Personal finance: Bigger bikes, higher risks

Tim Collison on where to find insurance for the latest thirtysomething fashion accessory
THE MOTORBIKE is making a comeback. Last year motorcycle and scooter sales hit their highest level for 13 years, says the Motor Cycle Industry Association, with over 120,000 machines sold in the UK.

You might think that this is because more of us are buying trendy scooters, but the best-selling bike of 1998 was a whopping great 900cc Honda. The truth is that a growing number of thirty-something and forty-something professionals are splashing out on luxury high-performance bikes to ride in their spare time.

Ensuring that these bikers ride safely is now a concern for the insurance industry and the Department of Transport. The rise of the thirty-something biker led many insurers to think that biking was entering a new, safer era. Far from it.

"The problem is that people are getting on bikes again maybe 15 or 20 years after owning their first bike, without realising that big bikes are a lot more powerful now," explains Richard Alger, market support manager at Norwich Union. "A whole new set of riding skills are now required and many born-again bikers are having accidents because they don't realise this."

So if you are thinking about joining this band of born-again bikers, you need the right insurance. Specialist insurance broker MC Edwards, which has put together a policy for Peugeot scooter owners, offers comprehensive cover at a flat rate of pounds 225. This is reduced to pounds 150 if you just take out third party, fire and theft cover. Insure a classic scooter (more than 20 years old) and your premium could be pounds 40.

The premium for a high-performance bike is more expensive. Under Carole Nash Insurance Consultants' Ultima policy, an office worker of 39 living in Milton Keynes with two years' no claims and adequate security, riding an pounds 8,000 Yamaha YZF-R1 registered this year, would pay pounds 534.

There are three ways to buy motorcycle insurance: through a specialist insurance broker, from a motorcycle dealer (usually arranged via a broker) or from a direct insurer.

The only direct company actively selling motorbike cover is Hastings Direct. When the insurer burst on to the market a couple of years ago, it was offering some cheap premiums. They are not as competitive now but it is still worth getting a quote. Motorcycle Direct is also offering good premiums.

Motorbike insurers have become more sophisticated but there are two basic things all of them look for: adequate security and evidence of safe and competent riding.

Motorbike theft is a growing problem. A bike is stolen every 13 minutes, and for this reason insurers will require an immobiliser on many higher- value bikes. In some cases the owner will be required to garage the machine and secure it to the floor with a ground anchor.

To encourage owners to take theft seriously, most insurers will offer discounts for security devices. For example, Cornhill offers a 7.5 per cent discount for garaging and between 5 and 7 per cent for security devices. Norwich Union offers discounts of up to 8 per cent for immobilisers and tagging devices on its Premier Bike policy.

Anyone wanting to ride a motorbike or moped must complete Compulsory Basic Training (CBT). The training is thorough, covering areas such as bike maintenance, gear changing and junctions.

Many motorcyclists also undertake advanced rider training. Insurers will usually reward these policyholders with a discount. For example, Motorcycle Direct has an agreement with the British Motorcyclists Federation that anyone successfully completing its riding scheme will get a 25 per cent discount.

Most motorbike policies have similar standard sections, covering damage to, or loss of, vehicle, liability to third parties and usually legal expenses. However, some specialists offer policies with a wide range of standard and optional extras.

The first thing you should look for in a policy is an emergency breakdown service. Norwich Union charges an extra pounds 28 for the RAC's service, Bennetts also offers RAC rescue and Motorcycle Direct offers a recovery service from DAS. Lombard is one of the few companies that does not provide roadside recovery.

Most policies will also offer automatic green card cover for riding in Europe. Check whether the policy covers personal possessions; some do not and others have low limits. Carole Nash's Icons has a limit of pounds 1,000 for helmets, leather and other accessories; Norwich Union charges an extra pounds 22 for pounds 250 of possessions. Also ask if personal accident insurance is available - Norwich Union is unusual in offering up to pounds 1,000 of cover.

If your motorbike is damaged beyond repair, some companies - such as Bennetts and Motor-cycle Direct - will replace the bike if it is less than six months old and if the damage exceeds 70 per cent of its listed price.

Finally, you must check the excess. Most insurers will base this on a sliding scale according to the bike's power. It usually ranges from pounds 100 to pounds 500. Beware some of the small ads in the back of motorcycle magazines. The premiums maybe cheap, but the excesses can be as high as pounds 1,000.

Tim Collison is editor of `Professional Broking' magazine.

bike specialists

Bennetts, 0870-333 0007

Carole Nash, 0800-298 5500

Devitt's Direct, 0645 279305

Motorcycle Direct, 01454 419801

Hastings Direct, 0800 001066

MC Edwards, 01536 510100

NU Direct, 0800 125750

For Norwich Union, Cornhill, Lombard and Eagle Star policies, contact a specialist broker.