Brokers in Saskatchewan are nervous about strategies to remove benefits as a means to keep the province’s motorcycle insurance premiums under control.
“Pulling coverages out, I tend to get nervous about that,” said Garth Neher of Southey Agencies Inc. “For example, one option to reduce the cost of motorcycle coverage would be to pull death benefit out.
“I am nervous about that, because everyone is good with pulling out coverage when they are actually doing it. But after the fact, they will say: ‘Well, no one explained that to us.’”
That could be a potential errors and omissions [E&O] issue for brokers. And it could also make for awkward times during crises situations. Imagine, for example, a scenario in which a motorcycle rider dies in an accident, and it turns out that he didn’t tell members of the family that he opted out of death benefits.
“That is a concern,” said Gail Lawson of Oxbow Agencies Ltd. “It’s a disaster when you find out there are no death benefits.”
The minister responsible for SGI recently formed a review panel to look at SGI’s rating approach for motorcycles – including injury benefit levels provided in the insurance coverage, and to examine ways to improve motorcycle safety programs.
One of several options it is considering is the ability for motorcyclists to opt out of receiving death benefits. (continued.)
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“One of the largest proportions of that claim is the death benefit,” said Donna Harpauer, minister responsible for SGI. “I don’t know if this is what will come out of that committee, but perhaps what they (riders) will be able to ask themselves is, ‘If I have life insurance, do I need death coverage?’ ”
The review panel emerged after motorcycle riders expressed widespread opposition to proposed insurance rates submitted by SGI in February 2013. If approved, the rates would have meant rate increases of 57.6% for cruiser/touring motorcycles, 128.7% for sport motorcycles, and 73.6% for dual purpose and other forms of motorcycles.
Faced with an onslaught of concern, the government ordered its insurer in March to cap motorcycle insurance premium increases at no more than 15%.
Several brokers expressed concern that a “fix” such as opting out of coverage might be worse than increased rates. But there is no consensus around what, if anything, the government can do about increased costs and premiums related to motorcycle claims.
Some brokers don’t see the issue as a major problem.
“I’m not too concerned about it, really,” said Darryn Nibbs of Hoffmann Kool Insurance. “Whether [rates] go up a bit or not is really not that big of an issue. Whether people want to “take on City Hall, that’s up to someone who wants to fight the fight. Which they did. They put a big group together to go after the initial increase.”
Now, he said, “I don’t think it’s a big enough issue to spend a lot of time with.”
