Cost of cover revs up: Insuring through your motorbike dealer is an attractive option, says Mary Wilson

MOTORCYCLE insurance has soared in the past year, which is not surprising as insurance companies report depressing figures. Norwich Union, for example, paid out pounds 57m but only took in pounds 44.9m. Put another way, for every pounds 1 received, Norwich paid out pounds 1.50 for over-28-year-olds and, even worse, pounds 2 for the under-28s.

As a result, many insurance companies have pulled out and the ones that remain - Norwich, General Accident, NIG Skandia and a few smaller companies - have put on heavy provisions and penalties to reduce their losses.

A spokesman for Norwich Union said: 'At the end of 1991 we looked very carefully at our motorcycle premiums. Several options were put forward, including withdrawing altogether, but we decided to make fundamental rating changes to see if we could get the account back in profit. If we didn't we would pull out, but I don't think that is an option now.' But the increases in premiums are staggering. Alison Kilby, who owns an 80cc Honda Vision that cost her pounds 1,200, has seen her premiums rise from pounds 47 to pounds 213.

The majority of the claims are for theft and the insurance companies' statistics show that motorcycle owners under the age of 28 are the worst risk. Presumably they are not so careful about locking up their bikes, or about where they leave them. And they tend to use their bikes more, increasing the risk of theft. Younger people also tend to buy the more fashionable motorbikes, which are more expensive to repair.

The figures show that riders under 28 are five times more likely to have their motorcyles stolen than riders aged 40 and that an 18-year- old is up to eight times more likely to have an accident than a 40- year-old. In some areas as many as 40 out of every 100 motorcycles on the road were stolen in 1990/1.

The companies that do insure motorcycles have very different criteria.

NIG Skandia's premium for a Honda 500cc, fully comprehensive, in west London, would be pounds 307 for a 40-year-old with full no- claims bonus. The same insurance for a 17-year-old, with a one-year no-claims benefit, would be pounds 3,762 - nearly twice the cost of the bike. NIG is very specific about age; the bands are over-40; 35-40; 30-35; 28-29; 25-27, and the premium rises for each year of age down to 16.

A 42-year-old company director, who has a similar bike in London and is insured with Norwich Union, pays pounds 353. But General Accident quotes well over double - pounds 806. A 17-year-old could only get a third-party policy with GA and it would cost pounds 1,075.

General Accident always restricts riders to specific bikes and offers only third-party cover to those under 25.

Norwich Union, which has a two-thirds share of the market, excludes fire and theft for riders under 28. Norwich wants to know the engine size of the bike and the driver's age and address. The price of the bike is immaterial. Owners can then ride any bike in their engine-size range.

NIG Skandia limits the bikes it insures up to 600cc, as it found that personal injury claims on bigger bikes were very large. It offers policies either for a specified motorcycle or for a specified rider. The cycle contract will insure bikes up to pounds 5,000 comprehensive and pounds 2,500 third party, fire and theft. The rider contract covers third party, fire and theft only, for bikes valued at up to pounds 5,000. NIG insures any rider from 16 to 69 with a full licence, but only up to 60 with a provisional licence. And women riders attract a 10 per cent discount, because they tend to use their bikes less and therefore minimise the risks.

The other option is to insure through your dealer.

Charlie Spencer, who owns a 750cc BMW that cost him pounds 8,000, used to pay pounds 850 for comprehensive cover. He now pays pounds 350 through BMW's insurance, which is underwritten through Lloyd's.

The reason BMW manages such a low premium is that it compiled statistics showing that its bikes are less likely to be stolen and attract a more mature rider. And manufacturers are looking seriously at this option because premiums are becoming prohibitive. As one dealer said: 'Why should you lump together a Honda MZ 125 with an MS125R? The former costs pounds 900 and the latter, a racing bike, pounds 2,000. They should have totally different insurance rates.'

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