Insurance: The biggest con in motorcycling

Are we all being scammed on our insurance?

I was just reading the articles below. It turns out that motorcyclists in Massachussetts have been overpaying on their premiums for some time now and are now getting refunds thanks to the Mass Attorney Generals office.

That's great and I wish them well with their checks but what caught my eye was the nature of the scam. It turns out the insurance companies have been quoting and then continuing to use the new value of the bikes as the basis for premiums, but only paying out the current market values in the event of a claim. In practical terms, premiums never went down from year to year despite the fact that their exposure did.

Now, I'm certainly no expert but that sounds EXACTLY how things are done here in Ontario but where is my investigation? More importantly, where is my refund? I wonder if we can raise enough signatures to get an MP to do something about it?

It's not just premiums either, but the whole one-sided nature of the industry. I know I rant about this a lot, but if I wanted a literbike in Ontario at the moment, I could pick up a Fireblade for about $15k. Unfortunatly, it would cost me about $5k a year to insure, and that's IF my insurer would take the policy: most won't as despite the fact that insurance is mandatory, there's no legal requirement for an insurance company to actually offer it.

If I lived in the burbs, that premium would go down to about $1000 per annum, but why the difference? I know they are slightly more likely to be stolen here in the city, but I have an alarm and a garage and I could chain it to the floor, but that apparently doesn't matter either. In fact, it seems nothing you do will change the price of insurance in this province; not your age, not your experience, not your prior history or training - just the bike you ride.

From another perspective, we have an 80cc scooter that's worth maybe $250. The insurance companies are quoting $500 per year. When questioned they admitted it was because the engine was "between classifications" - technically too slow for a highway, but still legal to use them.

As far as I can tell, it's been going downhill a while. If you have a good policy, keep it, as it seems it's becoming easier and easier for the insurance companies to dictate what, where and how you ride. I really don't want to accept that as it seems they won't be happy until I am on an underpowered cruiser, or better yet (from their perspective) inside a large SUV.

I'm off to write a letter to my MP...

More at:

http://www.clutchandchrome.com/news/news/massachusetts-bikers-get-refunds-from-motorcycle-insurance

http://www.insurancejournal.com/news/east/2011/10/05/218602.htm