Risk information - how is the price of your motorbike insurance calculated
The motorbike you own will probably be a different make or model from the person three doors
down from you. Even if you have the same bike your age could be different, you could have a
spotless licence with no claims or convictions whereas they could have a number of speeding
convictions. Perhaps they've added modifications or only have half the years riding
experience you have. Simply put, everybody is a different risk to an insurer.
Every motorbike insurance company will take into account as much information about everybody
who approaches them for a quote and run a number of calculations in order to offer as competitive
an insurance premium as they can. This however, may not always appear to be the case. Some of you
have undoubtedly been quoted absurd prices for your motorbike insurance and will be left in
amazement at how a company can exist if they offer outrageous prices. Well the insurance industry
in Britain is hugely competitive, (If you stop and take notice of the sheer volume of different
motor insurance adverts shown on telly you begin to have an idea just how competitive it is) and
the range of different types of risk the motoring population Britain offers is vast. So in order
to remain profitable insurers will target certain areas of risk or umbrellas of people and aim
to dominate that market. So one insurer will look at covering very safe riders with maximum no
claims discount, whereas another will target only female riders. Another will specialise in high
risk business. This way each insurance company won't be spreading themselves too thin be able
to capitalise on any potential profits available. It is worth noting that insurance companies
don't always look at capturing the same market indefinitely. They may change their target
market so it's worth not ignoring one motorbike insurance company just because you had an absurd
insurance quote the previous year. Or alternatively, you could use Gocompare.com to look at dozens
at once.
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Most people will have to deal with at some point. These claims may or may not be deemed
your fault dependent on the circumstances but they will have to be reported to your motorbike
insurance company every time. An insurance company will usually ask for three to five years
claims history. The reason is that an insurance company will look at each risk and increase
the premiums they quote for on any risk that has fault claims.
This doesn't mean that a claim condems you to pay huge sums for your motorbike insurance.
Because the motorbike insurance market is incredibly competitive you may still find yourself
with a very reasonable insurance premium though that potential is reduced with the more fault
claims you have on your riding history.
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Every motorbike insurance company will rate you on the motorbike you own, riding history,
age, claims and convictions history etc. The same can be said for any additional rider that
you want to insure on your motorbike with you. Adding a rider who is a safe risk, so no claims
or convictions, lengthy riding history etc won't result in much of an increase in your
insurance premium. An added rider who has a long claims history or a number of points on
their licence will pose a greater risk and the premium will rise.
It is always worth giving some serious thought when it comes to adding a rider to your policy.
You should always question whether the added risk is justified by the cost.
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Convictions make up part of the risk that you pose to motorbike insurance company. As a
potential customer you will be asked for any convictions in your riding history up to
approx. five years, though this could fluctuate between insurers.
There are currently over eighty different conviction codes in force. Some are more serious
than others and will this will be reflected in the motorbike insurance premiums quoted for you.
Depending on what type of conviction or convictions you have this may incur added terms &
conditions onto your policy or even a reduced level of insurance cover. You should always be
fully aware of exactly what you policy cover includes as the onus is on you, the customer,
to stay within the agreed terms of your motorbike insurance policy.
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If you have had, or currently suffer from a medical condition or disability that may affect
your driving you must tell the Driver and Vehicle Licensing Agency (DVLA). You'll also need
to provide details if you develop a new condition or disability or one that has become worse
since your licence was issued.
Failure to notify DVLA is a criminal offence and is punishable by a fine.
For further information regarding Medical Conditions please use this link:
http://www.dvla.gov.uk/medical/ataglance.aspx
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How many of you have changed you jobs in the past year? How many of you have moved address?
If you have then there is a chance that the amount of mileage that you cover on your motorbike
has changed and should be considered when you next apply for your motorbike insurance.
Motorbike insurance companies will ask you how many miles you cover per because the more
time you spend out on the road, the greater the chance of an accident or claim.
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This, in conjunction with other factors, will be used to calculate the level of the
insurance premium they offer you. Professional sportsmen and sportswomen, entertainers
or those linked with licensed premises will all find that their insurance premiums higher
than average. Using your motorbike for work could also raise the premium. Even though your
insurance premiums are raised because of your occupation this doesn't mean you won't be
able to find a reasonable insurance quote. Some motorbike insurance companies will look
offer good deals for those people with high risk occupations in order to try and corner
a section of the market so it's well worth comparing the prices of a number of insurance
companies at Gocompare.com
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It would be great if you could park your motorbike up without security in place and walk
away with the knowledge that your motorbike was completely safe and would still be there
when you returned. Sadly though this will very rarely be the case as there are too many
opportunistic thieves about who will gladly look after your motorbike on a permanent basis.
Due to these opportunistic thieves, motorbike security has become a must and now appears
in many forms. Examples of security are motorbike chains, ground anchors or alarm and
immobilisers.
Marking and identification
Put as many security markings on your bike as you possibly can. This will make it less
attractive to thieves and will increase your chance of getting your bike back if it is stolen
and then recovered.
Mechanical security
Whatever type of mechanical security you opt for remember:
- Always try to secure your bike to something solid and immovable, such as a ground anchor. Keep locks and chains off the ground as this makes them much harder to break.
- Although it is difficult to carry around, locks and chains act as a good visual and practical deterrent to casual thieves.
Electronic security
Owners of bikes can help reduce the risk of theft by using properly installed Thatcham
approved security devices. Some security devices may even help get you a discount on
your insurance.
Parking
Park in safe, well lit areas. Try to look for a public car park that is part of the
police approved “Safer Parking Scheme”. For further information and location of your
nearest safer car park scheme go to
www.saferparking.com.
Use a motorbike cover whenever your motorbike isn't garaged.
During the early 1990s, the news was filled with stories of joy-riders stealing cars
and the subsequent damage and suffering they were causing. In 1992, the British insurance
industry tasked Thatcham with improving vehicle security.
Devices are graded by Thatcham into the following order:
- Thatcham grade one - alarm and immobiliser.
- Thatcham grade two - immobiliser.
- Thatcham grade three - mechanical security such as a ground anchor or chain.
Increasing the level of security fitted as standard to vehicles and improving the quality
of installation of security systems has helped to minimise insurance premiums and reduce
insurers’ costs. The scheme was extended in 1996 to include light commercial vehicles, in
1997 to include heavy commercial vehicles and again in 1999 to motorcycles.
If you have a motorbike alarm and/or immobiliser fitted it is less likely that your
motorbike will be stolen - you can therefore expect to pay less for your insurance
policy than someone who has no security device on their motorbike.
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If you are fortunate enough to own a motorbike that's worth the expensive side of £100k
then admittedly I and many others are slightly envious of you, although we would probably
not want to swap insurance cover costs with you. Should an accident occur or your motorbike
be stolen then the costs to the insurance company insuring your motorbike could be very
expensive. It might even be that the parts required be replaced are harder to come by and
cost more. So an insurance company will load for any premiums on expensive motorbikes to
help balance the possible outlay of claims on expensive bikes.
When it comes to some motorbike claims your insurance company will only pay you the
book price for your motorbike. If you have advised them of a value less than the book
value then the insurance company will more than likely only pay out this figure, ignoring
the book price completely.
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If you own a motorbike that's been around for a number of years then you may well
receive a discounted or reduced insurance premium quote. The reason being that the cost
to replace parts of the bike or the book price of the motorbike will be fairly cheap
(relatively speaking) and the insurance quote should reflect this.
There are of course some motorbikes out there which will be collectables or classic
motorbikes. Although these may have been manufactured and produced some time ago the
cost of parts or replacement to an insurer will be potentially substantial. There are
some motorbike insurance companies which specialise in classic motorbikes and will be
able to offer a competitive quote for such vehicles.
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How or what you use your motorbike for will have a great effect on the cost of the insurance
premium you will receive from an insurance company.
If you use your motorbike travelling between family and friends, shopping, or just for the
enjoyment or riding around then this would be the most minimum risk of use to an insurance
company.
If you need business use on your motorbike then the increased risk posed will be calculated
by the insurer and they will offer a more expensive insurance premium. They may increase the
premium to match your increased mileage on the road or perhaps with the possibility of business
goods being transported from one place to another they deem you a greater risk of a claim or
accident.
Below are descriptions outlining the different types of use you ask to have on your
insurance policy.
- Social, domestic & pleasure - This allows cover for day to day riding, such as a visiting family, friends or going shopping.
- Commuting - This covers a rider to and from one fixed place of work. It also includes travelling & parking at a railway station.
- Business use - This allows use of your motorbike in connection with your job, such as riding to more than one place of work.
- Commercial travelling - This covers the motorbike to be used for such things as door to door sales.
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Where you live can greatly affect your insurance premium. For example, if you live in an
urban area one thing you will have to contend with is high levels of traffic. So much so
that congestion charges are being introduced in areas across the country. Given that there
are so many vehicles on the road the chances that you could be involved in an accident
are greatly increased. Motorbike insurance companies are well aware of this and will
increase the cost of the quote they produce to account for this. Naturally this doesn’t
mean to say that living in the countryside means you won’t have a claim or accident but
with fewer road users it's less likely.
Something to be aware of is that many motorbike insurance companies will offer a discount
on your insurance premium if you are able to store your motorbike locked away in a garage
overnight. A locked garage makes potential theft of your motorbike far less likely than if
it is left in your driveway or out in the street. If you have a garage, even if it's for
your own peace of mind then we would advise you to use it, plus saving a couple of quid
on your insurance premium doesn't hurt either.
There is also the possibility that you don't keep your motorbike at your home address.
Students could be a good example of this. If a student has informed their insurance
company that their motorbike is kept at their home address and due to an accident or
claim their insurance company becomes aware the policyholder actually has the bike
kept at their university address then the insurance company could decline the claim
due to non-disclosure of information. By taken out a policy with an insurance company
you are agreeing that all the information you have supplied is correct and true and that
failure to disclose or mislead requested information could potentially lead to your policy
or claim being cancelled or repudiated.
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