MC insurance rate increases in Canada

28 May

In May I was given a heads-up by my local broker regarding my Jevco insurance premiums for my motorcycle. I’m coming to an understanding that there is probably a monopoly in Ontario and that recent increases in premiums are unjustified. My rate in Ontario will be increasing by about 25% and I’ve heard of increases of 100% in Saskatchewan.

Now in August I finished researching and have the final renewal quotes. Due to the increases in premiums I’ve decided to reduce my coverage and get only what is required by law; in other words bare bones insurance. Some companies have website that work only intermittently, some offer 1 800 phones numbers but with long waiting cues and very poor or time in-efficient call back service, email quotes but only with complex on-line forms to complete,  and one local Kingston insurance broker provides personal service and has real people who are experienced and knowledgeable and an address where I can go in person if I wish.  Thomson Jemmett Vogelzang has has my business since 2007 when I purchased my new Suzuki DL1000 Vstrom, with Jevco Insurance ( now owned by Intact) and I’ll renew with them.  The rates do vary for basic insurance: TJV $708 renewal policy; Group Services, Novex, as an addition to my auto policy $670; The Personal $576; Rider Plus $986; TD Insurance $756; and Belyer Insurance Ltd $821.

There is some RAGE in Saskatchewan …

http://www.change.org/en-CA/petitions/sgi-proposed-motorcycle-insurance-rate-increase-re-evaluate-the-proposed-increase-of-motorcycle-insurance-in-saskatchewan

The industry is fraught with gobbledygook and insurance speak that can make it complex and difficult to know what exactly you’re paying for. The permutations of specific coverage details make it nearly impossible to shop and compare. Banks and on-line companies may just be accepting our money but providing little or nothing in the way of service and just confusion in terms of real insurance coverage. Most of us don’t have accidents or claims so we have little or no experience and knowledge to appreciate the benefits or service that we may or may not be getting.  I’m certain that some companies have little knowledge or experience of motorcycles. Most companies don’t even agree on the classification on my bike or won’t disclose it. I do seriously wonder if MC insurance premiums is just a case of price fixing that deserves investigation.

“Price-fixing agreements, like other forms of hard core cartel agreements, are analogous to fraud and theft.  They represent nothing less than an assault on our open market economy.  Buyers in free market societies are entitled to assume that the prices of the goods and services they purchase have been determined by the forces of competition.  When they purchase products that have been the subject of such an agreement, they are effectively defrauded.”  ( Chief Justice Crampton )

I’ve just learned that my group home and auto insurance with Novex is also owned by Intact.  Please see below for a partial copy of a news announcement regarding Intact & Jevco.

(   Note that TD is involved in the financing of Intact’s purchase and that they are also involved with offering motorcycle insurance.  http://www.tdinsurance.com/products-services/recreational-vehicle-insurance/motorcycle/rv-moto-index.jsp?campaignid=DSEARGOOGMOE&gclid=CMfo_uXM1LcCFc9AMgod530AuQ     )

Intact Financial Corporation to acquire JEVCO Insurance Company for $530 million
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATESTORONTO, May 2, 2012 /CNW/ – Intact Financial Corporation (TSX: IFC) announced today that it has entered into a definitive agreement with The Westaim Corporation (TSX: WED) whereby IFC will acquire Westaim’swholly-owned subsidiary, JEVCO Insurance Company, for $530 million. JEVCO is a leading provider of specialty and niche products for individuals and businesses in Canada with approximately $350 million in direct premiums written in 2011 (based on industry data and public disclosure).The transaction, which is expected to close during the Fall of 2012, has been approved by the boards of both companies and is conditional upon, among other things, the approval of Westaim’s shareholders and the receipt of the required regulatory approvals. Alberta Investment Management Corporation, on behalf of certain Funds whose investments it manages, Goodwood Inc. and the directors and executive officers ofWestaim and JEVCO, have agreed to vote their Westaim shares (representing in aggregate approximately 48.6% of the outstanding common shares and approximately 53.7% of all outstanding shares entitled to vote at the special meeting of Westaim shareholders) in favour of the transaction.According to Charles Brindamour, Chief Executive Officer of Intact Financial Corporation, the transaction will complement the company’s offering of insurance solutions to consumers and brokers. “The acquisition will allow us to expand our offering to brokers by providing them the opportunities to offer their clients complementary specialized products such as recreational vehicle insurance. It will also broaden our offering of specialty lines products to businesses.”  CIBC World Markets Inc. is acting as exclusive financial advisor to IFC.

Subscription Receipt Offering

IFC has entered into an agreement with a group of underwriters, led by CIBC World Markets Inc. and TD Securities Inc. for the issuance of 3.6 million subscription receipts at a price of $62.75 per subscription receipt for gross proceeds of $225.9 million pursuant to a bought deal public offering in Canada where each subscription receipt will entitle the holder to receive one common share of IFC upon closing of the acquisition. IFC has also granted the underwriters the option to buy an additional 180,000 subscription receipts exercisable at the offering price for a period of 30 days after the closing for additional gross proceeds of approximately $11.3 million. The offering is expected to close on May 11, 2012.

About Intact Financial Corporation

Intact Financial Corporation (www.intactfc.com) is the largest provider of property and casualty insurance in the country with $6.5 billion in premiums.  Its 10,000 employees offer home, auto and business insurance through Intact Insurance, Novex Group Insurance, belairdirect and Grey Power.

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