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.
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.