When will Crown corporations learn that nothing good can come from rate shock?
The latest example of this comes from Saskatchewan General Insurance's recent proposal for rate increases. They're seeking a reasonable 1.03 per cent increase for general auto fund rates, and a 1.23 per cent surcharge that would be applied for three years.
This is fair. When you consider that the cost to insure a vehicle in Saskatchewan is a lot less than other jurisdictions in Canada, people should not complain about a surcharge and a small rate increase. Due to inflation, a rate increase should be expected every 12 to 24 months.
But there was another revelation that caught the attention of many: "increases to motorcycle rates will not be capped. As a group, motorcycle rates are substantially lower than what is required to cover their claim costs. It is proposed that motorcycle rates be fully corrected to end subsidization of their claim costs by other vehicle owners."
It means that many motorcycle owners will be facing astronomical increases this year. Some have projected that their insurance premiums could be higher than the value of their motorcycle.
(Funny, I thought that was a problem reserved for motorist who owned vehicles that were made in the 1980s).
I'm not a motorcycle owner or rider. I think it would be great fun to own one, and I can certainly see the attraction of having a "ride." But with my eye sight, it's probably prudent for me to only drive something with four wheels.
I do agree that motorcycles should be classified as recreational vehicles. It's not essential transportation. It might be an important part of one's lifestyle, but in Saskatchewan, motorcycles are not used throughout the year to travel to work, to the store, or on the highway. Cars, trucks and SUVs are essential. Motorcycles are not.
A slightly higher premium for a motorcycle is a reasonable, debatable concept. A significantly higher premium for "crotch rockets" would also be understandable. (A lot of people would be happy if more of those were taken off the road).
But it's unrealistic to expect motorcycle owners to swallow an increase that could more-than double their rates.
SGI can spin the proposed rate shock all they want by claiming that many motorcycles are only used, and thus insured, for six months a year. But if motorcycle owners want to have year-round protection for their bikes, in case something happens, then they need insurance for 12 months.
A flip-flop from SGI is in order. The Crown corporation needs to find a more reasonable way to increase the rates.
Or motorcycle users will have to hope that the Saskatchewan Rate Review Panel will do its job, and try to short-circuit the rate shock.