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Car Insurance (pg. 5)
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| Moral Hazard |
| quote: | Originally posted by rabbitjoker
"fine print" was not meant in a literal way - of course there is no fine print in the contract... |
Actually RJ, the auto policy in Ontario (note this does not differ from company to company) is a componate of statute law (Insurance Act). As it is statute law there is in fact no fine print, everything is laid out in the policy and the act from which it is derived. Now, the complexities of how the courts have interpreted the contract is another matter all together but rest assured the courts always lean toward the customer as opposed to the insurer if anything is unclear or questionable. |
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| Moral Hazard |
| quote: | Originally posted by DigiNut
Yes, but insurance companies usually don't give people a hard time over serious liability issues... it's the collision stuff that you have to worry about with the less-reliable companies.
I seriously doubt that. If that were true, how is it that auto insurance premiums outside Ontario are a fraction of what they are here?
Insurance fraud and shyster lawyers are an issue, of course, but they're an issue everywhere and are much more plentiful anywhere in the U.S. (where rates are invariably lower) than Ontario. |
Liability in Ontario is determined by a regulation of the Insurance Act called the Fault Determination Rules. It describes nearly every conceivable type of collision and apportions liability to the parties involved. Insurance companies must obey the liability apportionments of the FDR. They can only disregard these rules if it is in their insured's favour (so they can rule you are not liable even though the rules say you are, however, they cannot hold you liable if the rules say you are not).
Aaron, I can assure you that nearly every automobile insurance carrier in Ontario writes insurance either at the break even point or at a loss. 4 years ago I worked for Markel Insurance of Canada. At that time they became the first insurance carrier to turn an underwriting profit on automobile insurance in Canada since 1978. That profit was a whopping .027 cents on every dollar of premium writen. Now, Markel is a special case because they only write commercial insurance which is not subjet to the same premium restrictions as personal insurance. The first company to turn a profit writing personal automobile in Ontario did so in 2004, that profit was less then a cent per dollar writen. The only reason that companies write automobile insurance in Ontario is because they are forced to. If you do not write automobile in Ontario then you are not allowed to write property, commercial general liability, boiler and machinery, products liability, marine, truckman's liability, etc. It is on these lines that insurers make profit, not auto.
With regard to premium being higher in Ontario then elsewhere I can explain that two you in two words..... ACCIDENT BENEFITS. AB is a coverage that is part of your liability insurance. It will pay for medical treatments, income replacement, attendant care, and other related benefits/expenses if you are injured in any automobile related incident. Without question this is the biggest expense facing insurers and this is where they lose their money. The AB regulations are set up to favour the injured party (understandable). Now all provinces have some AB coverage but Ontario's is by FAR the most extensive. For example.... If you are injured in an accident in NF and cannot work you can receive 80% of your net income to a maximum of $140 per week.... In Ontario the maximum is $400. In NF they will pay for a maximum of $25,000 for medical care, in Ontario they pay for $100,000 or under certain conditions $1,000,000. Clearly we have more coverage here, which results in more payments, which requires increased premium.
If not for government regulation premiums would be MUCH MUCH higher for high risk drivers (such as nearly everyone on this board) and slightly lower for lower risk drivers. See the government caps what insurers can charge in order to make insurance for the undesirable risks (people more likely to be at fault in an accident). Because of this they allow increased premiums to be charged on lower risks to offset the cap somewhat. Now if you removed regulation what would happen is the insurers would drop premium on the better risks to attract those people but they would also raise premium on the bad risks to try and ensure they break even on those policies. Scott's right, for bad risks you'd be looking at triple the premium. If you want to get rid of government intervention they you'll need to accept that for some people insurance will simply be unaffordable and therefore it is likely they will either not drive or will drive without insurance.
With regard to the US, you should remember that with the exception of Michigan there is no Accident Benefits coverage. This results in significant savings on the auto premium but will be made up for by significant medical cost and wage loss if you are injured in an accident. Additionally, their minimum coverages are much lower in the US. In Ontario the minimum liability coverage is $200,000 but most driver's carry $1,000,000. In Arkansas the minimum liability coverage is $10,000 (that is not a typeo.... only TEN THOUSAND). This means that if you injure someone in an accident and have an Arkansas policy you will the insurer will only pay $10,000 toward the damages awarded against you..... considering that multi million dollar settlements are common in the US this is not a good position to be in. |
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| kabelicious |
I've had AAA since I was 17 - they might be on the more expensive side but the times I have needed roadside assistance, towing, lock-out, or had to file claims, they have been prompt, quick, and always accomadating. With my record, I am on a first name basis with my insurance agent - hell, she had my MOTHER as a driver since she was 16!
shrug - I looked around to switch this time and decided not to. It's not worth it and I only have 3 months left to make payments and then I'm done with this high payment rate.
Don't speed, kids - it'll kill your savings ability and force you to live with parents for a year just to pay to drive. My rent is still cheaper than my car insurance but at least it's not paying for car, utilities & rent equaliing my insurance payment anymore. :) |
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| Floorwhore |
| quote: | Originally posted by tatgirl
Someone recommend a good, cheap(er) insurance company than what I've got, thats NOT PC Insurance- I dont have time to wait. |
RBC |
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| Moral Hazard |
| quote: | Originally posted by DigiNut
What's this about medical benefits... I thought we had "free" health care? :p
I think the real reason is what you said about the courts. That's the kicker. Judges here ALWAYS side with the poor victims even if their case is obviously a fraud, whereas judges in the U.S. and some other Canadian provinces are a bit more familiar with shysters. |
OHIP does not cover physio therapy, massage, chiropractic care, etc. Nor does OHIP cover lost wages or nursing care/attendant care or housekeeping services.
Don't kid yourself Aaron. The US is even more sympathetic to the victim then are Canadian courts. Some of you may recall a story I told a while back about a truck my former employer insured..... it was ordered by the NY state troopers to park on the shoulder of I80 because they were closing the interstate. The driver did as instructed, put on his 4 ways, set up cones and flares, then returned to his truck. A few hours later (after the interstate was closed) this parked truck (with the 4ways on and the cones and flares out) was rear ended by a car. The car was being driven by an old man who did not have a license and was legally blind on an interstate that was closed. Now normally if you hit a parked vehicle you're at fault.... no way you wouldn't be. This driver was injured, significantly. He sued. He won nearly half a million dollars for non-pecuniary (pain and suffering) damages alone. Now, in Ontario this would not have happened as he would have been completely liable for the collision and non-pecuniary damages are capped (based on case law.... "the Trinity Cases") at approximately $280,000. Another good example was one I recall of a woman (single mother) who failed to stop at a stop sign and drove under the trailer of a transport truck. She was killed instantly. Witnesses confirmed that she did not stop and was travelling in excess of the speed limit. She did not work (on social assistance). The courts ruled that the trucker was liable (no reason given as they don't have to give a reason in Florida) and damages of $750,000 were awarded to the woman's child. Now I ask you, where are the courts more sympathetic? |
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| DigiNut |
| quote: | Originally posted by Moral Hazard
With regard to premium being higher in Ontario then elsewhere I can explain that two you in two words..... ACCIDENT BENEFITS. AB is a coverage that is part of your liability insurance. It will pay for medical treatments, income replacement, attendant care, and other related benefits/expenses if you are injured in any automobile related incident. Without question this is the biggest expense facing insurers and this is where they lose their money. The AB regulations are set up to favour the injured party (understandable). Now all provinces have some AB coverage but Ontario's is by FAR the most extensive. For example.... If you are injured in an accident in NF and cannot work you can receive 80% of your net income to a maximum of $140 per week.... In Ontario the maximum is $400. In NF they will pay for a maximum of $25,000 for medical care, in Ontario they pay for $100,000 or under certain conditions $1,000,000. Clearly we have more coverage here, which results in more payments, which requires increased premium. |
Over-regulation is practically identical to non-competitiveness. Why the hell can't I ditch those accident benefits?
Again, I'm not trying to pick at the insurance companies here, I'm just reflecting on the sorry state of the industry here. Whether it's because of fraud, clueless immigrants, ricers and juiced-up ginos, or over-regulation and bureaucratic red-tape, isn't really the issue for me. All I said was that people have good reason here to want the lowest possible rates, even if they mean "caveat emptor". |
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| ChemEnhanced |
| quote: | Originally posted by tatgirl
Someone recommend a good, cheap(er) insurance company than what I've got, thats NOT PC Insurance- I dont have time to wait. |
RBC is usually cheap....go with any direct writer....also check out Personal Insurance or TD Insurance |
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| virtualtrancer |
| yes your insurance will go down because when you turn 25 your in a different class of divers which is better for your insurance. However your driving a 2dr 2001 sunfire which isn't good because its a 2dr but just stay with your company if your getting any discounts such as family discounts if your with your parents company, if your not i suggest ask your parents company for a quote. remember its a soft market right now for most insurance companies so they will look better at you right now rather then if it was a hard market...good luck |
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| tatgirl |
| quote: | Originally posted by ChemEnhanced
RBC is usually cheap....go with any direct writer....also check out Personal Insurance or TD Insurance |
Ended up back on RBC again. It was a lot cheaper than Kingsway, tho I'm still spending $310/month. TD couldn't give me a quick quote either- another week or 2 long application process, & State Farm would only put me on some 'high risk' insurance they dealt with (so I didn't even bother w/the quote).
Lord, help me.... How many more years of this??? |
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| ChemEnhanced |
| quote: | Originally posted by virtualtrancer
yes your insurance will go down because when you turn 25 your in a different class of divers which is better for your insurance. However your driving a 2dr 2001 sunfire which isn't good because its a 2dr but just stay with your company if your getting any discounts such as family discounts if your with your parents company, if your not i suggest ask your parents company for a quote. remember its a soft market right now for most insurance companies so they will look better at you right now rather then if it was a hard market...good luck |
hmmmmm....I detect someone else who is in the insurance industry |
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| tatgirl |
| I used to spend $700/year on insurance b4 I moved to this stupid province. It was twice as much to get insured here on a clean record, and now I'm paying double that. :( |
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| AdReNaLiNa |
| I was surprised that RBC actually quoted me cheaper than PC Financial.. looks like I'll be getting my insurance where I'm doing my banking.. how convenient :) |
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