Am I getting hosed?!?! | GTAMotorcycle.com

Am I getting hosed?!?!

jiggatwist

jiggatwist

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Hi All,

Wondering if I could get some insight with regards to my renewal. Going to be difficult to swallow this with the recent crap weather we've been having so far!

Age: 24 (25 in Jan, Yea!)
Bike: 2000 GSXR 600.
Add: Eglinton / Mt. Pleasant
M: Since May 09; Rider Training Course.

The Bad: 1 minor. (Comes off in Aug. this summer.)
Current Renewal quote with Nordique: $3165....WTF?!

I could throw a Truck and Contents Ins. on a bundle plan too.
 
jiggatwist said:
Hi All,

Wondering if I could get some insight with regards to my renewal. Going to be difficult to swallow this with the recent crap weather we've been having so far!

Age: 24 (25 in Jan, Yea!)
Bike: 2000 GSXR 600.
Add: Eglinton / Mt. Pleasant
M: Since May 09; Rider Training Course.

The Bad: 1 minor. (Comes off in Aug. this summer.)
Current Renewal quote with Nordique: $3165....WTF?!

I could throw a Truck and Contents Ins. on a bundle plan too.
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Thats not too bad. I don't know many people who have insurance for ss bikes before 25 though. It should be cut in half at that point.
 
$3165 full coverage?
 
Isnt Nordic a branch off facility?
 
SS Insurance is expensive for people under 25yo. Get a quote with State Farm, as they will likely be the most competitive for you.
 
VifferFun said:
SS Insurance is expensive for people under 25yo. Get a quote with State Farm, as they will likely be the most competitive for you.
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Working for SF I would normally agree with you. but the ticket is what's really going to hurt your rate. once it comes off though If you were to bundle everything with SF I'm sure you could get a very competitive rate!
The good thing with SF which I don't think any other insurer does is that once your bday hits your rate changes to the 25+ rating whereas I've heard about other companies they make you wait until your renewal before applying 25+ rates.

but please don't let my pessimistic response deter you from calling them up!
From what I've heard through the grapevine is that State Farm is having a slight Rate decrease with bikes sometime in the near future.

I hope i'm not saying to much...Just trying to help fellow riders :p
 
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Dsquintz said:
Working for SF I would normally agree with you. but the ticket is what's really going to hurt your rate. once it comes off though If you were to bundle everything with SF I'm sure you could get a very competitive rate!
The good thing with SF which I don't think any other insurer does is that once your bday hits your rate changes to the 25+ rating whereas I've heard about other companies they make you wait until your renewal before applying 25+ rates.

but please don't let my pessimistic response deter you from calling them up!
From what I've heard through the grapevine is that State Farm is having a slight Rate decrease with bikes sometime in the near future.

I hope i'm not saying to much...Just trying to help fellow riders :p
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The minor conviction will hurt (because I believe he loses the convictions-free discount and gain a conviction surcharge), but it still might be better than SF's competitors.
 
Dsquintz said:
but please don't let my pessimistic response deter you from calling them up!
From what I've heard through the grapevine is that State Farm is having a slight Rate decrease with bikes sometime in the near future.
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I wish they rather keep the auto rates stable. Got a renewal letter with 25% rate increase .... In my opinion SF must be bleeding more than any other insurer. I've also heard from a birdie that the fact that they are the only insurance company acting as a mutual fund makes them the least able to balance their losses when they occur. I am not an expert, but the fact that they are going through second (large) increase in 6 months suggests that their losses are higher if not the highest on the market. I am also disappointed that they have shown zero loyalty to their "healthy" customers yet they play the loyalty card if I hint that my business will be taken elsewhere. It's not a one way street as they think.
 
mxs said:
I wish they rather keep the auto rates stable. Got a renewal letter with 25% rate increase .... In my opinion SF must be bleeding more than any other insurer. I've also heard from a birdie that the fact that they are the only insurance company acting as a mutual fund makes them the least able to balance their losses when they occur. I am not an expert, but the fact that they are going through second (large) increase in 6 months suggests that their losses are higher if not the highest on the market. I am also disappointed that they have shown zero loyalty to their "healthy" customers yet they play the loyalty card if I hint that my business will be taken elsewhere. It's not a one way street as they think.
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Your 25% increase will be MUCH higher than average . . . your specific risk profile must have been hit from more than one angle. State Farm is a mutual insurance company, not a mutual fund (i.e. the policyholders are essentially shareholders).
 
VifferFun said:
Your 25% increase will be MUCH higher than average . . . your specific risk profile must have been hit from more than one angle. State Farm is a mutual insurance company, not a mutual fund (i.e. the policyholders are essentially shareholders).
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There's no other angle than where I live. I think it is outrages that because where I live, they'd try to hike my rate by 25%. My record is spotless with zero claims ever riding and driving generally unattractive vehicles.

So it does make SF different than others, correct? Or do you know of other mutual insurance company on our market, so I can stay away from them? I refuse to be penalized for mistakes of others or for the fact where I live (mind you I probably spend more kilometeres driving elsewhere, but that's for another debate ....).
 
mxs said:
There's no other angle than where I live. I think it is outrages that because where I live, they'd try to hike my rate by 25%. My record is spotless with zero claims ever riding and driving generally unattractive vehicles.
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State Farm would not implement a 25% rate increase to your territory . . . FSCO would never allow it. Although you may not have made claims, State Farm must have made adjustments to more than one of your rating factors (for example, your age group might have seen an increase, as well as older vehicles, and perhaps your territory).

mxs said:
So it does make SF different than others, correct? Or do you know of other mutual insurance company on our market, so I can stay away from them? I refuse to be penalized for mistakes of others or for the fact where I live (mind you I probably spend more kilometeres driving elsewhere, but that's for another debate ....).
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There are lots of mutual insurance companies, but they are no less capable of balancing rates than a non-mutual. ALL insurance companies will increase your rates if the overall cost of claims is increasing. Although you haven't made a claim, the expected cost of your future claim is increasing with the rapid claims inflation (which includes both economic AND even more social inflation).
 
VifferFun said:
State Farm would not implement a 25% rate increase to your territory . . . FSCO would never allow it. Although you may not have made claims, State Farm must have made adjustments to more than one of your rating factors (for example, your age group might have seen an increase, as well as older vehicles, and perhaps your territory).
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I don't really care what their reasons are (I know I have not deserved and refuse to accept that I am paying for mistakes of others), my wallet needs to come up with 25% more money than last term. Goodbye State Farm.

What's also puzzling is how someone who I have not been a customer of in the last 3 years is giving me a rate so much better than State Farm, which basically does prove to me that SF is trying to penalize me unfairly. Anyways, no big deal, it's good to at least have a choice in this Ontario insurance mess which I am sure makes sense to a very few people.

The elections cannot come fast enough ....

There are lots of mutual insurance companies, but they are no less capable of balancing rates than a non-mutual. ALL insurance companies will increase your rates if the overall cost of claims is increasing. Although you haven't made a claim, the expected cost of your future claim is increasing with the rapid claims inflation (which includes both economic AND even more social inflation).
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Why would I personally be more likely to make a claim (I have not done so once, ever ...)???? The people who claim and have tickets and accidents are more inclined to do so in the future, but not me, would you not agree? This is where the S's logic is a failure putting everyone within the same age and location into one bag. Statistics are beautiful thing, but you cannot just apply them with a spray gun .....
 
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mxs said:
I don't really care what their reasons are (I know I have not deserved and refuse to accept that I am paying for mistakes of others), my wallet needs to come up with 25% more money than last term. Goodbye State Farm.
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And nor should you care what their reasons are . . . since you are wondering, I'm just giving you the likely scenario. Insurance is a combination of paying for your own mistakes (which degrades your risk classification) and the mistakes of others (increasing claims frequency, increasing claims inflation, etc.). I always suggest that people shop around and go where it's the cheapest and best service.

mxs said:
What's also puzzling is how someone who I have not been a customer of in the last 3 years is giving me a rate so much better than State Farm, which basically does prove to me that SF is trying to penalize me unfairly. Anyways, no big deal, it's good to at least have a choice in this Ontario insurance mess which I am sure makes sense to a very few people.
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In State Farm's view, they have been undercharging you for the last three years. In their view, they got lucky and you didn't make a claim. They are adjusting rates for various rating factors (which affects more than just you) so that premiums match risk better. Even though you have been a profitable client for 3 years, it doesn't mean that you will be a profitable client over the next 10-year time horizon if they didn't adjust the rate. If they expect you to claim $1250 over the next year, it would be stupid of them to offer you the coverage for $1000.
 
VifferFun said:
In State Farm's view, they have been undercharging you for the last three years. In their view, they got lucky and you didn't make a claim. They are adjusting rates for various rating factors (which affects more than just you) so that premiums match risk better. Even though you have been a profitable client for 3 years, it doesn't mean that you will be a profitable client over the next 10-year time horizon if they didn't adjust the rate. If they expect you to claim $1250 over the next year, it would be stupid of them to offer you the coverage for $1000.
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The what-if logic as described by you would mean that everybody's rate in my location should always keep going only up and up. Regardless whether you have a good record or not. I have never ever heard of any other insurance system assesing risks the same way ..... basically the record of the masses takes over my personal record. No questions asked .....

So the quote I have from SF competitor is basically undercharging me even more, which would be to the total tune of 50% of my rate ..... sorry but I call b.s. I know you are trying to help and explain, but it's not working on me and I don't think I am a stupid guy ....
 
mxs said:
The what-if logic as described by you would mean that everybody's rate in my location should always keep going only up and up. Regardless whether you have a good record or not. I have never ever heard of any other insurance system assesing risks the same way ..... basically the record of the masses takes over my personal record. No questions asked .....
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If the area you live in has a social climate where people are likely to file lawsuits for small claims then yes, the territory effect of your premium will continue to increase in the future. The same thing goes if people are getting into more frequent or severe accidents than in the past. On the contrary, if the social or claims situation improves, then the rates will go down. ALL insurance companies in North America rate this way. The province of Ontario is divided into about 50 different territories by each insurer (since this is the maximum allowable by the regulator).

Remember that insurance is priced for a GROUP of similar-risk people, not an individual person. The claims experience of the group will affect the premiums of the group (either positively or negatively).

mxs said:
So the quote I have from SF competitor is basically undercharging me even more, which would be to the total tune of 50% of my rate ..... sorry but I call b.s. I know you are trying to help and explain, but it's not working on me and I don't think I am a stupid guy ....
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This is correct -- either State Farm is overcharging you, or the competitor is undercharging you. The estimates of future claims are just that -- estimates. If one company is better at estimating future claims than another, then they will be able to attract better risks by offering them lower premiums. In doing so, the company with poor estimating techniques will attract poor risks with inadequate premiums. This is known as adverse selection. This is the insurance game, and how insurance companies compete to win in the competitive marketplace. As a policyholder, this is what you are essentially doing when you shop around:

a.) If you are very unlikely to make a claim in the future due to your risk characteristics, you want to find the company with the best estimation techniques that recognizes your low risk and offers you a low premium.

b.) If you are highly likely to make a claim (whether you believe it or not), your goal is to find the company with the worst estimation technique that does NOT recognize your high risk, and accidentally offers you a premium that is less than your expected claims.
 
VifferFun said:
Remember that insurance is priced for a GROUP of similar-risk people, not an individual person. The claims experience of the group will affect the premiums of the group (either positively or negatively).
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Viffer,

Wouldn't it be more fair if insurance rate was SOLELY based on the losses that each individual cause. For example if in a group of 100 individuals, 20 of them had accidents, then only those 20 individuals bear the increased premiums. I understand that in this case, probably those 20 individual will not be able to afford insurance anymore as the rest of 80 people do not contribute to the increased rates. However, I think this is a more fair way to penalize drivers for their mistakes rather than average the financial loss out on everyone.
 
koorosh said:
Viffer,

Wouldn't it be more fair if insurance rate was SOLELY based on the losses that each individual cause. For example if in a group of 100 individuals, 20 of them had accidents, then only those 20 individuals bear the increased premiums. I understand that in this case, probably those 20 individual will not be able to afford insurance anymore as the rest of 80 people do not contribute to the increased rates. However, I think this is a more fair way to penalize drivers for their mistakes rather than average the financial loss out on everyone.
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An example explains this best.

Suppose you have 100 similar risks where one person is expected to claim $100,000 and the rest are expected to claim $0. What premium should each person in the group be charged?

$100,000/100 = $1000

Now suppose that you have the same group, but due to increased court awards and inflation, one person is expected to claim $125,000 and the rest are expected to claim $0. What premium should each person in the group be charged?

$125,000/100 = $1250
 
VifferFun said:
An example explains this best.

Suppose you have 100 similar risks where one person is expected to claim $100,000 and the rest are expected to claim $0. What premium should each person in the group be charged?

$100,000/100 = $1000

Now suppose that you have the same group, but due to increased court awards and inflation, one person is expected to claim $125,000 and the rest are expected to claim $0. What premium should each person in the group be charged?

$125,000/100 = $1250
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I am not going to use your example below, because I cannot make sense out of it for myself, but here's one we can all perhaps refer to. Increases are approved because claims are increasing, right? So why not to disburse the increased claims cost between ...

1) Who had a claim in the fiscal period the increase has been incurred (bigger percentage chunk)
2) The people who had a claim in the years before (lower percentage chunk)

And as such you leave the people who never had a claim and have a great driving/riding record alone? Doesn't that make bigger sense?
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