Canadian Underwriter

’Tis the Season: How to explain motorcycle and snowmobile coverages to clients

November 23, 2021   by Brooke Smith

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You may be getting a few calls about cancelling motorcycle insurance. Unlike automobiles, however, motorcycles (and snowmobiles) have seasonal insurance coverage that distributes payments for the riding season over the course of a year.

But many riders don’t understand why they’re paying throughout the year when they’re riding only three (maybe four) months of the year.

However, that’s the way insurance companies have set up the premium.

“If [insurers] made it the same as auto — where it would be a cancellation based on the number of months in force — everybody would just ride in the summer and cancel the policy in the fall,” said Scott Logan, director of personal lines at Mitchell & Whale.

“But that’s when the premium from the insurance company is being earned for motorcycles — March to October.” (It’s similar for snowmobiles but the premiums are earned from November to March.)

“In the old days, [clients] had to pay the premiums over six months, not 12, so that eliminated a lot of this problem,” said Logan. “But [insurance] companies changed that to a monthly payment plan to make it easier for people,” he said. “And I guess to attract more business.”

What can brokers do?


Sign on the dotted line

Mitchell & Whale has its clients read and then sign a form explaining the cancellation policy; however, the brokerage still gets clients who are confused, and sometimes even angry. “Quite honestly, even though they sign it, when they cancel, they’re still really mad,” said Logan.


Simplify the language

The brokerage also tries to explain the concept of seasonal coverage, without the jargon. “The insurance industry is great for wording like ‘seasonally rated’ and ‘percentage of annual premium charged,’” said Logan. “We try to put it in laymen’s terms: here’s what it’s going to cost you to ride your motorcycle each month,” and spell out that they pay this out over the course of a year.


Write a blog post

A written explanation can also augment any verbal explanations. Many brokerages now have blogs, so use this channel to post an article explaining the coverage — again, in laymen’s terms.


Talk about the weather

Having weather conversations is another good tactic. Logan reminds clients of the occasional warm days Canada gets in the middle of January or February. “You might have the itch to take the bike out for a ride. You can do that, but if you’ve cancelled your policy, you can’t,” he said.

Despite these strategies, many people still cancel their insurance, said Logan. “For the most part, they just can’t see paying for [the insurance] when they’re not riding [their bikes]. They just don’t get it.”

While drivers can opt for pay-as-you-go insurance, offered by CAA, Logan hasn’t heard of anything similar for motorcycles (or snowmobiles).

“No one, to my knowledge, has been able to figure out how to do that with motorcycles, because, with a car, you have to plug a little dongle into the port under your steering wheel that measures the kilometres,” he said.


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