Rate hike hits bikes hard

SGI has submitted a proposal to the Saskatchewan Rate Review Panel for a net increase of 1.03 per cent to Saskatchewan Auto Fund rates.

Among the rate increases are significant hikes for motorcycles.

Under the proposal, 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.

"In Saskatchewan, motorcycles are a recreational vehicle, not a primary vehicle for year-round use, and their injury claim costs are excessive," said SGI President and CEO Andrew Cartmell in a release. "We debated this issue, but in the end we simply felt it wasn't fair for other vehicle owners to continue to pay more than they should in order to subsidize the rates for this vehicle group.

Motorcycle owners have been quite vocal in their opposition to the proposed rate increases which could see fees double for some motorcycles.

"Very negative," was the way Bill Hartridge, Operations Manager at Harley Davidson of Yorkton termed their customers' reaction.

"We've been getting lots of phone calls. Our customers are concerned."'

Hartridge said the biggest issue is the request to have motorcycles classified as recreational vehicles. He said for many riders they are daily summer transportation.

"For many of our customers they're used as daily transportation," he said, adding it's not unusual; for owners to put 20-to-30,000 kilometres a season on a motorcycle.

"They're not weekend riders," said Hartridge, adding those in the shop are quite typical " as soon as the snow goes it's our daily transportation."

In Hartridge's own case his insurance on the motorcycle he rides will jump from $1,766 to $2,553 a year, an increase he said is difficult to shallow.

"And the sport bike is going to get hit the worst," he added, noting some bikes will see a near 300 per cent increase.

Hartridge said in the shop's case "some of our customers have been riding 25 years," so they will find "a way to come up with the money to ride, but it's not right."

Hartridge said while motorcycles usually take the brunt of accidents, as an SGI accredited repair shop they see a lot of bikes needing repair, and only a small percentage have been in accidents where the driver was at fault.

In Hartridge's mind the only viable solution is to move to a system where owner's can shop around for better rates. He said SGI needs to sell a basic plate and then owners should be allowed to seek out other insurance companies so "you can buy the type of insurance that you want."

There is a petition being circulate to build support for opposition to the rate hikes. It can be signed at Harley Davidson of Yorkton, or at Schrader's Honda, Yamaha, Suzuki.

Among the other changes are a rebalancing, which would result in rate changes for almost all Saskatchewan vehicles. SGI is also proposing a 1.23 per cent surcharge on rates, which would be applied for three years.

"Rebalancing helps to ensure fairness in rating. It takes into account the number of collisions and their severity, including damage, injury and liability costs, for each vehicle make and model, and ensures that each vehicle class is covering its own costs. If approved, about 57 per cent of vehicles would receive rate increases and about 43 per cent would receive decreases or have no change to their rates," detailed an SGI release.

Also included in SGI's rate proposal is a surcharge on every vehicle to help replenish the Rate Stabilization Reserve. The proposed surcharge would be applied to the rebalanced rates for each vehicle. The net result of the rate changes, combined with the surcharge, is a 2.27 per cent increase in revenue for SGI.