Although Revised, the new SGI Rate Review Request is going to hurt the motorcycle industry and community.

At least that is my uneducated take on things.

I am totally confused by the revised rate review proposal from SGI

I will admit that I do not understand insurance and how it works, but I do know this, even with this revised proposal the motorcycle industry is going to get hit HARD in Saskatchewan.

Motorcycle dealerships DEMO plates will go up by 21%

So how many dealers will be reducing their fleet of demo bikes?

How will a rider get to ride a machine to know if it is the right bike for them?

L – Dealer Plates:	4.8%
Automobile	4.5%
Motorcycles	21.1%
L – Snowmobile Dealers	1.7%
LV – Antiques	22.7%
LV – Buses	25.6%
LV – Buses (Restricted)	22.5%
LV – Motorcycles:	16.8%
Cruiser/Touring	16.5%
Dual Purpose/Other	22.2%
Sport	16.8%
Motorhomes	15.7%
MT – Snowmobiles	0.0%
PB – Passenger Inter-City Buses	14.2%
PC – Passenger City Buses	16.6%
PS – Passenger School Buses	26.7%
PT – Taxis	16.4%

Current Annual Rate	Maximum Cap
$1 – 50	$25
$51 – 100	$50
$101 – 250	$75
$251 – 500	$100
$501 – 750	$125
$751 – 1000	$150
$1,001 or greater	15%

Customer impact

If SGI receives approval for the increase with rebalancing, as well as the surcharge, it would mean:

                  Rate increases for about 63% of Saskatchewan vehicles with an average annual increase of $35;

                  Rate decreases for about 35% of Saskatchewan vehicles with an average annual reduction of $21; and,

                  No rate change for about 14,000 vehicles.

For information from the Rate Review Request – visit: http://www.saskratereview.ca/index.php?option=com_content&view=article&id=8&Itemid=6

to find out more

Now I have done some math of my own to figure out what the income to SGI would be for the motorcycle class.

I have used the media figures of approx. 25,000 motorcycles being registered because Mr. Thompson said the TIAC numbers were not relied on by them (11,767)

I am also estimating average insurance premiums per year for demonstration purposes.

If 25,000 riders paid an average of $800 per year, the income for SGI from those riders would be 25,000 x 800 = $20,000,000

If 25,000 riders paid an average of $ 500 per year, the income for SGI from those riders would be 25,00 x $500 = $12,500,000

If 20,000 of those riders also insure vehicles and the average plate is going to increase by $35.00 then those riders are contributing another $700,000 to the above totals. Am I wrong?

So what are the numbers? Well without knowing how much was paid out in claims for motorcycle crashes, all I can do is guess – and guess high to be safe….(all I know right now is that there is just over 9 million in shortfall apparently)

According to the 2010 TIAS Report – Page 43, section 6 – Vehicle Factors

There were 308 crashes involving motorcycles.  Look at the stats for bicycles!

2010 Stats
	Bicycle	Alcohol	Motorcycle
Property Damage	37	653	120
Injuries	126	198	183
Deaths	2	6	5
	165	857	308

So, if all THREE types of claims were 100% the riders fault and all costs were borne by the motorcyclist, and the average claim was $120,000 – the costs would be approx.:  308 x $ 120,000 = $36,960,000 of which 15% is administration costs roughly (this is an estimation of admin costs).

Now, if as SGI Claims, and the rider is at fault 52% of the time that number would be $19,219,200

That is $19,219,200 for 52% of the fault for 308 claims of an average of $120,000 each.

I am really struggling with the numbers here, and low and behold Mr. Thompson finally emailed me; I had put in two request for information since Monday after Friday’s missed deadline, and got this response this morning:

Don Thompson

7:07 AM (13 minutes ago)

to me

As you may have seen we have resubmitted our rate request.  The last several weeks our priority has been putting together a revised rate program and submitting it to the rate panel and putting up on our website.  We are now returning to the many requests for information.  We should have it all out next week.

So, the mystery continues as to how SGI can have a shortfall of $9,000,000 dollars, continues for me as I just do not understand the methodology or what the real numbers are and look forward to having some of it explained – how about you?

If any rider who reads this blog is or knows of someone who can explain the insurance rating system and the real numbers to me, and my readers, how to evaluate what the real numbers are, I would deeply appreciate it as I am sure others would.

The Cars/Pickups/SUV against the Motorcyclists strategy in their marketing materials and press releases

has SGI looking like they are attempting to create a hostile environment between rate payers.

I urge you to please support R.A.G.E. in their efforts to thwart the rate hike and have a seat at the table to discuss better injury reduction strategies.  You can also purchase any of our patches on www.beltdrivebetty.com and we will donate $2 towards R.A.G.E.

Have a great day everyone – hope you enjoyed this weeks Busted Knuckle Chronicles…And please go vote for my Beaver Mascot’s name….

Thanks!

Belt Drive Betty

Editor & Rider