Seriously, what is up with multiple vehicle rates?

[thephenom]

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10% profit is a crazy amount in this market. Consider that's AFTER paying wages and overhead; it's literally just extra money...3% would be more reasonable with the economy as it is.

Regardless, the average isn't the issue. Multi vehicle owners are a vast minority, and we get screwed because of it. If we didn't get screwed, we might skew that average profit 0.001%, and we'd be much happier. But of course, 0.001% is still at least a few hundred thousand, and well, they aren't just going to give that up.

I understand the sentiment, but 3% is crazy, wtf? I want to shop at your business if you own a shop somewhere. Would you want to run a business, put in the hard work and only have 3% of profit? And for insurance company, they carry a lot of risk, that 10% profit is only because they made money on investment in combination of not having more big losses. One freak storm will probably be enough to turn that 10% into 5%. (As a comparison, the big 4 banks in Canada makes about 20-30% net profit.)

I don't know what you mean by multi vehicle getting screwed. If your second car isn't a daily driver, you can insure it as a leisure vehicle which has lower rates than a daily. With additional vehicles on the policy, you can multi product discount. For your project bikes, just shop around, I think some insurance company allows for theft and fire only if you have multiple motorcycles on the policy. Also remember, motorcycle rates are already calculated based on the usage from what I understand. For example, if your insurance is $1200/year, it doesn't mean your premium is rated $100/month, the insurance rate is probably calculated $150/month for 6 riding months, and $50/month for 6 non-riding months. So for some insurance company, they don't allow theft and fire only during off season.

 

[drumstyx]

I understand the sentiment, but 3% is crazy, wtf? I want to shop at your business if you own a shop somewhere. Would you want to run a business, put in the hard work and only have 3% of profit? And for insurance company, they carry a lot of risk, that 10% profit is only because they made money on investment in combination of not having more big losses. One freak storm will probably be enough to turn that 10% into 5%. (As a comparison, the big 4 banks in Canada makes about 20-30% net profit.)

I don't know what you mean by multi vehicle getting screwed. If your second car isn't a daily driver, you can insure it as a leisure vehicle which has lower rates than a daily. With additional vehicles on the policy, you can multi product discount. For your project bikes, just shop around, I think some insurance company allows for theft and fire only if you have multiple motorcycles on the policy. Also remember, motorcycle rates are already calculated based on the usage from what I understand. For example, if your insurance is $1200/year, it doesn't mean your premium is rated $100/month, the insurance rate is probably calculated $150/month for 6 riding months, and $50/month for 6 non-riding months. So for some insurance company, they don't allow theft and fire only during off season.

Pleasure vs daily driver is a difference of a few hundred dollars at most. My gripe is that I already have coverage that is mutually exclusive from the coverage I'm forced to have on my other vehicles. Why can't I have one coverage, rated for the highest risk vehicle, and carry it with me, the driver.

Eg. $300 liability premium for a bike, $500 for a car. It is 100% impossible for me to ever use both at the same time, so why don't I just have one?

 

[Apollo95]

Pleasure vs daily driver is a difference of a few hundred dollars at most. My gripe is that I already have coverage that is mutually exclusive from the coverage I'm forced to have on my other vehicles. Why can't I have one coverage, rated for the highest risk vehicle, and carry it with me, the driver.

Eg. $300 liability premium for a bike, $500 for a car. It is 100% impossible for me to ever use both at the same time, so why don't I just have one?

++1

 

[thephenom]

Pleasure vs daily driver is a difference of a few hundred dollars at most. My gripe is that I already have coverage that is mutually exclusive from the coverage I'm forced to have on my other vehicles. Why can't I have one coverage, rated for the highest risk vehicle, and carry it with me, the driver.

Eg. $300 liability premium for a bike, $500 for a car. It is 100% impossible for me to ever use both at the same time, so why don't I just have one?

Your one coverage idea is basically incorporated into how you pay insurance already. Your rate based on what you drive, how much you drive it and when you drive it. If you have two vehicles, and let's say you put on a total of 20000 km a year, your premium reflects you put 20k on two vehicles rather than 20k on each vehicle. There is probably some overlap like health/medical/income replacement/rental car coverage, but those are probably more minor than the "few hundred dollars" discount you get for pleasure vs daily driver, you can check your policy for actual cost for each coverage. Would it make you feel better if insurance company just bundled your $300+$500 together and say your one coverage for the estimated use of each vehicle is $800?

Your example will eventually lead to the question, why are you paying for insurance on the days/hours/minutes/seconds you are not driving it. If you want to advocate pay-per-use insurance, talk to your MPP, they are the ones that can regulate auto insurance. Though personally, I don't expect anything will change knowing premium is calculated based on Losses (paid out) and Expenses. So unless insurance company can somehow pay out less (e.g. province to pay for certain benefits, or cut down on insurance fraud) or cut down expenses, don't expect too much changed. Here's a blurb from Insurance Bureau of Canada on why insurance in Ontario is so expensive.

- As of March 2015, average annual auto insurance premiums were $854 in the Atlanticprovinces, $1170 in Alberta and $1,455 in Ontario.
- In 2013, Ontario consumers spent more than 5% of their disposable income on autoinsurance on average. This is simply too much; consumers in Alberta and AtlanticCanada spent less than 3%.
- The average no-fault accident benefits payout in 2013 in Ontario was more than$31,000. In Alberta and Atlantic Canada, average accident benefit claims in 2013 werearound $8,600 and $3,700, respectively.
- In 2013, the average cost of a medical rehabilitation (med/rehab) claim was $31,939 inOntario. In Alberta, it was $3,048. In Atlantic Canada, it was $7,365.
- Also in 2013, in Ontario, the average cost of an income replacement claim was $32,169.In Alberta, it was $8,516. In Atlantic Canada, it was $18,727.

 

[drumstyx]

Your one coverage idea is basically incorporated into how you pay insurance already. Your rate based on what you drive, how much you drive it and when you drive it. If you have two vehicles, and let's say you put on a total of 20000 km a year, your premium reflects you put 20k on two vehicles rather than 20k on each vehicle. There is probably some overlap like health/medical/income replacement/rental car coverage, but those are probably more minor than the "few hundred dollars" discount you get for pleasure vs daily driver, you can check your policy for actual cost for each coverage. Would it make you feel better if insurance company just bundled your $300+$500 together and say your one coverage for the estimated use of each vehicle is $800?

Your example will eventually lead to the question, why are you paying for insurance on the days/hours/minutes/seconds you are not driving it. If you want to advocate pay-per-use insurance, talk to your MPP, they are the ones that can regulate auto insurance. Though personally, I don't expect anything will change knowing premium is calculated based on Losses (paid out) and Expenses. So unless insurance company can somehow pay out less (e.g. province to pay for certain benefits, or cut down on insurance fraud) or cut down expenses, don't expect too much changed. Here's a blurb from Insurance Bureau of Canada on why insurance in Ontario is so expensive.

It's not at ALL incorporated. If it were, minimum coverage at 5000km/year would cost roughly (ideally, exactly) half what 10,000km/year coverage costs. Instead, it's a hundred bucks max. Seriously, I've done this. I've gone from a 20km commute at 15,000/year to a 0km commute at 7,000km/year, and it lowered my premium about 7%. Something like $10-20/month.

 

[thephenom]

It's not at ALL incorporated. If it were, minimum coverage at 5000km/year would cost roughly (ideally, exactly) half what 10,000km/year coverage costs. Instead, it's a hundred bucks max. Seriously, I've done this. I've gone from a 20km commute at 15,000/year to a 0km commute at 7,000km/year, and it lowered my premium about 7%. Something like $10-20/month.

Can't say I'm an actuary to know what weight driving mileage factors into your premium. But I suspect even if you put on half the km in a year, it doesn't automatically mean your premium should be half of what it was. With the simple reason that just because you don't drive, it doesn't mean your car is less likely to get hit by hailstorm, get burnt down, getting it stolen, getting crashed into by a drunk driver, etc.

You asked for reasoning on why insurance is the way it is, and I think I have given enough insight to how insurance are calculated and how it works from info I got from my friend. I've shown reasons why insurance in Ontario costs more than other provinces as well. But I'll spoon feed you one last one from Intact's financial results that I posted before to show whether we have been gouged in paying auto insurance.

Personal auto underwriting income increased to $14 million from the $25 million loss recorded in the last quarter of 2012 as the combined ratio improved 4.7 percentage points from last year to 98.4%.

With a combine ratio of 98.4%, this means 98.4% of your auto insurance premium were used to pay off losses and operation expenses, and Intact is making 1.6% profit in the sector after all expenses. Is that profit low enough for you? Or are you going to think they probably did some funny accounting?

You can continue to think however you want, but the facts are there. You obviously have a different idea on how insurance rates are calculated and how they should be calculated, and won't be swayed from it. Koodos to you for trying to disprove an industry of actuaries. Good luck with your future endeavors, let me know if you ever start an insurance company, I'll be happy paying for dirt cheap insurance while you are making a loss as a company.

 

[Brian P]

Shop around. After many years with State Farm, I recently switched to a different company because although State Farm are OK for sport bikes, their multi-vehicle and multi-line discounts weren't competitive.

Check with Dalton Timmis ... they did OK for me.

 

[drumstyx]

Can't say I'm an actuary to know what weight driving mileage factors into your premium. But I suspect even if you put on half the km in a year, it doesn't automatically mean your premium should be half of what it was. With the simple reason that just because you don't drive, it doesn't mean your car is less likely to get hit by hailstorm, get burnt down, getting it stolen, getting crashed into by a drunk driver, etc.

You asked for reasoning on why insurance is the way it is, and I think I have given enough insight to how insurance are calculated and how it works from info I got from my friend. I've shown reasons why insurance in Ontario costs more than other provinces as well. But I'll spoon feed you one last one from Intact's financial results that I posted before to show whether we have been gouged in paying auto insurance.

With a combine ratio of 98.4%, this means 98.4% of your auto insurance premium were used to pay off losses and operation expenses, and Intact is making 1.6% profit in the sector after all expenses. Is that profit low enough for you? Or are you going to think they probably did some funny accounting?

You can continue to think however you want, but the facts are there. You obviously have a different idea on how insurance rates are calculated and how they should be calculated, and won't be swayed from it. Koodos to you for trying to disprove an industry of actuaries. Good luck with your future endeavors, let me know if you ever start an insurance company, I'll be happy paying for dirt cheap insurance while you are making a loss as a company.

I don't have coverage for a hailstorm, and as for another driver being at fault, that shouldn't be on me to pay a premium for protection.

It's very simply that 99% of motorcycle or car owners have only 1, or 1 of each. Those of us with multiple vehicles are an afterthought, and unless it's legislated, no company in their right mind would give up such obvious gravy. Honestly, if rates were EVEN HIGHER (to compensate for the lack of gravy, but it wouldn't even hit the margin that much, since we're such a minority), but multiple vehicle additions were sane, I'd be less upset.

 

[unL33T]

When I was with BelairDirect many moons ago, back when I was like 20-22 or something (so about 9-10 years ago), I had a 2001 Jetta 2.0 gas. I bought a 2001 Jetta 1.9L TDI. Got quotes for both. Gas Jetta was say $150/month, diesel was like $153/month (the diesel was worth a bit more so I guess it makes sense). I was expecting it to cost something like $200/month to insure both because I didn't know we got ripped off so bad on this (I figured since I can only drive one at a time it would maybe be a bit more than insuring one). Not the case. The price to insure both was about $350, more than adding the two together. Made no sense.

At least now The Personal gives me 15% off (I think... might only be 10%) for having 3 vehicles.

 

[drumstyx]

When I was with BelairDirect many moons ago, back when I was like 20-22 or something (so about 9-10 years ago), I had a 2001 Jetta 2.0 gas. I bought a 2001 Jetta 1.9L TDI. Got quotes for both. Gas Jetta was say $150/month, diesel was like $153/month (the diesel was worth a bit more so I guess it makes sense). I was expecting it to cost something like $200/month to insure both because I didn't know we got ripped off so bad on this (I figured since I can only drive one at a time it would maybe be a bit more than insuring one). Not the case. The price to insure both was about $350, more than adding the two together. Made no sense.

At least now The Personal gives me 15% off (I think... might only be 10%) for having 3 vehicles.

Exactly! I won't drive more with 2 cars (or 2+ bikes in this case) I'll just spread my driving out between the vehicles.

 

[Motorcycle Mike]

Yep, liability coverage should be on the person. If you don't have personal liability coverage, it should be illegal for you to operate any vehicle -- unless you have corporate liability coverage (if you drive as part of your job).

Theft, collision, coverage for uninsured motorist, etc, should all belong to a vehicle.

I have three vehicles in the house. Wife can only drive one of them. We should be paying 2x liability, 3x theft, collision, and uninsured motorist coverage (if wanted). Instead I am paying for 4x liability (me on 3, wife on 1) but I can only drive/ride one at a time.

Changing the way insurance works could be a slight boost to the economy. How many people would own more vehicles if the liability coverage wasn't doubled and tripled? I know I would have more than I do now, the only thing holding me back is the cost of additional insurance.

 

[griff2]

Yep, liability coverage should be on the person. If you don't have personal liability coverage, it should be illegal for you to operate any vehicle -- unless you have corporate liability coverage (if you drive as part of your job).

But it isn't.

Besides, even if it was illegal the owner of the vehicle is still ultimately liable for almost any harm arising out of the use of his or her vehicle regardless of who was driving and whether they were using the vehicle with or without permission, and the cost of settling for any such harm would still have to be covered in most instances by your liability and DCPD coverage.

 

[drumstyx]

But it isn't.

Besides, even if it was illegal the owner of the vehicle is still ultimately liable for almost any harm arising out of the use of his or her vehicle regardless of who was driving and whether they were using the vehicle with or without permission, and the cost of settling for any such harm would still have to be covered in most instances by your liability and DCPD coverage.

Are you actually saying that my insurance covers the liability of someone that STOLE my car/bike? That's one of the most ridiculous things I've ever heard, and if it's true, is a HUGE flaw in the insurance system.

 

[unL33T]

Are you actually saying that my insurance covers the liability of someone that STOLE my car/bike? That's one of the most ridiculous things I've ever heard, and if it's true, is a HUGE flaw in the insurance system.

It just might. If he crashes it might even go on your record. Hmm, something to look into. That's how it works if you lend your car to someone (which is why I usually don't).

 

[esphoto]

It just might. If he crashes it might even go on your record. Hmm, something to look into. That's how it works if you lend your car to someone (which is why I usually don't).

From what I could find online, your insurance covers damages if your vehicle was stolen and in an accident...I could not find anything about rate increases in regards to that however. Most likely you would not be "at fault" and thus not have your rates increased, since the car was stolen and not borrowed.

In regards to lending your vehicle, I can't see their accident going onto your driver record since you have separate licenses. Will it show you made a claim? Of course it will, but you were not involved the accident and will not be in any records of that accident. I could be wrong since this is my assumption from simple common sense, but hell, we know it doesn't always work that way.

 

[griff2]

Are you actually saying that my insurance covers the liability of someone that STOLE my car/bike? That's one of the most ridiculous things I've ever heard, and if it's true, is a HUGE flaw in the insurance system.

Your insurance will pay out the damages. If the thief is identified (and still alive to be convicted) they may then try to go after the thief to recover their losses, but you know what they say about getting blood from a stone.

 

[unL33T]

From what I could find online, your insurance covers damages if your vehicle was stolen and in an accident...I could not find anything about rate increases in regards to that however. Most likely you would not be "at fault" and thus not have your rates increased, since the car was stolen and not borrowed.

In regards to lending your vehicle, I can't see their accident going onto your driver record since you have separate licenses. Will it show you made a claim? Of course it will, but you were not involved the accident and will not be in any records of that accident. I could be wrong since this is my assumption from simple common sense, but hell, we know it doesn't always work that way.

Yes it goes on as an art fault claim. Any charges wouldn't go on your license record but at fault accidents are often worse than most charges to your insurance rates.

 

[esphoto]

Yes it goes on as an art fault claim. Any charges wouldn't go on your license record but at fault accidents are often worse than most charges to your insurance rates.

So your saying that if your vehicle is stolen and crashed, you would be found "at fault" by your insurance company? I have a hard time believing this...if its true then what a messed up system (yes, I already know many aspects are messed up already).

If your talking about lending...then disregard previous. Yes, your insurance policy is on the vehicle so you are dinged.

 

[unL33T]

So your saying that if your vehicle is stolen and crashed, you would be found "at fault" by your insurance company? I have a hard time believing this...if its true then what a messed up system (yes, I already know many aspects are messed up already).

If your talking about lending...then disregard previous. Yes, your insurance policy is on the vehicle so you are dinged.

I was referring to lending but I wouldn't be surprised if it went against you even if it was stolen. I would like to think not but I wouldn't be surprised if there was some technicality that made it so.

 

[vince492]

I only read the first few replies, can't you just shop around? My premium went down a few bucks after insuring a second vehicle. I'm with the personnal, was paying 2400$ for 1 car, 05 civic, at 21 yrs old, went down to 2200$ for 2 car (04 cavalier, 05 civic), stayed the same with a second driver. Now pays about that for 2 car and a motorcycle (05 civic, 13 cx-5, 04 vfr 800). I'm also much older.

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