Mom says insurance Grinch almost stole her Christmas

Mom says insurance Grinch almost stole her Christmas

JONATHAN SHER, Free Press Reporter

2003-12-19 03:34:34

A London woman and her four-year-old son almost had their Christmas stolen by what seems to many a modern-day Grinch: Auto insurance. Laurie Van Eindhoven, 35, had a clean driving record until this year, without at-fault accidents and traffic tickets.

At the beginning of this year, Van Eindhoven, a single mother who holds down a full-time job, was paying just under $1,000 a year in premiums for her 1995 Honda Civic.

Eleven months later, she received a registered letter in the mail from her carrier, Allianz Insurance Co.

Her insurer was not renewing a policy that was coming due in days. Her broker, Hardiman, Mount and Associates, quoted her a price to get new insurance: $4,500.

What happened this year that would make someone's insurance premiums jump nearly five-fold?

A rash of speeding tickets? Impaired driving? Serious accidents that left people maimed and vehicles totalled?

No. All it took were two fender-benders in parking lots. In the first, Van Eindhoven paid out of pocket to cover $547 damage. In the second, the damage was so minor and the other vehicle so old the other motorist has said she wasn't going to fix it.

Van Eindhoven was at fault (she had been backing out of a space) and expected her premiums to go up.

But she hardly expected to be dumped in what is a last resort for motorists, insurance from the Facility Association, where she will stay for four years if she doesn't have another blemish.

"They're punishing me for something that didn't cost them anything," Van Eindhoven said of her insurer.

With her insurance set to expire this week and unable to afford the hefty premium, she feared she couldn't take her son to a family Christmas celebration in Peterborough.

"I don't know how I'll get my son home for Christmas," the distraught mother said.

Thanks to her own efforts, Van Eindhoven will get home for the holidays: She learned her insurer had not given her enough notice, pressed the issue and had her coverage extended to Jan. 5.

But she still fears that when the bill comes due she won't be able to afford to drive and as a result, won't be able to work full-time and still pick up her son from school.

"A car is not a luxury for me," she said.

Her experience is not unique. Every insurer in Ontario would have done the same thing with two at-fault accidents regardless of severity or costs, according to the industry association -- the Insurance Bureau of Canada -- and the provincial regulator, the Financial Services Commission. Even minor at-fault accidents are predictive of risk, they say.

The rule is simple: Motorists with two at-fault accidents in five years are dumped into facility insurance.

The implication is simple too: Don't let your insurer find out when damage is minimal.

That advice is frowned upon by insurers who believe non-reporting prevents them from measuring risk.

Allianz scolded Van Eindhoven after it found out from an accident reporting centre and another insurer, she said.

But at the Consumer Information Centre of the Insurance Bureau of Canada, Don Stewart reminds motorists they aren't required to go to an accident reporting centre unless damage exceeds $1,000.

Although Stewart won't tell motorists not to file a claim, he does tell them of the pitfalls.

"Putting in small claims is a mug's game," he said.

Copyright © The London Free Press 2001,2002,2003

Auto Message Board:  Views & Opinions about the above

TWO private property fender benders, neither generating a claim, and you directly into facility folks.  I've been there, it's a place you'll want to avoid, even at the cost of shelling out thousands for an accident to keep it off the books.

Careful out there.

And one insurance company has issued a Memo that as of Feb 28th 2004, that any of their policies do not cover 'modified' vehicles.  And it seems a guessing game if that referrers to fuzzy seat covers, tires, or a stereo. I'm sure they'll let you know when you get into an accident.

Paul

I think someone has to do something about it and I think that the government should be the one.

It seem ridiculous to me that we are forced to buy services from companies that want our business only if we don't need it!

The insurance companies took our money and invested in a wrong place, they lost the money and then they are making us pay for it. I don't know much about business standards, but this just seem wrong to me.

I used to pay over $5000.00/year to insure a Pathfinder due to my ticket collecting habit.  

But now, due to my education, I am getting a special rate ( about $250.00/month for 4 cars) so I am not complaining yet.

Quyen

Yeah...  It really is out of hand.  My thinking is that if we are forced to have this "service" the government should step in and regulate the price.  It is one of the only places where discrimination is legal, and encouraged.

Since it's getting to a point where people are afraid to make claims because they are afraid that they won't be able to drive - what good is insurance. I have to be insured on my mom's policy to make it affordable, if I wasn't I'd be able to pay for my 1993 Toyota’s book value in two years of insurance premiums.  This to me isn't the gamble that insurance is all about...  Their business is all about risk, but the with the way rates are today, and with how they are able to raise them to ridiculous levels, there is no risk.

If you think about it the fine for no insurance is $5000...  For lots of people you'd only have to get away with not having insurance for two years and breaking the law would be cheaper.

I know a guy with a 1990 Mustang...  It's mint and only has 24000km's on it.  His record is impeccable and he thought that he'd do the right thing and claim all of the modifications on the car including an appraisal.  His carrier dropped him - too much risk.  Now he can't get insurance on the car because he's been dropped by a carrier - no one will touch him.  So much for doing the right thing.  It's BS.

There is no point to having anything more than liability on a late model car anymore.... You might as well never claim unless you get sued, otherwise your premiums will sky rocket.

Since it's required to have insurance by law, the government should make it affordable and put the risk back into it for the insurance companies.  They have us all by the balls because it's a service that we MUST have.  They can do whatever they want.

Sorry for the rant...  but I hate auto insurance - it should be more like life insurance.

Thanks

--Jake.

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