Facility Rate Change | GTAMotorcycle.com

Facility Rate Change

Aleks Hara

Well-known member
Quick heads-up for any riders insured through the Facility Association.

"Facility Association has received approval from the Financial Services Commission of Ontario (FSCO) for an increase in Motorcycle rates effective February 1, 2012 new business and April 1, 2012 renewals in Ontario. Overall, the rate change is 10.7% increase for Motorcycles, although policies may vary depending on individual circumstances."

http://www.facilityassociation.com/manurulesrateson.asp (second link "As of February 1st...)

 
I'm sure some who are insured by the Facility Association (If they know it) appreciate the heads up. What are you suggesting they do about it?
 
I'm sure some who are insured by the Facility Association (If they know it) appreciate the heads up. What are you suggesting they do about it?

Make plans for an alternate mode of transportation??
 
E-bikes :D
 
thanks for the heads up, looks like i am getting my new insurance RIGHT NOW for this year before the price increase
 
In most cases, if a rider is with Facility, it's usually because the rates are significantly cheaper there than in the other markets (provided the broker and client checked all available rates). The 10% average increase then shouldn't affect retention rates too much, but I am always a bit skeptical as to how this average is calculated. In my experience, the company can target certain aspects of their book of business, such as territories, age groups, CC's, etc... where they feel they need to increase premium due to claims. These increases could be 20%, while other, more "profitable" risks don't go up at all - resulting in the 10% average increase. All we can do is wait and see how this pans out, but my feeling is that Facility will continue to remain competitive in their target market.
 
IIRC, Facility is not a bad deal (relatively speaking) for supersports if you can't get a policy with SF or TD. Their surcharges are a bit less unreasonable than most of the other insurers.
 
In most cases, if a rider is with Facility, it's usually because the rates are significantly cheaper there than in the other markets (provided the broker and client checked all available rates). The 10% average increase then shouldn't affect retention rates too much, but I am always a bit skeptical as to how this average is calculated. In my experience, the company can target certain aspects of their book of business, such as territories, age groups, CC's, etc... where they feel they need to increase premium due to claims. These increases could be 20%, while other, more "profitable" risks don't go up at all - resulting in the 10% average increase.

What's there to be skeptical about? It's an "average" increase, not a Base Rate increase. So for example, the following book of five clients would have an overall rate change of +3%, but the individual rate changes may vary as follows:

Policyholder 1: $1000 --> $1100 (10% increase)
Policyholder 2: $1000 --> $900 (10% decrease)
Policyholder 3: $1000 --> $1000 (no change)
Policyholder 4: $1000 --> $1200 (20% increase)
Policyholder 5: $1000 --> $1100 (10% increase)
All Policyholders: $5000 --> $5300 (3% increase)


All we can do is wait and see how this pans out, but my feeling is that Facility will continue to remain competitive in their target market.

Facility doesn't really have a "target market" -- they're just the residual (and typically not profitable) risks that don't meet the eligibility criteria for a standard insurer. It exists in order for the insurance industry to comply with the take-all-comers rule. The FA losses are shared by the industry. If the FA is implementing a whopping 10.2% increase, you can bet that a lot of people in the typical high-risk "FA demographic" will see some very large increases.
 

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