Car Insurance

TORONTO–(BUSINESS WIRE)–Feb. 17, 1997– Pembridge Inc. (TSE:PEM.) based Pembridge Inc. announced today that it has entered into a letter of intent to acquire the business of Jevco Insurance Company (”Jevco Insurance”) of Montreal, the leading provider of motorcycle insurance in Canada. Jevco Insurance issued approximately $45,000,000 of gross written premiums in 1996.

Pembridge will acquire all of the issued and outstanding shares of a new management company, to be known as Jevco Insurance Management (1997) Inc., in a share exchange.

At the closing, Jevco (1997) would own the book of business currently underwritten by Jevco Insurance, consisting predominantly of automobile insurance for motorcycles and other recreational vehicles, and all of the related trademarks and insurance brokerage agreements. Jevco (1997) will manage the Jevco business, underwriting all new and renewal business in Pembridge’s subsidiary, Pafco Insurance Company, from the closing (or as soon as possible thereafter) and will manage the orderly run-off of Jevco Insurance’s activities on behalf of its current owners, for agreed fees.

Pembridge Inc. will initially issue 100,000 of its common shares to the owners of Jevco (1997) as a deposit (to be valued at $1,150,000) against the ultimate purchase price. The final purchase will be adjusted based on the earnings of the Jevco business in 1997 and 1998, with any portion of the purchase price in excess of the deposit being payable by Pembridge through the issue of additional common shares using the average price of the shares in 1997 and 1998. Up to 50 percent of the balance of any amount due can be settled by a cash payment, at Pembridge’s option.

Under the proposed agreement, Pembridge, would employ the staff necessary to carry on the Jevco business. Jevco’s current Chief Executive Officer, Raymond David, will continue to manage the operations of Jevco (1997), after the closing.

Pembridge’s Chief Executive Officer, Douglas E. McIntyre commented that “Jevco clearly dominates the motorcycle insurance market in central Canada and has proven its expertise in this niche, by producing enviable underwriting results. We think the business is very compatible with Pafco’s niche auto business and are confident that Pembridge can easily expand the business through Pafco’s branch offices in other parts of Canada and through its U.S. insurer subsidiaries, to the southeast and Midwest area states.”

The proposed agreement is subject to due diligence investigations, regulatory approval and the signing of definitive agreements. Closing is expected by March 31, 1997.

Through its subsidiaries, Pembridge Inc. specializes in the underwriting and marketing of non-standard automobile insurance to individuals, specialty property and casualty insurance to higher-risk businesses approximately 2,200 independent brokers in all provinces and territories of Canada and through its subsidiaries, agencies forces in the U.S.

SCOTTSDALE, Ariz. — MBA Holdings Inc. (OTCBB: MBAH) has signed an agreement with MicroTrak Technologies Inc. for MBA’s subsidiary, the National Motorcycle Dealers Association (NMDA), to be an authorized agent for the marketing and sale of MicroTrak products. The NMDA will be authorized to market its own private label brand name product as BikerTrak as a MicroTrak exclusive for the motorcycle industry. MicroTrak is a total solutions provider of in-vehicle hardware and wireless location services. MicroTrak has combined the ubiquitous coverage of the Global Positioning System (GPS) with the nationwide Cellemetry cellular network and 24/7 automated Web and telephone accessibility. The Web browser tracking capabilities of the MicroTrak are shown in a demo on the MicroTrak company Web site. Product features include:

–Real-time Internet GPS vehicle tracking motorcycle alarm

–Get motorcycles’ location, speed and direction

–Electronic-geofencing alerts with set predetermined boundaries

–Disable/enable starter

–Fastest speed of the day

–Receive triggered alarm alerts via cell phone, pager, e-mail, fax or Internet

–Flash lights & honk the horn

–Low monthly airtime fee (less then $10 per month)

Structured as a mutual marketing agreement, both companies will endeavor to promote, market and sell their respective product lines for each other. The NMDA will market and sell MicroTrak products to their membership for use on rental operation bikes and direct sale to retail customers. MicroTrak’s 20 agents nationwide are now authorized to recruit new NMDA members and sell MBA warranty insurance products. MicroTrak will join the NMDA as a founding member whereby MicroTrak agrees to issue 100,000 shares of MicroTrak Technologies stock to MBA Holdings Inc. for this membership and the joint marketing agreement.

MAYFIELD VILLAGE, Ohio — People may think they’re being clever when they try to cheat insurance companies, but often they end up making mistakes that get them caught, injured and sometimes even killed.

The Progressive group of insurance companies, the third-largest auto insurer in the country, says while the escapades of people who commit fraud can be amusing, insurance fraud is a serious crime that costs consumers a lot of money. The National Insurance Crime Bureau estimates that property and casualty insurers pay more than $30 billion a year in bogus claims - costs which are generally passed on to consumers in the form of higher premiums.
“People think of insurance fraud as a victimless crime when, in fact, honest policyholders end up being victimized,” said Ray Albertini, Progressive’s national director of special investigations. “Most insurance companies base their rates on the cost of doing business. When costs go up because of fraudulent claims, other customers end up paying the price. People need to be aware of fraud and be willing to report it when they suspect it.”

Albertini says it can be tough to catch the offenders, but sometimes they make it very easy, such as in these –You never know who might be listening. One fairly common type of fraud people commit is buying coverage after their car’s been damaged. What’s less common is when they buy it from the scene of the accident. Take the case of the motorcyclist who wiped out and, while lying on the side of the road with a ruptured spleen, had the presence of mind to call 1-800-PROGRESSIVE to buy coverage. What he didn’t know was that a witness who saw the accident also heard him make the call. In another case, a couple’s car caught on fire. While the husband was on the phone with Progressive buying a policy, his wife was overheard yelling in the background that the car was about to explode.

–When you play with fire, expect to get burned. Some people figure the easiest and quickest way to collect insurance money is to destroy their car by setting it on fire. Not necessarily. Consider the case of two brothers who were hired to set a car on fire. They doused it with gasoline, and to make sure the vehicle would be completely destroyed, they decided to throw in a pipe bomb. The bomb exploded, setting one of the men on fire. He was likely killed instantly from the explosion, but his brother, not realizing that, rushed to extinguish the flames and ended up catching on fire. He ran toward a nearby highway for help and flagged down a state trooper who had come to investigate the black cloud of smoke. The man told the trooper what he and his brother had done and then, like his brother, passed away from his injuries.

–What’s wrong with this picture? A customer said some parts were stolen from his car, and to support his claim, he submitted what appeared to be phony invoices along with Polaroid photos. At first blush the photos looked pretty good, but something seemed a little odd about them. On closer inspection, investigators realized the guy had taken extreme close-ups of a toy car that was the same color and make of his actual car. The customer eventually admitted he took photos of the toy car in an attempt to get his claim paid.

–Miracle cure? A passenger riding in a customer’s car was injured in a crash and needed chiropractic treatment. No problem. The customer’s insurance covered it. However, sometime before completing the prescribed series of doctor visits, the passenger died of unrelated, natural causes. Now, you’d think that a person who is deceased would no longer benefit from a doctor’s care, but evidently, the chiropractor thought otherwise. He continued to bill for treatment for a full month after the patient’s death.

–That’s gonna leave a mark. A woman decided to take her boyfriend’s motorcycle for a ride. Unfortunately, she didn’t know how to drive and crashed it. Luckily, she wasn’t injured. The man, however - afraid his insurance wouldn’t cover the damage to his motorcycle because his girlfriend wasn’t listed as a driver on his policy - decided to pretend that he had crashed the motorcycle. He figured he needed some injuries to make his story credible, so he tied himself to the back of a truck and asked a friend to drag him around a little bit to produce the road rash he would have gotten from the wreck. Well, he got the injuries he wanted, but they didn’t do him any good. His girlfriend told investigators that in fact it was she who crashed the motorcycle.

“People may laugh at some of these incidents, but what they need to realize is that people who commit fraud are taking money out of everyone else’s pockets,” said Progressive’s Albertini.

Albertini leads Progressive’s Special Investigations Unit (SIU), which aggressively investigates and prosecutes fraud to help keep car insurance costs down for consumers. Progressive’s SIU has 258 professionals throughout the country who work with law enforcement agencies, the National Insurance Crime Bureau, and state Departments of Insurance to track down and prosecute people who commit insurance fraud.

Insurers’ use and potential abuse of policyholders’ credit history has grabbed the attention of state lawmakers this year and several are seeking to restrict or ban the practice.

Freshman Rep. Mike Reynolds, R-Oklahoma City, said policyholders should be able to learn more about their credit rating and its impact on their insurance than current law allows.

“It’s not that I am trying, necessarily, to ban credit ratings,” Reynolds said. “I’m at least trying to make them reveal how they arrive at them. Because let’s face it, if they make a mistake, how would somebody ever even know?”

Reynolds said he became interested in the issue a year ago when he received his homeowner and automobile insurance renewals with one policy giving him an “A” rating and the other giving him a “C” rating. When Reynolds obtained his credit report, “It appeared to me to be sparkling” and did not explain the different ratings. When he called his insurance agent, Reynolds was told the agent couldn’t explain how the rating was determined. When he called the Insurance Department, he received the same response.

Reynolds said House Bill 1629 will require insurers to provide more information on how they develop credit rating scores. Reynolds said he does not believe the use of credit histories should be banned entirely, but he worries that consumers are left unprotected in the current system.

“My intent is to have it revealed how the credit ratings are calculated,” he said. “Because it’ll get itself banned if they’re being calculated improperly.”
Rep. Mark Liotta, R-Tulsa, said his personal experience with credit reports convinced him that they should not be used by insurers. When Liotta obtained his credit rating while refinancing a home mortgage, he found it was filled with major errors.

“We found mistakes all over the place,” Liotta said. “They had my wife living in Austin, Texas. We’ve never lived in Texas. They had me living at a house in Tulsa that I’ve never lived at.”

Although the report didn’t have any mistakes relating to his payment history, Liotta said the number of other “off the wall” mistakes convinced him the report was an unreliable basis for determining pricing.

“They say that they can show a relation between people that have bad credit and people that make a lot of claims,” Liotta said. “My response to that is: So what? You’re selling a product and that product has a price and the credit that I bring to the table to me just has no bearing.”

House Bill 1659, by Liotta, would ban all use of credit reports in developing policy prices.

Insurance officials are aware of the public’s growing distrust. Former state Rep. Dan Ramsey, now executive director for the Independent Insurance Agents Association, has asked Rep. Susan Winchester to carry a bill addressing those concerns this year.

“Their concern is if they don’t do something, if they’re not proactive, then there will be a real concerted effort to probably eliminate the credit checks completely,” said Winchester, R- Chickasha.

She said insurers want a “balance” struck between consumer protection and the right of insurers to charge higher rates to high- risk policyholders.

House Bill 1751, by Winchester, is based upon a model drafted by the National Conference of Insurance Legislators and creates the Use of Credit Information in Personal Insurance Act.

The bill prohibits insurance companies from using an insurance score calculated using the income, gender, address, zip code, ethnic group, religion, marital status, nationality, disabilities or physical handicaps of the consumer as a factor. The bill also prohibits insurers from denying or canceling a policy based solely on credit history and prevents an insurer from basing renewal rates solely on credit history. It also states that an insurer cannot take an adverse action against a consumer because he or she does not have a credit account.

The bill would apply to personal insurance lines, including private passenger automobile, homeowners, motorcycle, mobile-home owners and noncommercial dwelling fire insurance policies, personal excess or personal umbrella policies and boat, personal watercraft, snowmobile and recreational vehicle policies.

Winchester’s legislation appears to address concerns recently raised by members of the State Board for Property and Casualty Rates. In a meeting in early January, two board members said they were concerned that insurers could use credit histories to identify and potentially discriminate against low-income workers and minorities and manipulate prices.

Board member Ash Gockel noted that many insurer filings now contain an “extremely wide range of rates” for the same level of coverage, which he attributed to growing reliance on credit scores to determine pricing.

Since an individual’s credit score can be anywhere from 1,000 for a flawless credit record to zero for those with bad credit, Gockel and other board members suggested insurance companies are technically free to create hundreds of tiers when pricing the same policy for consumers.

Uninsured motorist coverage is one of the most important aspects of an automobile insurance policy. Uninsured motorist coverage protects you in the event that you are involved in an accident with an uninsured driver. The coverage will extend to cover you and your passengers for bodily injury as well as your vehicle against damage if the accident was the fault of the uninsured driver.

Some states go so far as to require uninsured motorist coverage. They include:

* Connecticut
* Washington D.C.
* Illinois
* Kansas
* Maine
* Massachusetts
* Minnesota
* Missouri
* New Jersey
* New York
* North Dakota
* Oregon
* Rhode Island
* South Carolina
* South Dakota
* Vermont
* Virginia
* West Virginia
* Wisconsin

Other states may limit the amount of uninsured motorist coverage or limit the application of the coverage. Please see your state’s Department of Insurance or contact your agent/insurance carrier to review the specific rules and regulations for your particular state.

Fortunately, obtaining uninsured motorist coverage is a quick and painless process. All major insurance carriers will offer the coverage as an additional coverage to the standard automobile insurance contract.

The first thing to do is to contact your carrier, or another carrier, to get a quote for this important additional coverage. Obtaining a quote is free of charge. Most carriers will require that they write your entire automobile policy and will not offer the uninsured motorist as a standalone coverage. In other words, if you wish to get uninsured motorist coverage through a carrier other than the one your policy is currently through, you will most likely have to transfer your entire policy. There are three ways to get a quote.

1. In person – Visit your local agency. Contact your agent or another local agent and let them know you would like to request a quote for uninsured motorist coverage. They will set an appointment where you can sit down to review the coverage options, including limits available and the cost of that coverage.

2. Over the phone – Most carriers will offer a quote directly over the phone. In order to obtain a phone quote, contact the carrier directly. You can find the phone number for policy service on the Declarations Page of your policy or on your insurer’s website.

3. Through the Internet – Like the phone quotes, most carriers will now allow you to obtain a coverage quote through the Internet. Direct your browser to the carrier website and follow the links to “obtain a quote.” You may get an instant quote or you may be contacted by a company representative shortly. Some carriers will also refer your Internet inquiry to a local agent who will then contact you directly.

Once you have received your quote, review the coverage amount to determine that it is sufficient to cover you for injuries and well as property damage. The amount quoted will include all of your damages for pain and suffering as well as the actual medical bills if you are seriously injured by an uninsured driver. If you have any questions regarding the quote, be sure to ask the carrier prior to signing the insurance contract.