of efficiency) in Canada is anywhere near what it is across the border ? Consumers get ripped off by our banks, car dealerships, motorcycle dealerships, oil companies, and yes more than any other industry, our insurance companies. I know people who work in the insurance racket. They are not enterpreneurial, they are beurocratic people. The premium differences between Canada and the US is mostly to pay the salaries of unproductive beurocrats.

SeaMe

FYI, it's "bureaucrat". "Bureau" is the french word for "office", which makes it easy to remember. Just a quick spelling lesson

Clearly you didn't read what I wrote regarding the efficiency differences between Canada and the USA. I've worked in both, and the USA is MUCH more bureaucratic than Canada.

There are plenty of insurance companies in Ontario that offer motorcycle insurance. Give me a list of the insurance companies you tried to quote with that said they don' write Motorcycles.

I bet you are also one of the people advocating for government insurance. Does it get any more inefficient and bureaucratic than that?

[seame]

There are plenty of insurance companies in Ontario that offer motorcycle insurance. Give me a list of the insurance companies you tried to quote with that said they don' write Motorcycles.

I bet you are also one of the people advocating for government insurance. Does it get any more inefficient and bureaucratic than that?

My experiences with insurance companies :

1) My broker doubled my premium for the exact same coverage when I was a teenager, by switching companies to a high risk company even though I was one year older, and I had never had a claim (found out later it was because my parents started using a different broker).

2) When I was 17, I was told that my premiums would go down when I was 18. They didn't. Then I was told 19, then 21, then 25, then 30 ("sorry it only goes down at 25 when you are married").

3) When I got travel health insurance through "Blue Cross", I had some absolutely legitimate claims. They were denied. I resubmitted them in the exact same way. Some of these previously denied claims were accepted. I resubmitted the claims that were still not accepted, some of them were accepted. I never got all of the claims accepted, even though they were all legitimate.

4) My car insurance premium last year nearly doubled. This is in spite of the fact that I have never had an auto insurance claim. The reason? I switched from a Nissan Sentra, to a Honda Civic. The same class of car. The age and value should have nothing to do with it since I don't have comprehensive, or collision. The reason given is because there have been more claims by Civic drivers than Sentra drivers (even though I am the same no claim driver).

You hear the same sort of stories from others when dealing with Canadian insurance companies. Canadian consumers ARE getting ripped off by our insurance companies.

By the way, just because I don't have a spell checker, don't think you are smarter than me Smarta...

I don't think anybody is fooled by your "spin" that Canadian insurance companies are more efficient than American ones.

SeaMe

[VifferFun]

Viffer.. The OP claimed that the 80% cheaper premium was for the same level of coverage.

Where are you getting an 80% cheaper premium in the USA for the same coverage? This is NOT the same coverage, and if the OP thinks it is, then they are wrong.

What I've noticed about our payout system's inefficiencies is that the rates go up multiple times over as soon as the goods/service providers find out that the customer is making an insurance claim and the customer realises that (s)he needs a whole bunch of stuff that they never needed before in their lives. Nobody puts any checks on the payouts as it's not in the insurance industry's interest. It's easier to just adjust the rates.

This is true, and it is called insurance fraud (either on the part of the shop or the claimant). This is another problem with the rates, and insurance companies do investigate. They cannot investigate all claims because investigation is costly in itself; however, if a claim is suspicious, it will be looked into. The same problems exist in the states.

[VifferFun]

1) My broker doubled my premium for the exact same coverage when I was a teenager, by switching companies to a high risk company even though I was one year older, and I had never had a claim (found out later it was because my parents started using a different broker).

I don't know why your broker would switch you to a worse company unless the previous company ceased to exist. Sounds like you might have a bad independent broker.

2) When I was 17, I was told that my premiums would go down when I was 18. They didn't. Then I was told 19, then 21, then 25, then 30 ("sorry it only goes down at 25 when you are married").

NO ONE can tell you with certainty that your premiums are going to go up or down, because they don't know! This is the job of the actuaries, not the brokers. You will become a more desirable risk as you grow older, but it is possible that a base rate increase could be greater than your rate decrease as a result of your "better risk" status. For example, your rates might go down by 5% due to your birthday, but if there is a 6% rate increase then your premiums will still go up by 1%.

Brokers are independent of the insurance companies, and if they give you bad information, then I suggest getting a new broker.

3) When I got travel health insurance through "Blue Cross", I had some absolutely legitimate claims. They were denied. I resubmitted them in the exact same way. Some of these previously denied claims were accepted. I resubmitted the claims that were still not accepted, some of them were accepted. I never got all of the claims accepted, even though they were all legitimate.

I'm sorry to hear about that. I have no experience with Travel insurance or the company you are referring to. Just like any other industry, there are good companies and bad ones. The problem is that people treat insurance as a commodity and just go for the cheapest price and completely overlook the differences in the level of service. I suggest that you check out the FSCO claims satisfaction survey before you buy an insurance policy. On the whole, Ontarians are quite pleased with the settlement of their claims, but of course, there will ALWAYS be some dissatisfied people. I won't comment on your specific case because I don't know the details.

4) My car insurance premium last year nearly doubled. This is in spite of the fact that I have never had an auto insurance claim. The reason? I switched from a Nissan Sentra, to a Honda Civic. The same class of car. The age and value should have nothing to do with it since I don't have comprehensive, or collision. The reason given is because there have been more claims by Civic drivers than Sentra drivers (even though I am the same no claim driver).

The Honda Civic in general has a very crappy claims experience (for obvious reasons). This car is a favourite among the ricer community. Your premium will NOT double because you switched from a Sentra to a Civic; you must have changed insurance companies or another part of your risk profile changed.

You hear the same sort of stories from others when dealing with Canadian insurance companies. Canadian consumers ARE getting ripped off by our insurance companies.

I hear of many good stories, and haven't heard many bad ones. I'm not denying the fact that some people have had bad experiences, but over 85% of claimants in Ontario are quite pleased with their settlements.

By the way, just because I don't have a spell checker, don't think you are smarter than me Smarta...

When words are underlined in red as you are typing your reply, this means it is spelled incorrectly. Since you liked the word "bureaucrat" so much, I thought you might like to know how it is spelled. It's OK, I understood what you meant so no worries

I don't think anybody is fooled by your "spin" that Canadian insurance companies are more efficient than American ones.

I don't care if people are "fooled" by my "spin" as I have nothing to gain. I am writing for the benefit of the biker community, not the insurance industry. I too have to pay the rates that I set. If you've read any of my other posts, I will agree when there is a shortcoming of the insurance industry (and yes, we have our fair share).

[[evo]]

Viffer, I don't know how you do it man..