Should I discuss linear premium earning scale applied to my motorcycles by MM? | GTAMotorcycle.com

Should I discuss linear premium earning scale applied to my motorcycles by MM?

robmack

Well-known member
In another thread, I found the following table which shows the premium earning schedule for motorcycles used by TD/MM/Primmum:


  • JAN: 0.0%
  • FEB: 0.0%
  • MAR: 5.0%
  • APR: 10.0%
  • MAY: 10.0%
  • JUN: 20.0%
  • JUL: 20.0%
  • AUG: 20.0%
  • SEP: 10.0%
  • OCT: 5.0%
  • NOV: 0.0%
  • DEC: 0.0%

I switched from TD/Primmum to TD/MM this week to leverage a better group rate and earn a better discount on my premiums. I have a multi-line discount as well by including car and home in addition to the two motorcycles.

When came time to discuss premium scheduling, MM explained they will charge first and last on the initial payment and regular linear scale premiums on the remaining 11 months for the motorcycles. This goes counter to the scale published above. I would have expected premiums for the motorcycles to begin in March according to the scale above.

Furthermore, when I talked with Primmum about returning already paid premiums for unused insurance, they gave me nothing in return for the motorcycles stating the season was over, in line with the chart above.

Is there any advantage (or disadvantage) to me discussing the premium scale for the motorcycles with MM or let matters remain as they are?
 
I believe because you have other products, (house and car), they simply spread the premium for the bikes out over the 12 months. Not sure why it makes a difference to you if they follow the chart above. The total amount paid will remain, the same. It is just rather than pay say $50 a month for 7 months of preimiums, you will be paying $42 per month spread out over 12 months. It all works out the same in the end.
 
Linear billing is easier to implement for the company and easier for most consumers to understand. The misunderstandings occur when you wish to stop insurance at specific times of the year. As long as you understand that your insurance premiums are not linear but your billing rates are, you'll be fine.
 
With Primmum, my billing rates were proportional to the premium schedule; they started in Feb and ended in Oct and were non-linear. With MM it's different. That's OK so long as we are both in agreement with the intent. I'd only be worried that if I cancelled mid-year, that I'd end up out of pocket because they would calculate my actual premium paid according to the non-linear premium earning schedule. Depending on the time of year that I cancel, I will have paid more of the premium YTD that required.
 
You have to consider there is a different method to how premiums are calculated when compared to how they are paid.

Insurance is typically a one year term. And generally it's expected to be purchased in one lump sum before the effective date of the policy.

For motorcycles in Canada, the premium is allocated as shown from the OP.

When paying for the policy, there are payment options. They don't follow how the premium is allocated through out the year.

Think of it more as financing the annual premium over a term they set. Could be three equal payments, one lump sum or equal monthly etc.




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