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Auto Insurance Question

Rocky

TRIBE Member
Given the Auto Insurance Consumers' Bill of Rights:

1. You have the right to purchase auto insurance coverage.
Is the following statement from an insurance broker true?

As a broker, I can’t setup a policy knowing you are going to be cancelling.
I asked for a short term insurance quote for my motorcycle and inquired about whether early cancellation fees apply and, if so, how they are calculated. I am going to be over in Europe this later this summer, and, since the insurance coverage is limited to Canada and North America, I would need to cancel my policy just before flying over there with the motorcycle.
 

kyfe

TRIBE Member
Given the Auto Insurance Consumers' Bill of Rights:



Is the following statement from an insurance broker true?



I asked for a short term insurance quote for my motorcycle and inquired about whether early cancellation fees apply and, if so, how they are calculated. I am going to be over in Europe this later this summer, and, since the insurance coverage is limited to Canada and North America, I would need to cancel my policy just before flying over there with the motorcycle.
it is true

as for options purchase a policy and then cancel when you are leaving the country.

the cancellation fee will be calculated using a short rate fee schedule, the further you are into your term the lower the cancellation fee will be.

The other option (if you plan to come back) is to suspend your coverage via endorsement read all about it here OPCF-16
 

Liability

TRIBE Member
it is true

as for options purchase a policy and then cancel when you are leaving the country.

the cancellation fee will be calculated using a short rate fee schedule, the further you are into your term the lower the cancellation fee will be.

The other option (if you plan to come back) is to suspend your coverage via endorsement read all about it here OPCF-16
Rocky, you might already be aware, but keep in mind that most insurance companies have a different short rate fee schedule specifically for motorcycles. Most motorcycle insurance is prorated most heavily towards the sumer months, but the efees are distributed evenly over twelve months. Therefore, depending on when you cancel affects the money back you receive.
 

Rocky

TRIBE Member
Thanks Shawn. I was going to contact you directly, but I figured you'd answer here anyway if you could.

I do understand that there is a different short rate fee schedule for motorcycles since they are almost always stored in the winter here.
 

Agatka8

TRIBE Member
Hey Rocky, where are you going on your bike? I'm going too...and I'll be doing the amalfi coast on a vespa....hehe
 
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kyfe

TRIBE Member
Thanks Shawn. I was going to contact you directly, but I figured you'd answer here anyway if you could.

I do understand that there is a different short rate fee schedule for motorcycles since they are almost always stored in the winter here.
Any time, where you off to this time?
 

Rocky

TRIBE Member
Hey Rocky, where are you going on your bike? I'm going too...and I'll be doing the amalfi coast on a vespa....hehe
Awesome! We're doing that, too. Although, we won't likely make it to Italy until next summer. When are you going?

Any time, where you off to this time?
This time, we're headed to the east coast of Canada, then flying over to Iceland. After spending a few weeks in Iceland, we're going to take a ferry over to mainland Europe. We're going to follow the weather and plan to be in southern Portugal and Morocco by winter. When it warms up, we'll head back up to Switzerland and Europe. If we make it that far, we're also going to travel down the Nile and back up, over to Jordan, Turkey and hopefully into Iran and Pakistan.

That's the rough plan anyway.
 

Jeffsus

TRIBE Member
Any organization that has to take out TV commercial time to explain how legitimate they are, is not legitimate.

I refer you to the IBC.

Surely Kyfe can give you the link.

"Oh poor us, we're victims of fraud, " oh poor us, record profits....

You know, in this bloody province, it's about time that these scammers come up with the promotion, "Buy our insurance and we'll give you a free car!" because, quite literally, for most people, the car payments are dwarfed by the insurance.

In fact, the above is prior art if anyone attempts to implement it. TM

-jM
A&D
 

Rocky

TRIBE Member
I concur.

Just a question about short rate fee schedule: are these standardized/regulated, or do most insurance companies have their own fee schedule?

Would it be a bad idea to ask for the short rate fee schedule when asking for a quote? I have already been denied a quote simply because I told the truth about cancelling a contract that I am required by law to have but do not require for use. How else can I know before signing a contract what I am going to be paying in total (including early termination fee)?
 

Rocky

TRIBE Member
Also, does this quote that I received make sense:

"The annual premium with 1 million liability, $1000 deductible collision and $500 comprehensive would be $2340.71 or 195.06/month.

Liability only would be $1839.82 or $153.32/month."

Why such a small difference between two distinctly different levels of coverage?
 
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kyfe

TRIBE Member
Also, does this quote that I received make sense:

"The annual premium with 1 million liability, $1000 deductible collision and $500 comprehensive would be $2340.71 or 195.06/month.

Liability only would be $1839.82 or $153.32/month."

Why such a small difference between two distinctly different levels of coverage?
the majority of anyone's premium is made up of accident benefit premiums. comp and coll cost next to nothing in comparison, granted on a bike the comp is higher than it would be for a car because it's much easier to steal a bike.

Either way go with full on the bike and no dummy:) don't ask for a short rate cancellation unless you never want to get a policy, it will come with your policy documents and generally they are somewhat standard across the board (although as liability pointed out may be slightly different in calculation but comparable)

I don't know if I'd consider a ~25% reduction a small difference.
 

Rocky

TRIBE Member
I got an online quote from Kanetix for $1,376. Should I be wary of this? It's significantly less than the State Farm quote above.
 

kyfe

TRIBE Member
I got an online quote from Kanetix for $1,376. Should I be wary of this? It's significantly less than the State Farm quote above.
no don't be wary,

with auto insurance the only real difference between one vs another is the service you receive. If everything is apples to apples then they are just different in price nothing more.

all policies will quote you by default with $1mil liability, $500 coll ded and $500 comp ded. accident benefits are mandatory and the basic is offered on all policies. generally all policies will cover the same things and provide the same limitations ie no coverage for terrorism etc.

believe it or not there is not much to an auto policy so go with the cheapest unless you are comfortable with a particular company
 

Agatka8

TRIBE Member
Awesome! We're doing that, too. Although, we won't likely make it to Italy until next summer. When are you going?



This time, we're headed to the east coast of Canada, then flying over to Iceland. After spending a few weeks in Iceland, we're going to take a ferry over to mainland Europe. We're going to follow the weather and plan to be in southern Portugal and Morocco by winter. When it warms up, we'll head back up to Switzerland and Europe. If we make it that far, we're also going to travel down the Nile and back up, over to Jordan, Turkey and hopefully into .
Sounds like an amazing trip! We r just you going to Italy for a few weeks. We are flying out in a couple weeks a d returning in June.
 

Rocky

TRIBE Member
I think I may have a policy through Kanetix (full coverage) for $1,150. Huge difference between that and what State Farm is offering. I can only reasonably assume that State Farm is trying to pad their profits. I doubt that their payouts and operating costs are that much higher. I'm sure they'd tell me otherwise.

Question: I am certainly going to have to cancel my policy in two months when we fly over to Iceland. How will this affect my insurance policies in the future?

This seems to be an important detail since I have been asked if I hav ever canceled a policy. I only need two months of insurance coverage. I am required by law to purchase insurance and no company will offer me two months of insurance. I mean, I don't want to cancel my policy, since I would prefer not to have a policy, but, since I am required by law to purchase insurance, I am forced to either pay for a full year of insurance when I only require two months, or cancel my policy and be penalized later. Seems like a bit of a scam, likely thanks to the insurance lobby?

Sounds like an amazing trip! We r just you going to Italy for a few weeks. We are flying out in a couple weeks a d returning in June.
Sweet! Take lots of photos and let me know what to see and where to go and what to avoid.
 
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kyfe

TRIBE Member
I think I may have a policy through Kanetix (full coverage) for $1,150. Huge difference between that and what State Farm is offering. I can only reasonably assume that State Farm is trying to pad their profits. I doubt that their payouts and operating costs are that much higher. I'm sure they'd tell me otherwise.

Question: I am certainly going to have to cancel my policy in two months when we fly over to Iceland. How will this affect my insurance policies in the future?

This seems to be an important detail since I have been asked if I hav ever canceled a policy. I only need two months of insurance coverage. I am required by law to purchase insurance and no company will offer me two months of insurance. I mean, I don't want to cancel my policy, since I would prefer not to have a policy, but, since I am required by law to purchase insurance, I am forced to either pay for a full year of insurance when I only require two months, or cancel my policy and be penalized later. Seems like a bit of a scam, likely thanks to the insurance lobby?

A: you don't have to cancel your policy as I've pointed out to you from the onset you can suspend coverage via endorsement. the policy stays active but no premium is charged until it is reinstated. THIS IS THE WAY YOU WANT TO GO.

As for your other ramblings I will position it in a context that makes sense to you. Ready.

Your bike breaks down and you need to get it fixed, you take it to the mechanic and ask him to fix it for just the cost of parts and not charge you labour. The mechanic laughs at you and your bike does not get fixed. Eventually you pay him the full amount at a later date and the bike gets fixed.

How is this the same you may ask?
first you are asking a broker to take you on at a loss to him since he/she knows you will only be cancelling in two months. The fact of the matter is that for the broker to get paid and not have his commission clawed back you need to stay on for the full term. From the insurers standpoint it is very expensive to bind a new policy the insurer doesn't make money off you until sometime in the second term (after the 1st renewal period) you cancel after 1 term they lose, you cancel during the 1st term they lose so they are allowed to charge a short rate cancellation, just like cell companies do.

No business will do business just to make you happy there needs to be something in it for them and in your situation while I applaud your honesty there is nothing there for the company or the broker worth wasting their time other than making you happy.

As for the point of asking about prior cancellations there are reasons for that, you would have a potential gap in insurance (which negatively affects you), you may not be paying your premiums (which negatively affects you) or you may be a bad risk or failing to disclose an important matter (which negatively affects you). Think of it like a credit score, if it sucks nobody will lend you money.

Just get the policy and then a week before you leave either cancel or ask to suspend it until you come back, Rocky you have options and you really aren;t being treated unfairly, you're just trying to be upfront and honest but doing so will get you nowhere and frankly the insurer doesn't need to know until you make the decision to cancel (wink wink nudge nudge).


As for the comment re state farm padding profits that is not the case, they are assessing you as a risk differently than others which is all statisticaly analysis (actualrial/underwriting), State farm is not a preferred motorcycle insurer but they will do it and charge more premium should you make the choice to place your business there. Jevco on the other hand is and for example would be cheaper than almost anyone.

So that cheap quote you got where was it from???? Jevco?
 
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Rocky

TRIBE Member
I'll have to respond to the remainder later since I am at work. Big job to get out and I'm trying to get insurance for the weekend!

With the documents that the broker sent me, he added this:

5. Please note that the OPCF 40 (Fire and Theft deductible) is added to the policy. This means that in the event of a total loss of the motorcycle by fire or theft, a deductible will be payable.

6. Please note that the OPCF 19 (Limitation of Amount) is added to the policy. This means that in the event of a total loss of the motorcycle, the lesser of actual cash value or the stated value of the motorcycle will be payable at the time of loss.

Is this standard?

Also, on the OPCF 19 form, the actual amount limit was left blank. I emailed the broker to mention that I would need a completed form in order to sign it. He responded by saying that they normally fill that in later, but resent the form with the value of $11,999 (price to replace the bike).
 

kyfe

TRIBE Member
I'll have to respond to the remainder later since I am at work. Big job to get out and I'm trying to get insurance for the weekend!

With the documents that the broker sent me, he added this:

5. Please note that the OPCF 40 (Fire and Theft deductible) is added to the policy. This means that in the event of a total loss of the motorcycle by fire or theft, a deductible will be payable.

6. Please note that the OPCF 19 (Limitation of Amount) is added to the policy. This means that in the event of a total loss of the motorcycle, the lesser of actual cash value or the stated value of the motorcycle will be payable at the time of loss.

Is this standard?

Also, on the OPCF 19 form, the actual amount limit was left blank. I emailed the broker to mention that I would need a completed form in order to sign it. He responded by saying that they normally fill that in later, but resent the form with the value of $11,999 (price to replace the bike).
typically fire claims are not charged a deductible, it's been a while since I've done policy sales but as I said earlier bikes are more vulnerable to theft and as such there are sometimes caveats to purchasing a policy. Having said that it is a gov't mandated form and without knowing your real insurance history (claims, tickets experience etc) I can't really comment why they require this or if it's something they insist on in all or certain situations.

Auto policies are all based on actual cash value (aside from specific circumstances) so the OPCF19 seems kind of redundant, maybe they are doing this to be more transparent but either way I don't see how it changes anything other than making you aware that they will only pay what the cash value is of the bike at the time of loss, IE not what you bought if for, not what it may cost to buy a replacement but base don the red book value (which is the book most insurers use). granted this is a negotiation and I will encourage anyone who suffers a total loss and is presented with an offer to settle to counter no matter what the offer proposed is, there is always more money on the table. I speak from the point of having settled hundreds of total losses in my career. As long as you can prove what it's worth you should be alright. I honestly believe that most offers presented are within reason and insurers do look to site like auto trader etc to ensure their initial offer is not out of line, they do try to be fair but every once in a while a strange situation prevents a reasonable offer from being presented. For example I have an old client who had a MINT toyota celica second gen and was the only owner, the car had less than 1,500kms, he literally drove it for oil changes and servicing and the odd Sunday drive. Now the car was 20 years old but not in the condition you'd expect for a 20 year old car. Parts are super rare on this one and we could not find anything in terms of OEM or Am parts. the book value on his vehicle is roughly $1000 but in reality the vehicle is worth probably ~$30K. We settled him for $3500 which sucked so I allowed him to buy the vehicle back for $500.
 

xtcfreak

TRIBE Member
Can we turn this in to the "ask kyfe an auto insurance question" thread? lol

If you don't mind, a quick one (sorry to Hijack :)).

Actually, I am just looking for a little information on auto insurance for a car registered to a business. Is there any special requirements? Does it have to be incorporated or can it be sole proprietorship? I know someone will probably say "just drive the car and write some of it off", but I have a reason for doing what I am.

Also, how much would I expect to pay compared to regular car insurance ?

Thanks!

Jay
 
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kyfe

TRIBE Member
Can we turn this in to the "ask kyfe an auto insurance question" thread? lol

If you don't mind, a quick one (sorry to Hijack :)).

Actually, I am just looking for a little information on auto insurance for a car registered to a business. Is there any special requirements? Does it have to be incorporated or can it be sole proprietorship? I know someone will probably say "just drive the car and write some of it off", but I have a reason for doing what I am.

Also, how much would I expect to pay compared to regular car insurance ?

Thanks!

Jay
PM me with details as I'll need to know more about it's use so I can help you ensure it's classified properly, like what you'll be doing with it, annual mileage, who owns the biz etc.
 
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Rocky

TRIBE Member
Some info: I got a quote form Kanetix who connected me with a broker from KTX Insurance Brokers. The price was really good. $106/mo. ($1,172/yr.). Just got my temp. slips. Whoot! Going riding this weekend (if I remember how)!

In response to your previous message:

Placing the policy on hold is a good option. I had previously placed a policy on hold but I was paying for theft and vandalism, or something like that. If I can simply place it on hold without canceling and without having to make any payment, this seems like the way to go.

I completely understand the concept of an insurance company having to pay for damages and taking a loss. I don't know the exact statistics (I'd actually like to see some), but the case that you described (for someone of my age, driving experience, driving record, etc.) is an exceptional case (I would guess). Your reasoning is valid in the unlikely event that I have an accident within those two months. A reasonable guess would assume that a only small percentage of cases would result in the situation that you described. It is probably far more likely that most riders (of my demographic) would not have an accident in those two months. Your scenario and reasoning for not insuring a rider for two months assumes that there definitely will be an accident in those two months. In the much more likely case that I don't have an accident, the insurance company is out two months of premium payment. In your case, where it is assumed that I will have an accident, they are taking me on at a loss. In the much more likely case that I do not have an accident, not collecting my two months premium is a loss.

In your scenario where I have an accident, I am asking the insurance company to take a loss to pay for the damages. In every other case in which there isn't an accident, the insured is being asked to take an initial loss (payment of insurance premiums). This is why, in the end, with the current structure of a for-profit insurance industry, we, as premium payers, all lose (over-all) and the insurance industry wins by making record profits. I have been told that profits from the insurance industry come from capital investments and that the auto insurance industry, as it relates to premiums and payouts, is a break-even venture. This idea is in direct conflict with the idea that you cannot nearly break even and make record profits from investments of almost nil.

...they are assessing you as a risk differently than others which is all statistically analysis (actuarial/underwriting)...
This sounds like another way of saying that they formulate their statistical analysis such that they increase and ensure profits. I mean, how do you account for the vast difference between insurance quotes? The difference in their statistical analysis cannot be due to actual statistics (probability of getting into an accident based on age, gender, driving record, etc.) unless they are both using vastly different statistics, in which case someone is using inaccurate statistics in their analysis.

Saying that they assess risk differently, if not based on actual statistical probability, is really a way of saying that they choose to lower (or eliminate) their own risk by raising premiums and placing all of that risk onto the insured population. By raising premiums they are protecting against possible losses due to the way they choose to perform the risk assessment. This is a round-about way of saying that they choose to assess risk in such a way that sets premiums high as to ensure profits. Part of the legitimacy of the insurance industry comes from the idea that they are taking the risks of insuring drivers, when, in the over-all picture, they are really just shifting the risk onto the consumer, as they do when cases of insurance fraud are high by raising premiums.

No business will do business just to make you happy there needs to be something in it for them and in your situation while I applaud your honesty there is nothing there for the company or the broker worth wasting their time other than making you happy.
I can completely see this statement as being valid in the case of a service that has not been deemed essential and one that is not required by law. In this case, this should not be a valid statement.

There is absolutely something wrong with this system if I am required by law to have insurance, and I, according the Auto Insurance Consumers' Bill of Rights, have the right to purchase insurance, but have to lie in order to even receive an insurance quote.

Anyway, I am sure we've been through all this before in a previous thread.

I really appreciate your help. Please don't feel offended by my opinions of the insurance industry and its legitimacy in society. I think the banking industry is evil and, overall, detrimental to society. My girlfriend works for Scotia Bank and I tell her this all the time, and she understands that this isn't an attack on her.
 

kyfe

TRIBE Member
Rocky, everything I previously posted does not take into consideration you having an accident. I just wanted to clarify that because if you do have an accident in the two months it would take them even longer before they make a profit off you. The costs associated with obtaining a new client are high and the costs of having the service component are also considerable. It's really no different than any other business, you have to set yourself apart from the competition which is made ever more difficult but the fact that there is very little difference in the actual product
 

kyfe

TRIBE Member
Rocky I'm not offended at all, I enjoy educating people about insurance because its important people have the right information. I'm in a worse boat than you last year it was goin to cost me somewhere between $6,600 - 16,000 to get insurance for the year so when you challenge some of what I put forward I want you to keep that in mind.

Having said that I do 100% believe premiums should be about half of what they are now. I was involved with the fraud task force initiatives and I've seen first hand the reduction in fraudulent activity and that's been going on since 2010.
 

Rocky

TRIBE Member
Hello Jeff,

I will need to suspend the policy on my motorcycle since I will be flying it to Europe this coming week and, as I understand, I am not covered under my policy while riding in that part of the world.

The details of my policy are:
policy number: #####

Please make the suspension effective August 3, 2013. I hope to resume my policy when I return to Canada.

Thank you.
3 weeks of waiting for a response:
Hi Justin,

Thank you for your email.

In response to your question, your current motorcycle policy you have with Intact will not cover you for Europe, you would have to purchase insurance in Europe if you intend to rid a motorcycle in Europe.

Furthermore, unfortunately we are unable to suspend the coverage you have currently with Intact with your motorcycle policy.

The only other option is we can cancel your existing policy with Intact, if you are going to be in Europe for a long time.

Please let me know if you wish to cancel, or if you wish to continue, how long are you intending to stay overseas.

Thank you.
I expect to be traveling with my motorcycle outside of Canada for quite some time. I will be forced to cancel the policy. This is unfortunate and unfair since I will be penalized later for having cancelled a policy, but this is the nature of the insurance industry. Please make this effective the date which I asked to suspend the policy. I had originally requested to have the policy suspended on August 3, 2013. Please see that I do not pay for the time that has gone buy due to the delay in response to my original email. Thank you.
Hi Justin,
Thank you for your email.

I have attached the cancellation form above for you to fill out including your signature and date of cancellation as August 3,2013, please scan and reply to this email with filled out cancellation form.

Furthermore, for cancelling in month of August they will retain 80% of the total premium.

As soon as I receive the signed cancellation form, I will email you to let you know that I have received it and processed the cancellation at your request.

Thank you.
 

Rocky

TRIBE Member
So I am now forced to cancel, penalized later when trying to purchase mandatory insurance, and pay 80% of the total yearly premium for 17% (2 months) of the use?

What are my options? Pay 100% of the yearly premium for 17% (2 months) of the year so that I don't get penalized later?

Fucking furious!
 
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