My Auto Insurace Premiums INCREASED by 30 percent

[james t kirk]

Got my renewal and my auto premium jumped by 30 percent from last year.

Criminals.

No claims, no tickets, no nothing. Just an increase of 30 percent. Some lame ass letter in there explaining that the cost for insuring the "replacement cost" of my car has increased.

I called my insurance company (TD Meloche Monnex) and they basically said "too bad, so sad"

Increased my deductible from 500 to 1,000 and that saved me all of 80 bucks a year.

This is after Monnex basically doubled the cost of my home insurance over the last 3 years.

Needless to say, I'm going to be doing some serious shopping around in the next week or so.

 

[Doublefault]

Same thing just happened to me. Same insurance company too. Same explanation.

 

[Curious36]

Oh dont worry I think the socialist gov't is going to lower your rates by 15%....oh shit wait that means your still paying 15 percent more

 

[oil&gas]

Aside from greed of your insurance company there is one word to
explain the increase: inflation. All kind of fees are on the rise though
not as outrageous as increase in your car insurance. Some younger
relatives of mine are already hit by escalation in various fees related to
their education. I had to help out a nephew who had to scramble
to pay for all the certification exams required by his schooling. Cost
at the pump is almost as hight as its peak in 2008 even though price
of crude was actually 40% lower now that could be just the beginning of
price rise of many other necessities.

 

[Twister]

They likely increased it , because they heard the NDPs are trying to reduce it.

 

[Serpent]

They made bad investments, lost and now their members have to pony up for them to make up on the losses. The insurance industry is essentially a ponzi scheme:

http://www.wikinvest.com/concept/How_the_Insurance_Business_Works

 

[fijiman]

One of two things has happened here.

First, you changed a key characteristic of your risk profile (moved, different car, longer drive to work, etc)

Second, your insurer has revised their classification methodology. Insurers will charge different rates for different classifications of policy holder. The insurer is constantly researching and refining these classifications. It is a critical part of their competitiveness in the market. It is almost certain that they have not increased ALL rates by 30%. Indeed, the total increase might be minimal, with some policy holders getting reductions which offset your increase.

Anyway, if its any consolation, Insurance is one of the most heavily regulated industries in the country and the Insurer genuinely wants to charge you the "correct" premium for your risk profile (plus a fair profit margin to justify the capital provided by its investors).

And if the above doesn't console you (which I know it won't), then FYI I work in Reinsurance. That is, insurance for other insurance companies. Or as I like to put it "I do to them, what they do to you!"

 

[K Douglas]

They made bad investments, lost and now their members have to pony up for them to make up on the losses. The insurance industry is essentially a ponzi scheme:

http://www.wikinvest.com/concept/How_the_Insurance_Business_Works

Basically spot on. Back in the day when interest rates were higher the insurance companies had a risk free rate of return of 3-4%, now that is in the 1% range they have to make up that lost revenue. My broker told me this explicitly and as consumers we have no recourse because the industry is an oligopoly and tightly controlled.

I live in West Toronto and pay $184 per month for a mid grade SUV.

 

[Toronto`s Finest]

This Ontario Government as well as a few remaining provinces are in bed with the Insurance companies. Case of collusion, & extortion!!!

 

[Jennifer_]

I've heard that this has been happening to a lot of people (just before insurance rates are supposed to be dropping).

I don't drive any more but I always used insurancehotline.com. I have always found the best rates there for myself and I've helped a lot of friends find better rates using that site.

 

[fijiman]

Basically spot on. Back in the day when interest rates were higher the insurance companies had a risk free rate of return of 3-4%, now that is in the 1% range they have to make up that lost revenue. My broker told me this explicitly and as consumers we have no recourse because the industry is an oligopoly and tightly controlled.

I live in West Toronto and pay $184 per month for a mid grade SUV.

Actually no.

This is about Auto Insurance, which is a very short tail business. The premium received is paid is mostly paid as claims within 12 months. Investment income plays a relatively small role here.

However, note that Investment Income plays a very large role in long tail business like Life Insurance, Annuities & Pensions. So your comments (your Broker's comments?) would indeed be relevant there.

 

[fijiman]

that happened to me when I was with State Farm around 2001.. I asked about it and they basically said that if I did not like it, I was welcome to look elsewhere, which I did and actually got a cheaper rate than what I was paying prior to the 30% increase for no reason.

Yep, exactly.

Each Insurer will have their own classification methodology which they use to derive your rate. They put in a lot of effort in this, and accordingly believe that their rate is accurate. So their perspective is that if you can go somewhere else and get a rate 20% lower, then that means their competitor is undercharging the true cost of your policy and will accordingly lose money.

So while they're not happy to lose your business, they ARE happy if your business goes to a competitor who they believe is going to lose money on providing your policy at a significantly lower rate. (look up "anti-selection" to read more)

 

[blackrock13]

When it happened, I learned that it is best to deal with a reputable insurance broker. They deal with many companies and often find a good deal!

Now I have to use public insurance (government run monopoly)... it has its good and bad points... at least everyone gets raped equally by the government

If you qualify, try Grey Power. I got a quote from them that sounded too good to be true, but we went down the present coverage I already have and have had for a long time and it was apples and apples, with a saving of almost 30% with a plus of one forgiven accident and half the second one at no extra charge. I'd never heard of that before. My previous coverage was with the same company for over 20+ years, but I felt price creep had set in over the last two years, no shit. My old company, when they heard I was changing, tried to polish the apple, still not even close.

 

[james t kirk]

One of two things has happened here.

First, you changed a key characteristic of your risk profile (moved, different car, longer drive to work, etc)

Second, your insurer has revised their classification methodology. Insurers will charge different rates for different classifications of policy holder. The insurer is constantly researching and refining these classifications. It is a critical part of their competitiveness in the market. It is almost certain that they have not increased ALL rates by 30%. Indeed, the total increase might be minimal, with some policy holders getting reductions which offset your increase.

Anyway, if its any consolation, Insurance is one of the most heavily regulated industries in the country and the Insurer genuinely wants to charge you the "correct" premium for your risk profile (plus a fair profit margin to justify the capital provided by its investors).

And if the above doesn't console you (which I know it won't), then FYI I work in Reinsurance. That is, insurance for other insurance companies. Or as I like to put it "I do to them, what they do to you!"

I have not changed ANYTHING. Nada, not moved, same car, don't drive my car for work purposes as I have a company vehicle for that.

Absolutely nothing has changed.

 

[Margucci]

auto insurance is a strange thing. in the past year i have had 2 vehicles (traded in the first and then bought the second). they are:
1) hyundai genesis couple turbo. $32,000 car, 2 door, sports couple, etc.
2) hyundai elantra GT: 1.6L POS engine, 4 door, hatchback, $26,000

the insurance for the SAME YEAR (because it was traded in in the middle) was the exact same price. why: because the first car was set as a default classification when it was insured at the beginning of the contract period. if i still had the first car now it would have gone up substantially because at this point in time it has been classified correctly. not only do your life changes result in changes to your premiums, they are also affected by the insurance company's procrastination.

 

[james t kirk]

Yep, exactly.

Each Insurer will have their own classification methodology which they use to derive your rate. They put in a lot of effort in this, and accordingly believe that their rate is accurate. So their perspective is that if you can go somewhere else and get a rate 20% lower, then that means their competitor is undercharging the true cost of your policy and will accordingly lose money.

So while they're not happy to lose your business, they ARE happy if your business goes to a competitor who they believe is going to lose money on providing your policy at a significantly lower rate. (look up "anti-selection" to read more)

20 years with Monnex. Never made a claim (knock on wood).

First they doubled my home insurance policy over 3 years, but I stayed with them because of the excellent deal I was getting with my auto policy. Now they are fucking me around on auto as well. Time to take a serious look elsewhere.

 

[fijiman]

20 years with Monnex. Never made a claim (knock on wood).

First they doubled my home insurance policy over 3 years, but I stayed with them because of the excellent deal I was getting with my auto policy. Now they are fucking me around on auto as well. Time to take a serious look elsewhere.

Yep, sounds like it. Don't take it personally, don't feel obliged to be loyal, simply find the best rate for the coverage you need.

 

[rgkv]

What pisses me off the most is in case of accident and my vehicles a right off they give me nothing for it..even less every year yet the premium went up.......give more, get less :frusty:

 

[Rockslinger]

with State Farm

State Farm also recently lost a GST (now HST) case which will cost the industry a billion dollars. Governments are taxing our companies to death and they either pass on the cost or go insolvent.

 

[WoodPeckr]

20 years with Monnex. Never made a claim (knock on wood).

First they doubled my home insurance policy over 3 years, but I stayed with them because of the excellent deal I was getting with my auto policy. Now they are fucking me around on auto as well. Time to take a serious look elsewhere.

All Insurance companies are thieves.
Loyalty matters little to these crooks.

After a few years when my rates would go up .... and they always do, I shop around to others for a better rate and always get one.
You have to shop around when they start 'jacking up' your rates like that.