Partial Explanation as to Why Ontario MC Insurance is so high | GTAMotorcycle.com

Partial Explanation as to Why Ontario MC Insurance is so high

TorontoBoy

Well-known member
Last month I read an article in the Toronto Star about a rider who had just returned from Cali and was shocked at the premiums asked by Ontario insurers. While it is an interesting read, there's nothing in the article that we all did not know.

Today an unnamed insurance broker wrote a rebuttal letter to the Star. The letter is enlightening, though I still feel we as a group are getting ripped off and young riders are discouraged from riding. I thank the unnamed insurance broker for his time and effort to educate us, though I cannot give credit as he did not leave his name or company. I felt he needed a better platform for his letter than the Star, directly targeting Ontario motorcycle riders, so I post it here.

A rider comes home — to a big shock said:
I read the article by freelance writer Alex Binneboese. It appears he did his research by quoting accident statistics and premium comparisons between different jurisdictions.

However, he failed to compare the insurance products and laws of those jurisdictions. He should have looked into the reasons why Ontario insurance costs more.

First of all, the minimum liability limit in the Province of Ontario is $200,000 and not $1 million. He does not realize that Ontario automobile insurers pay a sizable annual assessment to OHIP to help fund the costs of motor vehicle injuries in Ontario. Geico in the U.S. does not have a similar assessment.

The cost of doing business and taxes in Ontario are higher than the U.S., but that’s just a small part. The largest part of the cost is Basic Accident Benefits. If he looks at his premium breakdown from his policy, he would see that the cost of this one coverage is significant compared to the rest.

Why, you may ask? It’s simple. Motorcycle drivers suffer more significant injuries than drivers of four-wheel vehicles. Also, their odds of having a catastrophic injury is also significant in comparison to a driver of a four-wheel vehicle.

For catastrophic injuries, his policy would provide him up to $1-million worth of medical and rehabilitation benefits, plus an additional $1 million in attendant care benefits, loss of income up to $400 a week, housekeeping and home-maintenance expenses, dependent care and caregiver coverage.

So what does he get with his $205 California policy from 12 years ago for first party medical coverage, loss of income and other expenses that he may incur due to an injury? Well, that’s an easy answer: $0.

Also, we in Ontario provide up to his policy limit of $1 million for underinsured /uninsured drivers coverage (OPCF 44Family Protection endorsement). So when that four-wheel vehicle causes the accident, a victim can sue for compensation above the entitlement from basic accident benefits.

Yes, that’s correct: you can collect your first party medical coverage and sue the guilty party, unlike in Quebec, Saskatchewan and Manitoba. In Alberta and British Columbia, you get some no-fault accident benefit coverage and you can sue, but their limits and coverage are much lower than Ontario’s for catastrophic injuries.

In British Columbia, there is a mandated government insurance plan. They insure 100 per cent of all motorcycle drivers in the province and have a larger pool of premiums to pay claims but once you hit your $150,000 limit in medical benefits, you’re done. Any additional funding is only available if you can successfully sue the party that caused the accident. If you were the at-fault driver, then you’re out of luck. In Ontario there are few companies that write or pursue motorcycle business, because it’s not a profitable line for most insurers. We do not have as many insured motorcycles in Ontario as you do on the west coast, so the pool of premiums to pay claims is not as large.

As for the value issue he raised in his article, many insurers will base the collision and comprehensive premium on the list price new and then adjust it by the model year. So if the bike is from 2008, he would not pay the same premium as a bike from 2015, even though they have the same list price. It should be noted that most vehicles are repaired vs. being written-off. The cost to repair a 2015 bike vs. a 2008 bike would be very similar.

I have been an insurance broker for 27 years. Ontario is far from perfect with regards to auto insurance, but if you are going to compare products, make sure it’s apples to apples.
 
Sounds just like everything @SonnyTheBull has been saying all along.
 
While it's the author's choice to remain anonymous, it would have been great if they gave their name.


There is nothing ground breaking or company secrets that would impact business.

Just adds credibility to what is being stated.


Sent from my iPhone using Tapatalk
 
http://www.cbc.ca/player/News/TV+Shows/The+Exchange+with+Amanda+Lang/ID/2663453390/

Dr. Fred Lazar and Dr. Eli Prisman, from the York University Schulich School of Business conclude in a recent study that for the period 2001 to 2013 consumers in Ontario have likely overpaid for auto insurance by between $3 and $4 billion.

I don't know if they studied M/C insurance. Auto has a bigger pool and is of more public interest.

I didn't think we had a million coverage in medical benefits.
 
http://www.cbc.ca/player/News/TV+Shows/The+Exchange+with+Amanda+Lang/ID/2663453390/

Dr. Fred Lazar and Dr. Eli Prisman, from the York University Schulich School of Business conclude in a recent study that for the period 2001 to 2013 consumers in Ontario have likely overpaid for auto insurance by between $3 and $4 billion.


This right here pretty much destroys that anonymous insurance brokers story. You pay more in ontario because of ohip and this and that.... nope you pay more because the insurance companies are ripping everyone off.
 
article cites that catastrophic injuries get more money and thats why ont. ins. is expensive. the requirements to meet a catastrophic injury are intense. as in no longer able to look after yourself indepentently.
 
article cites that catastrophic injuries get more money and thats why ont. ins. is expensive. the requirements to meet a catastrophic injury are intense. as in no longer able to look after yourself indepentently.

And let's not forget the ads running on Radio right now, saying that the Ont Fiberals are going to be lowering the amount one with a catastrophic injury is entitled to by $1 million. So I am sure we sill see our rates reduced by 50% as that would represent a 50% reduction in payout costs..lol Your NOT automatically entitled to $1 million in accident benefits either. As I found out and have been fighting, unles you can show significantinjuries your automatically placed in the MIG, (Minor Injury Guidelines), meaning your entitled to $2500 in treatment anything about that your lawyer has to fight tooth and nail for. Even though my policy shows $50,000 accident injury benefits they insurer will fight to keep in the MIG.
 
Man, these insurance people need to have a meeting an get their stories straight. My insurance broker told me that premiums are so high because of fraud. No mention of ohip or crashes or legit claims. I was talking to him about motorcycles and I think he was talking cars, but still. If that's the case (not mentioned in the article) We shouldn't have to pay for their bad policies.
It's like if a store got robbed, if they upped their prices they wouldn't sell ****. People would go elsewhere. Insurance companies rates are all pretty much in the same range, give or take a couple hundred bucks a year. Why is that? So what's really going on? Seems fishy...
 
I don't know if they studied M/C insurance. Auto has a bigger pool and is of more public interest.

I didn't think we had a million coverage in medical benefits.
I think the pool part is ****ing ********, because a few years ago when I was in a car accident. I had to make an accident benefit claim against my motorcycle insurance policy.

So i'm paying into my motorcycle policy, and it paid out for a separate car accident claim?
 
firstly,

what about having to pay for EACH vehicle?? IF someone owns multiple motorcycles or cars, why must they pay for all the vehicles that they don't drive? how do they explain that?

if someone has 2 motorcycles, but only 1 license holder in the house, it costs thousands per motorcycle. That doesn't make sense.

the entire system is based on generating money for corporations and the province. Everything from insurance to HTA and traffic enforcement by the police.

Second,

in Ontario, the entire licensing system is based on insurance. Demerit points are meaningless. Anyone getting pinged with tickets etc, is more likely to be unable to afford insurance to drive than to actually lose their license from accumulated demerit points.

The system as a whole makes me sick. Insurance, police, HTA and the province. and frankly have no idea how things could possibly change for the better.
 
This is so wrong though. You CAN compare similar products, including accident benefits, and it WILL come out cheaper.

Even if auto providers won't cover it, I could pay for private health insurance that covers all the stuff covered by accident benefits, plus the pennies for actual auto insurance, and come out MILES ahead. Talking thousands of dollars saved, and that's probably BETTER coverage.

Add to that the *ridiculous* fact that for having 2 bikes and a car, well I'm paying for 3 full policies of accident benefits. I almost wouldn't mind the premiums if I could just insure me, the driver, to just drive whatever I own.
 
This is so wrong though. You CAN compare similar products, including accident benefits, and it WILL come out cheaper.

Even if auto providers won't cover it, I could pay for private health insurance that covers all the stuff covered by accident benefits, plus the pennies for actual auto insurance, and come out MILES ahead. Talking thousands of dollars saved, and that's probably BETTER coverage.

Add to that the *ridiculous* fact that for having 2 bikes and a car, well I'm paying for 3 full policies of accident benefits. I almost wouldn't mind the premiums if I could just insure me, the driver, to just drive whatever I own.

Yes my though exactly . Why pay for benefit for each vehicle . Except for maximum profit I should be able to insure myself for benefits .Not pay several premiums for the same product .
 
I think the pool part is ****ing ********, because a few years ago when I was in a car accident. I had to make an accident benefit claim against my motorcycle insurance policy.

So i'm paying into my motorcycle policy, and it paid out for a separate car accident claim?

One would think that a flow chart could show vehicle insurance as a simple one-two-three series of blocks. The reality is it makes so many jogs, turns, crossovers and switchbacks it would break a snake's back to follow it.

Accident benefits cover the named owner and his/her family plus passengers or anyone else driving the vehicle. Also the named doesn't have to be in the vehicle to get coverage as long as it is a vehicle accident. i.e. as a pedestrian hit by a car.

The biggest problem is that insurance has become so complex that many people accept whatever the broker tells them without challenge or thought. "I paid money so I'm covered" They are WRONG.

People are stupidly focused on the wrong things. They go full out to get collision, comp etc on their ten or twenty thousand dollar bike because they don't want to lose that money in case of an assident* but ignore the medical costs for themselves, medical costs that could be 100 times the bike value.

* assident was a typo but reflecting on the subject I decided this spelling is more appropriate.

Let's say you go down the the states where assident benefits aren't compulsory, switch bikes with a local and you both crash. You get benefits because you are named on a policy and he gets benefits because he was legally driving your bike. Where does that money come from?

BTW motorcycle insurance isn't covered in the proposed insurance premium reductions as bikes are considered recreation vehicles.

The business is too adversarial. They're trying to screw us because we're trying to screw them, or is it the other way round?

The government is trying to screw us while making it look like they're screwing the insurers.
 
I just can't get past the multiple policy thing. If accident benefits is coverage on me (for ANY vehicle accident) why do I have to pay it x times over?

Literally every dollar of a multi-vehicle policy, after the first one, is gravy. My 3 vehicles means my insurance company is operating at 200% profit over cost (risk), at least.

Oh sure, I get what, 40% off my bike policies because I have the car with them? Still all gravy.
 
Everyone loves to complain about insurance costs... up until the point where they actually need to make a claim.
Try pricing out the cost of an accident on your own - it's jaw dropping.
 
Everyone loves to complain about insurance costs... up until the point where they actually need to make a claim.
Try pricing out the cost of an accident on your own - it's jaw dropping.

That's the silliest argument. Of course it's a lot, that's why we have insurance and bear the costs across everyone.
 

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