Some motorcycle dealers blame rising insurance for drop in sales
"I'm not going to say it's all because of SGI, but I'd say three-quarters of it is."
Jul 15, 2021
In just over three years, Robb Hertzog, owner of the Regina motorcycle dealership Prairie Harley Davidson , estimates he’s lost well over $1 million worth of sales.
“I’m not going to say it’s all because of SGI, but I’d say three-quarters of it is,” he said in an interview Thursday, adding that skyrocketing insurance rates for motorcycles are leading to a decline in the amount of customers he receives.
Hertzog is one of many business owners in the motorcycle industry who have voiced concerns about the increasing expenses for bike owners. SGI is considering upping insurance rates again, by 15 per cent for insurance premiums greater than $1,000 and by $25 to $150, for those that total $1,000 or less , leaving businesses with increasingly dire prospects.
“They just can’t afford to ride anymore,” Hertzog said. “My younger clients are just not getting into it because when your monthly rate is as much or more than your loan payments, it makes it very, very difficult.”
Earlier this week, an SGI spokesperson told the Leader-Post that increasing fees are part of a plan to rebalance insurance rates. This would lead to an annual rate decrease for some types of vehicles and in an increase for vehicles like motorcycles that are perceived to have higher accident risk. A latest proposed rate increase is being reviewed by The Saskatchewan Rate Review Panel.
Insurance rates for new models with large engines, like Harley cruisers, can range from $2,000 to $3,000 per year. While this is enough to dissuade individual motorists from buying, there is also a chain reaction that extends to other parts of the industry as well.
Hertzog explained the number of motorcyclists attending their community events and fundraisers is down by half, leading to a decrease in charity funding of a few thousand dollars, and his bike repair team is getting fewer clients now that people are riding less frequently.
Collin Cossette, owner of Action Cycle in Moose Jaw , switched from selling street models to off-road bikes, a decision motivated by a variety of factors unrelated to insurance, including losing a franchise. He said the demand for street models is not strong enough for him to want to go back.
The few street bikes he continues to carry, have remained untouched for years, brands that would have sold in the hundreds a decade ago. Most dealerships in his area, he said, have lost around 80 per cent of their sales now that more expensive models come with high insurance.
Rick Bradshaw, owner of Schrader’s Motors in Yorkton , estimated insurance rates have increased around 67 per cent in the past decade, causing their street bike sales to decrease from 50 per year to 20.
Most of the clients who visit Schrader’s are older adults who have more disposable income, while younger cohorts are dissuaded by the expense. Prior to the insurance hike, he said more young women were taking an interest in the sport than ever before, but he believes expense has since reduced this trend.
“You can be a high performance car enthusiast and buy a $100,000, loaded-up, 600 horsepower BMW car and you don’t pay any more for that car based on value … But for motorcyclists with the same zero clean record and no accidents, if that bike happens to have a bigger engine or more horsepower all of a sudden you’re penalized dramatically,” he said.
As for Hertzog, he thinks raising awareness of the issue is key to creating change.
“We’ve got to find a way to get people out riding and enjoy life, but it will be a bit of a cost on SGI,” he said. “But the cost of that is worth a lot because I think the industry and the sales and the amount of jobs that were lost are way more money than SGI will ever have lost.”
Sask. Rate Review Panel recommends decrease in auto rates
Regina Leader Post: Mark Melnychuk
October 22, 2021
The Saskatchewan Rate Review Panel (SRRP) is recommending the provincial government approve a decrease in rates for the Saskatchewan Auto Fund.
The Saskatchewan Rate Review Panel (SRRP) is recommending the provincial government approve a decrease in rates for the Saskatchewan Auto Fund rather than the revenue neutral rate change that was originally proposed by SGI.
In June, SGI submitted a rate proposal recommending an overall zero per cent rate change for Saskatchewan Auto Fund rates, including an overall 1.7-per-cent rate increase and a 1.6-per-cent rate decrease to the capital margin for all vehicles. After reviewing SGI’s application, the SRRP is recommending that the original rate change be increased to 2.2 per cent, and that the capital margin be further reduced to 3.4 per cent. This will lead to an overall estimated reduction of 1.3 per cent in rates.
Albert Johnston, chair of the SRRP, cautioned that the reduction is an average, so not everyone’s rates will go down. Across the portfolio of vehicles insured by SGI, roughly half were paying too much and the rest not enough. The changes SGI proposed are an attempt to rebalance rates to ensure each vehicle is paying enough to cover the cost of expected insurance claims.
Smaller vehicle groups such as taxis, motorcycles, motorhomes and police SUVs will see an increase. Johnston said that even within the more common classes of vehicles such as cars, SUVs and trucks, some will pay more and some will pay less. He said some of the increases are due to more expensive technology being put into vehicles that can make them costlier to repair.
SRRP’s recommendations are based on the fact that SGI’s original implementation date had been August, which was later changed to January of 2022. That delay resulted in an overall rate indication increase of about half a per cent.
SGI’s updated financial information for the end of the first fiscal quarter showed better results than what the Crown had budgeted, with investment earnings up and claim cost and operating expenses down.
The SRRP also had SGI update its capital surcharge, which resulted in a 1.8-per-cent decrease.
The SRRP also recommended that SGI’s proposed 15-per-cent cap for base premiums greater than $1,000 be reduced to 10 per cent, and that a scaled cap with reductions ranging from $25 to $100 be implemented for base premiums up to $1,000.
The SRRP also recommended SGI re-engage with the province’s motorcycle community and taxi industry to sort out issues pertaining to those groups.
Around 2014, Johnston said the panel made recommendations that SGI engage with the motorcycle community and other stakeholders to increase motorcycle safety in the province. This led to an increase in training requirements with a graduated licence program.
Despite the province seeing a reduction in motorcycle accidents and claim costs in the past few years, Johnston said the premiums received are still insufficient to cover the claim costs.
“We’re just suggesting that they re-engage that group and see what additional things they may be able to do or come up with in order to make motorcycling a safer activity and therefore maybe decrease claim costs,” said Johnston.
The panel recommended the province engage with the taxi community due to a number of challenges facing the industry. This includes rising licensing costs and insurance premiums, competition from ride sharing services such as Uber and Lyft and the pandemic hitting the industry hard during 2020.
“They’ve gone through a very tough period of time, and we’re just encouraging the government in general to engage with them to see if there are ways that they could assist them either through reduced premiums or something like that,” said Johnston.
Johnston pointed out that taxis do have a high rate of accidents and claims costs, so any safety initiatives the industry and government could come up with would help as well.
SGI Assault on Biker Culture
The SGI rate review board met with aggravated riders in an August meeting to discuss the planned January rate hike that will affect the entire community. The 30-minute presentation by Riders Against Government Exploitation’s Don Fuller explored SGI supplied numbers and charts showing the faults in the government’s view of dealing with the situation. R.A.G.E. wasn’t the only voice for riding community at the meeting that evening. The Saskatchewan Motorcycle Coalition (SMC) made a brief presentation that supported the thoughts of the motorcycle enthusiasts, along with a variety of individuals took their position in front of the microphone and said their piece. Randy Padfield of the Southern Independent Riders plead the case for young riders that are forced out of the sport by the rate hikes that have occurred in past years. His group, he said, has their youngest member at 35 years old, and no one new to take up the mantle of the club if this trend by SGI carries on the way it has.
Fuller’s use of the SGI numbers in his presentation were questioned later in the meeting, by the panel, as being somewhat taken out of context. Rhonda Cwynar, also of R.A.G.E. immediately clarified the source of the number and its relevance for the context it was used. Despite the push back from the committee, the almost 150-minute meeting ended with questions being asked towards SGI, and a variety of non-committal statements that cast a doubt on whether or not the panel was going to attempt to remedy the rate hike at all. The R.A.G.E group has sat with the review board on previous rate hikes and was responsible for SGI implementing changes to the safety around new riders with mandatory clothing; riding daylight limitations imposed on new riders; and the safety riding course. These were small changes that dramatically dropped the numbers once put in place.
SGI continues to look at motorcycles separately from the rest of the Auto Fund, basing the rates not on the individual rider, but rates are going up based on engine size and category of motorcycle. Fuller suggested an analogy that this was like upping the rates because you drove a blue GMC on a Tuesday- and had no basis of being the foundation of deciding anything to do with insurance rates. In a provincial comparison from Manitoba who had a 100% goal in their auto fund, Saskatchewan set its goal at 140%... but currently sits at 163% as they suggest that its time for rates to rise. Motorcycles make up 1.7% of the Auto Fund- and SGI stated to the public that motorcycles must “stand alone” financially within the Auto Fund”.
“Leaning on the rate wheel” Fuller said- that was SGI’s fix for everything. Then went on drawing the comparison of the time of the oil boom to the “wild west” as he went through the statistics of a sharp rise in .08s, deaths and injuries during that period. R.A.G.E sat with SGI administrator Don Thompson and over the issues even back then. Thompson would be quoted as saying: “It doesn’t matter anyway in Saskatchewan. The insurance you buy is the insurance you get.” When talking about every vehicle in any collision- and stats show that in that time from 2012-2019, that other vehicles are at-fault in excess of 54% of collisions. This with SGI adopting the adoption for loss transfer for all vehicles, that claim costs reduced by 40%. That the vehicle that causes the accident would take the financial consequences of that accident rather than punishing the victims of it.
Motorcycle rates are based on categories like class of motorcycle and engine size on a 3-page chart that covers anything ’82 and older up to 2022. It was raised as a concern that power/weight ratio for bikes would be more likely to show which bikes are a higher risk than the current standard. The follow up Q&A also brought up those riders aren’t as likely to plate their bikes year-round as prices go up, and have taken to using weekly permits, and saving their money for when the weather is good for riding. This compounds SGI’s problem of losing the revenue of people that used to plate all year and are no longer willing to do so. They have essentially priced themselves out of the market through “leaning on the rate wheel” again rather than taking into consideration factors that could take them back to a surplus like in 2015.
Whether or not you participated in the meeting, you can watch it on the R.A.G.E Facebook Page: Saskatchewan Rate Review Panel - Aug 16, 2021 - YouTube and get the full impact of just what lengths they have gone to for the motorcycle community. Understanding all the ways that SGI has improved through the involvement of groups that advocate on your behalf and appreciate that there is someone in your corner that is willing to stand in front of you and say ‘no’ to the assault on each of us. The motorcycle community has been singled out and faces a slow-moving systematic annihilation… we are being pushed to the point of extinction by making it too expensive to reasonably insure motorcycles. The fault is in the narrative that SGI is pushing and ignoring root issues rather than creating solutions to the problem at hand.
Motorcycles have been part of our culture for over a century, and we are becoming extinct. The sport is being dismantled, and we are looked at as being antiquated- a thing of the past. The younger crowd are less likely to participate in motorcycle clubs because they cannot afford the costs. The sales of companies like Harley-Davidson are dropping off… and the new generation of riders aren’t interested in being what a traditional rider was. There was a generation who were raised on Easy Rider and listened to Steppenwolf, then the next generation saw interest through Sons of Anarchy- but held the same desire to ride on the open highways. Separated by the next generation who have a different view of motorcycle riding- but only as a means of transportation rather than inspiration. Maybe the sport has its life? We are just sitting on life support- waiting for someone to pull the plug on the old ways? There are fewer people riding these days… why does no one pay attention to the assault on the motorcycle culture the way they do any other culture? Shouldn’t we receive the same recognition and celebration of being a social diversity?
ZUCKER-BOTS TAKE DOWN NEW BOOGIE EVENT POSTER BECAUSE OF COMMUNITY STANDARDS...
Unnecessary Contributions for the Disingenuous Masses In A Time of Apathy...
We are stuck in the rut created by the pandemic- forced into our homes during the lockdown, then invited to work from home rather than put ourselves in the line of fire from the pandemic... and as we thought that we were on the way out of the darkness, we get blindsided with yet another mutation that will drag it out for another surge that no one wanted to have to contend with. Now that many have discovered they can do their jobs from home effectively, 80% of the workforce want to stay at home rather than return. Good for the worker, good for the business- they have found another way. For any that were disenfranchised during the pandemic have moved from their last job in search for something new- discovering their dreams as a YouTube contributor, or just reaching out for more money at the next job... It's not a shortage of workers, so much that it's easier to get a new job with more pay than it is asking for a raise that you'll never get. The economy is facing an upheaval in what worked pre-pandemic and is struggling to catch up to the freedom discovered from working through it all from the comfort of your pajama bottoms.
Much like that situation, we have found that it's easier to ask a question on Facebook rather than a few more clicks and find the answer for yourself. Although the answer is readily available- the willingness to find an effort to discover it has fallen victim to the laziness of waiting endlessly until someone delivers an answer to them. What happened to the curiosity of the individual? What time passed that we no longer hunger for information that we would search it out? This is what the pandemic has left as its legacy- we are lethargic and lazy from binge watching Netflix over the years and have fallen into a rut that has removed the basic human desire to put the slightest effort in. We have become entitled, believing that we shouldn't need to work as hard as we did pre-pandemic and that the world should serve us more because we aren't willing to go that extra mile for ourselves anymore...
As if getting you the correct information in a timely fashion wasn't hard enough through miscommunication and general human incompetency- adding insult to injury, the algorithms that Facebook is using to make sure that SPAM doesn't fill the page has taken down the poster twice already. The already rampant-post-boogie onslaught of crap that appears when no one has their own pictures to post has started... re-hashed cartoons relevant to the bikers will go through the community like syphilis and without any checks and balances will be allowed to slowly turn into those images where people get a definition of what personality they have depending on what image their brain sees first! Somehow we can't filter out this stupid crap- but suggesting that useful information that people will be asking for is captured by the binary policing of the inter-web!
Facebook could be a useful tool- but instead it is used by a bunch of tools that have to post something as not to be left out, or continue some outdated image with random text that passes for having an opinion- not a real opinion, just edgy enough to sound cool, but center-ist enough to get likes and shares than have any true purpose for being there in the first place... by I digress.
The goliath of social media chat rooms doesn't easily offer a way to argue whether the post is spam, only that you disagree with the decision- and then you're left to make assumptions about what got it flagged in the first place. Thirty minutes later of scouring the page, you get to a list of options and catagories where one will allow you to send a message to clarify just WTF is going on- but until that resolution comes to light, you're under the threat of the group being closed down completely... Zucker-bots are looking for key words that are repetitive... so mentioning the same events on generally the same dates falls into their trap. So... we will wait and see what comes of all this and if the St. Victor page gets pulled down- it will be because I wanted to put up the event poster, and let everyone know the information that will appear in the messages between Harley Santa Claus and Personality tests... Wonderful!
I'd rather SkyNet killing us off before the censorship of ones and zeroes taking down my art!