State Farm renewal raises my Super Sport rate 275% on BMW

It must be tough to be a motorcycle dealer in Ontario, above and beyond the relatively short riding season. Over the years there was always the threat that insurance rates would kill some segments like the super sport. This may have finally happened.

And don't confuse deaths per 100,000 as an indication of loss frequency. Insurance companies don't care about you writing your life or your bike off on a claim, cause it is a one time event and is inconsequential to the greater risk. What they are concerned with are someone(s) getting injured and needing life long care. That can total hundreds of thousands of $.

If be interested to know what the profit margins are on bikes, but considering there's quite a few large and glitzy dealers who don't seem to be struggling, I suspect they're not exactly razor thin. Yes, a lot of smaller shops have closed, but I guess there's strength in size, and follow up cash in service and accessories is probably a large part of the equation to success.

I I think the cruiser market is probably a good example of that. Look at the fancy HD dealers, and the crazy price tags on some of those bikes and tell me the dealers aren't making out with a healthy margin on each bike.

Would be interesting to see what SF and Desjardins are doing with the cruiser rates. Presumably they are making the move as a business decision to effectively kill their market share on SS bikes. One would think they would look to recver some business in other areas. I know two years when I last switched other insurers, including dejardin told me they couldn't even come close to touching the rate I got with TD, as TD was "aggresively" pursuing the cruiser market. My policy renews with TD end of Jan, I called yesterday, they couldn't tell me what the rate was going to be but I "would get my renewal by mid Dec". We will see.

hedo2002 said:

Would be interesting to see what SF and Desjardins are doing with the cruiser rates.

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I conversed with my SF agent back in late October when she told me of impending rate hikes in the spring. In an email she wrote

"...I just heard snippets yesterday. Harleys are going up tremendously as are some sport bikes. But I don’t have any firm particulars unfortunately..."

We've not conversed since then. I'll be in touch with her in the new year to see if she has any additional details.

I'm not sure if by "Harleys" she meant only Harleys would be affected or if all cruisers of similar architecture would be hit.

Insurance in Ontario is the biggest scam I can possibly think of. So the government makes a law that says you MUST insure your road vehicle to use it on the road, but it doesn't regulate the prices that the insurance companies charge the public. First of all, I don't understand why different companies have different rates for the same vehicle and driver profile. The government regulatory bodies should be stepping in to say for this type of vehicle and driver profile, this is the rate you're going charge! +/- say $100/year depending on types of services the company offers. How can different companies quote the same driver and vehicle by a difference in the thousands?!They leave this market unregulated, and what do the insurance companies do? They get together and agree to charge whatever they want on these types of "dangerous" vehicles to deter people from insuring them and just sell insurance to people with vehicles who will likely never need it.

This would be like a health insurance company refusing to insure sick and old people because they are more likely use health services...


The idea of insurance is to help people recover their losses by spreading the cost over many insured individuals, not to have a corporation make millions each year by the insuring a select group of low risk individuals and refusing services to everyone else.

Rossi86 said:

but it doesn't regulate the prices that the insurance companies charge the public.

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It does. It can take months for an insurance company that actually wants to give a break to it's customers to get approval to actually do so. This over-regulation is actually being proven as part of the problem, read on...

Rossi86 said:

This would be like a health insurance company refusing to insure sick and old people because they are more likely use health services...

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Ummm...they do. Get sick and then try to get insurance. Or get old and try to find insurance (and not the "no health questions asked!" insurance that is basically a joke and pays so little it's virtually a waste of money) that doesn't come with plenty of health questionnaires and medical paperwork and even if you get approved will cost you a tidy sum. And that's if you make it through the screening - plenty don't.

Our insurance system here has problems, that's for sure...but a lot of it has to do with fraud, so like my signature line says, a lot of people need to look themselves in the mirror and see if they're part of the problem. Want to read about it before someone inevitably claims I just pulled that fact out of my *** and am just defending the big corporate insurance "scam"? Read up: http://business.financialpost.com/f...ontarios-auto-insurance-system-is-a-car-wreck

It's being worked on: http://www.theglobeandmail.com/repo...needs-to-put-consumers-first/article27498075/

Provinces which have government operated insurance actually have dramatically lower rates than we do here in Ontario, ironically. Look at ICBC's rates, for example. Of course, there's a wide assortment of people who scream that the government should stay out of things (less government, not more!) so they are effectively fighting against this sort of thing that could potentially cut their insurance rates in half. Government is always bad, right?

But, in the end, as I've mentioned in this thread and others, it still comes down to risk. If a group that has proven themselves risky vehicle operators wants coverage you're still going to pay more than a known less risky group (the old SS vs cruiser argument we don't need to rehash again), so don't ever expect to insure your SS for the same as what I pay for my cruiser - we might both just pay less if our insurance system was fixed (and fraud was reduced), but SS riders will still be paying more because you are inherently and statistically riskier to insure.

Rossi86 said:

The idea of insurance is to help people recover their losses by spreading the cost over many insured individuals, not to have a corporation make millions each year by the insuring a select group of low risk individuals and refusing services to everyone else.

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Nobody is refusing coverage to anyone at this point unless you have a risk profile that makes you virtually uninsurable (AKA you have many speeding tickets, criminal convictions, licence suspensions, insurance cancellations, etc), and even then you don't need to look far to find people here that managed to get quotes, albeit ones that are in the stratosphere..but they're not getting denied, they just can't afford what they're being offered usually due to their own actions.

The facility association will insure most high-risk individuals that fit into the above group I listed. You're just not going to like the rates, that's all..but again, actions have consequences.

And as mentioned, rampant fraud in this province has a lot to do with our insurance woes as well.

PrivatePilot said:

It does. It can take months for an insurance company that actually wants to give a break to it's customers to get approval to actually do so. This over-regulation is actually being proven as part of the problem, read on...



Ummm...they do. Get sick and then try to get insurance. Or get old and try to find insurance (and not the "no health questions asked!" insurance that is basically a joke and pays so little it's virtually a waste of money) that doesn't come with plenty of health questionnaires and medical paperwork and even if you get approved will cost you a tidy sum. And that's if you make it through the screening - plenty don't.

Our insurance system here has problems, that's for sure...but a lot of it has to do with fraud, so like my signature line says, a lot of people need to look themselves in the mirror and see if they're part of the problem. Want to read about it before someone inevitably claims I just pulled that fact out of my *** and am just defending the big corporate insurance "scam"? Read up: http://business.financialpost.com/f...ontarios-auto-insurance-system-is-a-car-wreck

It's being worked on: http://www.theglobeandmail.com/repo...needs-to-put-consumers-first/article27498075/

Provinces which have government operated insurance actually have dramatically lower rates than we do here in Ontario, ironically. Look at ICBC's rates, for example. Of course, there's a wide assortment of people who scream that the government should stay out of things (less government, not more!) so they are effectively fighting against this sort of thing that could potentially cut their insurance rates in half. Government is always bad, right?

But, in the end, as I've mentioned in this thread and others, it still comes down to risk. If a group that has proven themselves risky vehicle operators wants coverage you're still going to pay more than a known less risky group (the old SS vs cruiser argument we don't need to rehash again), so don't ever expect to insure your SS for the same as what I pay for my cruiser - we might both just pay less if our insurance system was fixed (and fraud was reduced), but SS riders will still be paying more because you are inherently and statistically riskier to insure.



Nobody is refusing coverage to anyone at this point unless you have a risk profile that makes you virtually uninsurable (AKA you have many speeding tickets, criminal convictions, licence suspensions, insurance cancellations, etc), and even then you don't need to look far to find people here that managed to get quotes, albeit ones that are in the stratosphere..but they're not getting denied, they just can't afford what they're being offered usually due to their own actions.

The facility association will insure most high-risk individuals that fit into the above group I listed. You're just not going to like the rates, that's all..but again, actions have consequences.

And as mentioned, rampant fraud in this province has a lot to do with our insurance woes as well.

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Yes I am aware of health insurance and how they charge, but this is what I am pointing out in both health and automobile insurance. The idea is to have the cost spread over a large group of individuals rather than make insurance unattractive to the ones who need it, so the corporation can maximize profits each year. These 2 services are almost a necessity at this day and age, so they should be government operated to keep the costs low and whatever profits are made should be going back to the tax payers (i.e the government uses that money for the benefit of the public)not to some corporate that's going to run this in pure maximum profit business model and walk away with the money.

Since Canada has a universal free healthcare system, imagine if the government started taxing sick and old people more because they are likely to use the services? If you applied the current business model of automobile insurance to our taxes system by taxing each individual according to what they are likely to cost to the government, Canada would be a miserable place to live in

Either way you spin it, insurance only functions because people who don't use the service pay for the people who use it!

And the other point was that if someone's insurance policy is increased by 3+ fold in a matter of months, through no fault of his/her own, just because another company is taking over how is this even legal? Where are the government regulations here?

Rossi86 said:

they should be government operated

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As I touched on in my last response, I find it ironic that many people who often exclaim loudly that the government should get out of the business of many things in our lives and leave them to free enterprise (because of the universal, albeit often unfounded assumption that private enterprise can do things faster/cheaper/better) often argue FOR more government intervention when that assumption proves untrue.

Actually, the government does tax old people more, (By the mere fact that Canada's median age has increased, and typically older people make more income), the government collects more tax from older people then it does from 20 somethings making minimum wage. Therefore in essence older people tend to cover more of the health care costs, than do 20 somethings.

As for your other assertions. It is illegal for a person to be deined insurance. But there is NOTHING that says that insurance has to be tailored to fit their budget. As already stated if you have a terrible record, or you buy a high risk vehicle not all insurers are compelled to insure you, and you may be forced to go to the facility market, but you "can" get insurance.

At this point, Desjardins, (in taking over SF book of business), has made a business decision that they don't wish to continue with one particular line, (SS bikes, and POSSIBLY Harleys). Most young SS riders flocked to SF as they were seen as the "cheapest alternative" for that class of vehicle. Well now Desjardin has decided they don't want, or need that book of business. They haven't stated that they will NOT insure SS riders, but rather they are bringing their pricing models more in line with what others have been charging for a long time. They may be higher than other companies right now, But we may also see those other companies raise their rates as renewals come in.

The government regulates insurance in that they have stated that we as operators MUST have insurance and that insurers MUST offer insurance to everyone who has a valid driver's licence. The regulations do NOT say that it must meet our budget. Would I like to pay less certainly. But I also make my vehicle buying decisions taking into account the cost to insure a vehicle I am looking at. Once I have a vehicle in mind BEFORE I make the deal I call my insurer, and some others to get a quote if insurance is insane on that vehicle, then I don't go that route and seek alternatives.

Rossi86 said:

Yes I am aware of health insurance and how they charge, but this is what I am pointing out in both health and automobile insurance. The idea is to have the cost spread over a large group of individuals rather than make insurance unattractive to the ones who need it, so the corporation can maximize profits each year. These 2 services are almost a necessity at this day and age, so they should be government operated to keep the costs low and whatever profits are made should be going back to the tax payers (i.e the government uses that money for the benefit of the public)not to some corporate that's going to run this in pure maximum profit business model and walk away with the money.

Since Canada has a universal free healthcare system, imagine if the government started taxing sick and old people more because they are likely to use the services? If you applied the current business model of automobile insurance to our taxes system by taxing each individual according to what they are likely to cost to the government, Canada would be a miserable place to live in

Either way you spin it, insurance only functions because people who don't use the service pay for the people who use it!

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Rossi86 said:

The idea is to have the cost spread over a large group of individuals rather than make insurance unattractive to the ones who need it, so the corporation can maximize profits each year.

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Why should drivers with decent driving/riding records operating proven lower-risk vehicles subsidize the insurance rates of those who have poor driving/riding records who choose to operate vehicles with a proven high rate of claims?

With Statefarm since 2004. Moved my car out last year and saved about 2K/year.

My bike is still with them for now. Paying 900/year. If it goes up by any significant margin, I'll move it out to Meloche.

griff2 said:

Why should drivers with decent driving/riding records operating proven lower-risk vehicles subsidize the insurance rates of those who have poor driving/riding records who choose to operate vehicles with a proven high rate of claims?

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Exactly. I know the younger crowd feels they're being "taken for a ride" by the insurance companies, but the reality is (no matter how much they wish to deny it) is that they're riskier, have less experience, sometimes do stupid things, and have more accidents as a result of all that put together. There's a reason insurance gets drastically cheaper when you hit 25 - that's about the time that most post-teen adults realize they don't actually know everything nor are they invincible, and they typically do stupid risky things much less often.

So yes, I agree - I (at 40+ years of age and with a spotless driving record) driving my econobox commuter car don't want to be subsidizing the 18 year old with the (often poorly and often dangerous) modified Honda who has 3 speeding tickets already, 1 accident, and thinks that every time he puts the keys in the ignition his driving needs to be a facsimile of a Fast and Furious movie scene.

PrivatePilot said:

Exactly. I know the younger crowd feels they're being "taken for a ride" by the insurance companies, but the reality is (no matter how much they wish to deny it) is that they're riskier, have less experience, sometimes do stupid things, and have more accidents as a result of all that put together. There's a reason insurance gets drastically cheaper when you hit 25 - that's about the time that most post-teen adults realize they don't actually know everything nor are they invincible, and they typically do stupid risky things much less often.

So yes, I agree - I (at 40+ years of age and with a spotless driving record) driving my econobox commuter car don't want to be subsidizing the 18 year old with the (often poorly and often dangerous) modified Honda who has 3 speeding tickets already, 1 accident, and thinks that every time he puts the keys in the ignition his driving needs to be a facsimile of a Fast and Furious movie scene.

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Why not? Should we kick people out of OHIP coverage once they reach a certain age where they're more susceptible to illness? I mean, it's not really fair that a young person has to pay for an aging population with so much bias in payments going towards the old.

I as someone reaching 40 don't mind subsidising the stupid and immature youngsters...I paid my dues coming up and now am in a position to share the spread.

xfactor said:

Why not? Should we kick people out of OHIP coverage once they reach a certain age where they're more susceptible to illness? I mean, it's not really fair that a young person has to pay for an aging population with so much bias in payments going towards the old.

I as someone reaching 40 don't mind subsidising the stupid and immature youngsters...I paid my dues coming up and now am in a position to share the spread.

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I think you should read Hedo's response a few posts up because it's insightful as to the first part of your response. You might be surprised at exactly how much tax the older crowd pays, particularly if they were financially savvy and saved up a nice retirement kitty.

And speak for yourself with regards to being willing to pay more to subsidize the young crowd. I vividly remember paying $250/month to insure my first car and I quite like paying $40/month to insure my car now, thank you very much. If you've got a few extra thousand dollars to willingly toss at your insurance company every month so that the Fast and Furious Honda kid can get his rocks off on the cheap, well, I don't think you'd find many willing to do the same. Certainly not me.

xfactor said:

I as someone reaching 40 don't mind subsidising the stupid and immature youngsters...I paid my dues coming up and now am in a position to share the spread.

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We all do that, right? Most, if not all of us went through a public school system paid for by a previous generation. Not it's our turn and I agree; it's way our system works and it's the way insurance works.

A huge problem here in Ontario is that fraud appears to be so much more rampant compared to other places. Or, if not outright fraud then something is definitely wrong. For example, a Financial Post article from May of this year reads, in part:

"According to the industry’s official statistics agency, the average bodily injury claim (in Ontario) came to $143,630. By comparison, the average in Alberta is $12,785. The average accident benefit payout was $31,785 in Ontario, compared with $7,895 in Nova Scotia and $3,766 in Alberta."

As an insurance industry insider mentioned in the story says, there an unfettered abuse by "...participants within the accident benefits claims economy..." in Ontario.

Of course part of the problem for sure is risky behavior of certain demographics but that's not the only problem. After all, it's not like Alberta doesn't have any 20 year old supersport riding motorcyclists. People riding like asshats has already been established as a problem for us all but this is a bigger problem affects the entire industry. The question is does the government -- or any future government -- have the political will to end claims abuse and to shut down this sub-economy that thrives on fraud?

PrivatePilot said:

I think you should read Hedo's response a few posts up because it's insightful as to the first part of your response. You might be surprised at exactly how much tax the older crowd pays, particularly if they were financially savvy and saved up a nice retirement kitty.

And speak for yourself with regards to being willing to pay more to subsidize the young crowd. I vividly remember paying $250/month to insure my first car and I quite like paying $40/month to insure my car now, thank you very much. If you've got a few extra thousand dollars to willingly toss at your insurance company every month so that the Fast and Furious Honda kid can get his rocks off on the cheap, well, I don't think you'd find many willing to do the same. Certainly not me.

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There isn't more "older" people in Canada than younger.
http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/demo10a-eng.htm

So this might be an issue on definition of what is young and what is old.

Look at the spirit of the argument. Insurance and coverage is a cooperative, so the less risky policies subsidises the higher risk polices. That's always been the basic formula, so not sure what you're trying get across?

The sampling assumes old geezers who're scared of their own shadows, risky teenagers full of hormones, house wives and johnny punch clocks, you get the idea... So yea, everyone pays and the riskier pays a little more and the less riskier little less. All I'm saying is that I'm happy to be part of that system as it was beneficial to me when I was younger.

I was actually asking my SF agent regarding prices for SS, gsxr 600 in particular and she quoted me ~2500 for a year with M2 previous season, 27 years old, 9 years since G and no tickets/claims. That's more than what I pay for my car but riding a motorcycle carries a bigger risk..especially in some parts of GTA.

Blackfin said:

We all do that, right? Most, if not all of us went through a public school system paid for by a previous generation. Not it's our turn and I agree; it's way our system works and it's the way insurance works.

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Not sure that's a fair comparison at all. It doesn't cost more to put Kid "A" through school vs Kid "B", it effectively (unless you want to get into special needs and such which are outside the scope of this debate) all costs the same and there's no inherent risks involved that make one kid more costly than the other to educate, so the Ferrari vs Cavalier, 16 years old vs 25 argument doesn't really translate IMHO.

In my head I keep coming back to the other hot thread right now on the kid who got caught red-handed with 172. Some time down the road when he gets his bike and licence back and wants to go out and try to get insurance again I don't want to be subsidizing his rate - HE made his choices and HE can now pay for them. I made mostly wise choices when I was young, continue to do so to this day, and am quite enjoying the benefits accordingly. I have absolutely zero interest in paying a bunch of extra money every month to subsidize the bad choices of people like that.

And yes, I realize I'm painting with a broad brush here so far as younger drivers - not all are clueless testosterone enraged rice boys who want to race at every stoplight, but they are still statistically proven to be risker, and I think we are talking about a segment of the young insured who have racked up a record, not those who are actually conscientious drivers who have maintained a clean record and will probably continue to. It's rather ironic given the discussion, but I bet if you talked to an underwriter it's those kids (who are driving conscientiously) who are effectively subsidizing their peers who are the aforementioned Fast and Furious freaks...but we shouldn't be placing that burden on a whole different age range, experience level, and risk category of drivers who paid their money and did their "time" when they were younger themselves.

I paid over $400/month to insure my 83 Yamaha Seca900 (which was considered a SS back then) when I started riding in 1993. I in no way felt that gramps living nextdoor driving his Buick Century somehow should be obliged to "chip in" and help me pay for my privilege of enjoying what was effectively a luxury for me at the time.

xfactor said:

Look at the spirit of the argument. Insurance and coverage is a cooperative, so the less risky policies subsidises the higher risk policies. That's always been the basic formula, so not sure what you're trying get across?

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No. Less risky policies do not subsidize more risky ones. They all pay into the same insurance pool, but those deemed to be of greater risk pay more into the insurance pool as they are deemed to be more likely to draw from that pool.

A real good example of this is in the private supplemental medical and benefits insurance business. The rates for my private Sun Life supplemental medical and dental coverage is based on demographics - older pay more than younger, smokers more than non-smokers, men more than women. It all goes into the same insurance pool, but those who are more likely to draw from it will pay more, and as one gets older substantially more.

Vehicle insurance is no different. Those more likely to draw from the pool will pay more into it, and that is as it should.

Comparing this to public education or basic health care is a non-starter. There is a societal interest in having a healthy and educated populace. There is no corresponding societal benefit to making it affordable for the most inexperienced or irresponsible drivers/riders to be able to afford insurance on a high-powered or otherwise high-risk vehicle.