I bet the very title of this article instinctively made you want to scoot right past and head for some neat-o trip report. I know that it took some convincing for me to tackle this subject, as it can be less exciting than watching a trailer hitch rust. However, during my foray into the insurance world I found some interesting tidbits. Insurance is also important stuff. It’s kind of like air in tires or gas in your tank: without it, you don’t ride. Therefore, with some trepidation and the horrid thought of putting all my good readers to sleep, I decided to tackle the issue. You may want to brew up a double hit of espresso just to keep your eyelids open…
Insurance started out before the Leafs last won Lord Stanley’s cup; as a matter of fact, insurance premiums were first being argued over around 3000 BC and really got cooking
around 2100 BC under the Code of Hammurabi. Since ships were the main mode of transport, it was then known as bottomry, or the advance of money on the security of a vessel to protect against the loss of the cargo by marine perils, like sinking. Under the Code of Hammurabi, the premiums were a whopping 20% of the value of the cargo. The Roman Emperor Justinian must have thought this was a bit of a rip-off and dropped the rates to a paltry 12%, which still meant that shipping stuff by sea was a risky business, but at least Justinian knocked a few points off the premium.
After a few centuries of unmitigated profiteering and all the shady stuff that goes along with it, the term bottomry morphed into marine insurance. Merchants from the trade centres of the Mediterranean organized things around 1255 when the Merchant State of Venice codified the principles of mutual insurance against the loss of pillage through contribution, and thus a pretty rusty version of modern insurance was born. It also must have taken quite a while for things to really take off, as the oldest known marine policy was written April 24, 1834, for a vessel named Santa Clara, and it covered four bales of textiles going from Pisa to Savona. I have no idea if everything made it there in one piece or not; maybe someone with way too much time on their hands can fill up a winter’s night and answer that question.
Now the basic concepts of marine insurance were roughed out, and some movers and shakers of the day saw a few opportunities. There were some blokes who hung around a coffee shop founded by Samuel Lloyd in 1688; given the era, the talk was probably about business and wenches, or wenches and business – that part we’ll never know – but the place was very much exclusive for the transactions of insurance amongst underwriters and merchants. It must have been a pretty laid-back affair, as it took them 46 years to produce the first official list of vessels and values. But “Lloyd’s List” was published and it’s still going strong today, more than 250 years later. Considering all the nasty things that have happened over the last two and a half centuries, the business conducted in the Lloyd’s coffee shop must have been stable and should I mention, hmmm, profitable?
Now we can flash forward from 1734 to 1895. The shipping business was still very much the main way to get around, but now automobiles were on the horizon. Somehow I can just picture this horseless carriage thundering along at five miles per hour with an insurance agent running behind it, obscured in a cloud of smoke and waving some well-inked insurance papers. The first automobile policy was written in England in 1895. The reason insurance was even considered was much the same reason you hear today: “driving is a privilege,” ergo: cough up some insurance dough or walk.
It took a little longer for automobile insurance to migrate across the big pond, but like any pandemic, it made it to the New World. The first automobile policy was begrudgingly sold to one Dr. Truman J. Martin. The policy was written to protect the good doctor’s assets in case he clobbered a horse. Considering there were eighteen million horses in use and only four thousand automobiles, there was probably a good chance of equine damage by some newfangled technology that was probably just a fad anyway. Traveler’s Insurance Company sold the policy on February 1, 1898. The premium was $12.25, and it covered the Doc for up to $5000, which back in those days would probably buy some serious horseflesh.
Today: Now comes the scary part. Let me ask you this: You shuck out a ton-o-bucks for an insurance policy. When you get your motorcycle or car insurance policy in the mail, do you read it, like really read it, all the little print? Or on the other hand, do you rip off the pink portion, stick the pocket card wherever you stick it and file the policy in some filing cabinet? I did that. I did that for years, but I don’t anymore, as there’s a bunch of stuff you’re paying for, or you may think you’re paying for, that you may or may not be getting. The only way to find out for sure is to have two good things on your side: A good insurance broker (or a contact who knows your policy inside out) and your own common sense, which will dictate that you should read that package that just arrived from XYZ Insurance.
I’ve been keeping an eye on a few rider forums. One seems to be cluttered with insurance comments, and that’s putting it politely. I started to pick up a common theme throughout, which is: The Bottom Line.
It usually starts with someone posting that “XYZ Insurance has got to be the cheapest and best deal by far, look at what I’m paying for my ’94 Wing!” Within a few minutes there’ll be a following post stating something like: “Are you nuts? You’re paying four times what I pay. You’re being ripped off! Stop being a jerk and go with ABC Insurance.” There was even an American rider who scanned his policy and fired it into the fray. After looking at that I can tell you, there are some unusual insurance deals available in the States. The one I saw, though legal in the state it was issued, was virtually worthless as far as coverage goes, but it sure was cheap. After a while, it all seemed to go from the sublime to the ridiculous and always focused on the bottom line. Everything in between, like the coverage your dollars are paying for, seems completely unmentioned.
From what I was reading, I could see that there’s a huge disconnect between the insurance companies and the person who purchases the policy.
Let’s face it, would you be moaning about a few extra premium dollars if you knew you had exactly the coverage you wanted and that you had shopped around and found a price that gave you the coverage you need? I wouldn’t. I may groan that a rider of the same model of bike may pay less in New Brunswick, or I may be ecstatic that I’m paying way less than a like rider in Quebec. Regardless, a simple and understandable explanation would go a long way. It all seems to come down to the insurer/rider disconnect.
Given the fact that I’m nosey and I like to see Mojo readers get a fair shake on things like insurance, I approached the four major insurance underwriters in Canada. You may have had an insurance broker write you up a policy, but chances are that the company that writes the cheque when you make a claim will be one of these four: Aviva, Jevco, Echelon or Primmum. I went to all of their websites on March 09, 2010, and used their “contact us” links to submit the same request.
Fair enough request, wouldn’t you say? Well let me tell you what happened. Out of the four contacted, only two replied, Primmum and Aviva. Wow, a 50% response rate from real grown-up corporations that have their very own “contact us” links. Perhaps that’s one reason for a rider/insurer disconnect. Personally, I would be ashamed if my company’s “contact us” centre appeared to specialize in silence! I’d even be satisfied if I received a terse message telling me to “pound salt, we don’t have time to respond to a national motorcycle magazine.” It may not be the answer I want, but at least it’s an answer. I also hope the CEOs of the companies that didn’t respond are reading this.
Given the response, this now lets me talk with impunity about Primmum and Aviva, who contacted me both by phone and email. Afterwards, they called again to clarify some points and then produced an answer. Jacqueline Burns from Primmum and Glenn Cooper from Aviva Insurance couldn’t have been more pleasant or more helpful. This is what they said.
Dear Insurance Company:
I am in the process of preparing a balanced article on motorcycle insurance in Canada.
My intent is to have our readership understand how motorcycle insurance works and stay away from the age-old comment that “my insurance is two bucks cheaper than yours, so you’re getting ripped off.” I need to explain motorcycle insurance in terms that the average Canadian rider will understand.
I wish to convey your message to our demographic (this can be viewed at our site, www.motorcyclemojo.com) in such a manner that they stay awake long enough to read it (not to say that I’ve picked a dry topic, but…) and come away with an understanding of your side of the fence.
I’ve been viewing some motorcycle-related sites, and insurance appears to be a hot topic, with not much of it positive. This tells me that there’s a disconnect somewhere between you and the rider. I wish to fill the void.
My writing style is available for you to see at the above site, and I always give my contributor copy prior to print, as we are very particular on being correct with our information.
I would be most pleased if you could craft a response specific to motorcycle insurance. I will be asking the same of all the majors: Aviva, Jevco, Echelon and Primmum.
Hopefully I’ll be able to develop an article that will foster a greater understanding of how rates are set, why, oversight and the challenges that insurers face within the motorcycle market.
Should you have any questions, I can be reached by cell at etc.
Your help is much appreciated.
