A ‘motorcycle’ is defined as a mechanically propelled vehicle, not being an invalid carriage, with less than four wheels and the weight of which, unladen, does not exceed 410 kilograms (S. 185, RTA 1988).
This definition includes machines with sidecars attached, but mainly motorcycles are solo machines.
The main licensing regulations for mopeds and motorcycles are contained in DVLA publications INS57P and D100 and the DVLA website.
A ‘moped’ is a motorcycle that has an engine of up to 50cc and a maximum design speed not exceeding 50 km/h (approx. 31 mph).
From the age of 16 the law allows moped riders to apply for a provisional licence, provided that compulsory basic training (CBT) has been successfully completed. This entitles riders to ride a moped on a road with L-plates under a category P licence.
Car drivers passing their car test after 1 February 2001 have to undertake a CBT course before they can ride a moped on a road.
Drivers who held a full car driving licence prior to February 2001 are not required to undertake a CBT, but are encouraged to take it.
Holders of full moped licences, who have passed both the theory and practical tests and are over 17 with a valid CBT certificate, can drive light motorcycles with L-plates.
Most young drivers start by riding a light motorcycle in view of their lack of driving experience and also because of the costs of purchasing and running larger motorcycles.
Licence category A1 permits the holder to ride light motorcycles. These are machines with an engine size up to 125cc and a maximum power output of 11kW (15BHP). Learner riders of 17 and over can ride motorcycles with an engine size of up to 125cc with L-plates.
A category A licence covers machines larger than 125cc in addition to lighter machines.
A full category A licence restricts the holder to riding machines up to 25kW (33BHP) for two years, after which any size of motorcycle may be ridden.
The motorcycle used during the driving test must have an engine capacity of between 120cc and 125cc, which means it is capable of at least 100 kph.
Riders over 21 can apply for accelerated access to larger motorcycles by receiving tuition on a motorcycle over 25kW (33BHP) under approved supervision and passing a test on a motorcycle of at least 35kW (47BHP). If successful, this means they do not have to wait for two years to ride larger machines.
Insurers have to deal with a range of riders:
- The very young and inexperienced
- The inexperienced mature rider
- Riders who have been riding all their lives.
The young and inexperienced rider has been recognised as a particularly high risk for many years. The new risk posed by inexperienced mature riders who ride as a hobby or have not ridden for a number of years and prefer more powerful machines, has been increasing in recent years.
The power of modern motorcycles can be easily underestimated, particularly when the rider’s initial experience was gained at a time when motorcycles were neither so powerful nor as technologically advanced as they are today.
For these reasons, this category of rider has had an adverse effect on insurers’ claims experience.
Motorcyclists will require or consider a range of different insurance options:
Third party liability
The Road Traffic Act 1988 S.143 makes it a requirement to insure against the rider’s legal liability in respect of injury to third parties or damage to their property.
Theft is a major problem for the motorcycle rider and insurers. Over 90 motorcycles are stolen every day in the UK and more mopeds and scooters are stolen than any other type of motorcycle.
Damage to the bike
There is a wide range of prices for motorcycles. A young rider buying their first moped might pay in the region of £1,300, whilst a powerful Kawasaki can cost up to £25,000 or more, depending on the model acquired.
For the more expensive models, it is likely that the rider will want to insure the bike against loss or damage. Publications such as Motorcycle News (MCN), Fast Bikes or Super Bike provide a good indication of prices.
Loss or damage to accessories
The rider may choose to cover expensive accessories to the motorcycle, such as top boxes and luggage panniers. These, too, are at risk of accident damage and theft.
Helmets and protective clothing
Riders and pillion passengers have to wear crash helmets by law (Regulation 4 Motorcycles (Protective Helmets) Regulations 1988 and S.16 (4) RTA 1988). There are also regulations regarding the standard of helmets.
Additionally riders are required to wear suitable visors or goggles. See S. 18(3) RTA 1988.
Items of equipment such as helmets (including spares), leathers, boots and gloves can be expensive and the motorcycle insurance market usually offers cover for these items against loss or damage, for example, from scuffing following an accident or a fall.
It is also usually possible to insure protective clothing under motorcycle policies. However, if insured under a household policy, the cover would need to be extended for loss or damage occurring away from the home.
29,000 road casualties per annum involve users of two-wheeled motor vehicles. Of this figure, approximately 600 will be killed and nearly 7,000 seriously injured. In road accidents involving a two-wheeled vehicle, it is usually the rider of the motorcycle who comes off worse.
Where a third party is responsible for the accident, the rider will usually be able to make a claim for compensation from the third party. In other cases, there may not be an easy route to compensation, so many riders will buy personal accident cover possibly arranged as an extension of cover under the motorcycle policy.
The range of benefits available to riders can range from capital benefits only (death, loss of limbs or sight and permanent total disablement) to capital benefits plus temporary disablement
RTA and Third Party Cover
The main types of cover under motorcycle policies are broadly the same as for other forms of motor cover. These are:
- Road Traffic Act cover
- Third party only
- Third party fire and theft
Road Traffic Act (RTA) cover
It is unlikely that any motorcyclist would be able to buy RTA only cover. Most insurers regard third party only as their minimum cover, offering RTA only cover where a risk is so bad due to claims or other experience.
RTA cover only applies on a ‘road or other public place’ and would not operate say, on factory premises or on private land.
Third party only (TPO) covers
Third party only (TPO) covers liability against damage or injury to third parties. There is no cover for the machine itself.
The main aspects of the cover are:
- Liability for injury to third parties. This involves unlimited liability for personal injury including pillion passengers (RTA 1988 S. 145(4)). Only one person in addition to the driver is allowed to be carried on a motorcycle unless a sidecar is fitted, and that person has to sit astride the machine which must have a proper seat and footrests securely fitted (RTA 1988 S. 23(3))
- The legal minimum requirement for damage to third party property is £1 million (RTA 1988 S.145(4)). This limit is usually increased to a higher amount such as £2 million, £5 million or £20 million in line with private car cover. Some policies may pay up to a further £5 million for claimants’ legal costs, making an absolute maximum of £25 million in respect of third party property damage
- Legal costs incurred in defending a claim together with cover for costs of legal representation if the policyholder is prosecuted for a driving offence. This is to protect the insurer’s own interests. If the policyholder is not adequately represented in court, the resulting criminal prosecution could influence the outcome of any civil claim. The cover only operates if there is a likelihood of a third party claim under this section. Insurers usually give themselves the option of not paying the costs if the driver was clearly at fault and a guilty plea would not prejudice their position.
A TPO policy may also provide additional covers shown below, but each insurer’s policy is different so check first:
- Driving other motorcycles not owned by the policyholder. A policyholder may ride a friend’s motorcycle, but the cover is third party only with no cover against damage to the friend’s motorcycle. This extension only applies to the policyholder and not to any named riders under the policy. This does not apply to motorcycles owned, hired or leased
- Other persons riding the motorcycle with the policyholder’s permission. Additional riders will normally be named or described in the certificate of insurance
- Indemnity to any passenger on the motorcycle who may cause an accident
- If the motorcycle is in the name of a business, insurers may only allow one named person to use the motorcycle for social domestic and pleasure purposes, whilst other insured employees will be insured to use the motorcycle for business purposes only
- Indemnity to the policyholder’s employer if business use is permitted by the policy. An employer can be held liable for the acts of employees in the course of their employment.
These exclusions generally apply to TPO cover and to the third party sections of TPFT and comprehensive policies:
- Any damage caused to the rider’s own property, including the motorcycle and any accessories
- Third party injury or damage as a result of terrorism, apart from any claims the insurer is obliged to pay as a result of any road traffic legislation
- Injury to anyone arising out of their employment by the person using or driving the machine, except as required by any road traffic legislation. This is the ‘in employment’ exclusion found in motor policies where ‘in employment’ accidents are excluded except where the accident occurs in RTA situations and the injured person is being carried as a passenger.
In the event of an insured loss under either a TPFT or comprehensive policy, the cover operates in one of these ways:
- Recovery and redelivery of the machine to the policyholder after repair with payment to repairers for any necessary repairs
- A cash payment restricted to the market value of the motorcycle (in a total loss situation)
- A cash payment in lieu of repairs
- Replacement of the machine. In some cases, where the machine was less than one year old, the policy may provide for replacement with a new machine. This cover is usually subject to a number of conditions.
If the machine is being bought under a hire purchase or leasing agreement, the hire purchase or leasing company will have ‘first call’ on the claims settlement monies to pay off any outstanding balance.
If the claims settlement is more than the outstanding finance, the policyholder will receive the balance. If the claims settlement is less than the finance amount (say, due to interest charges), the policyholder will be responsible for repaying any amounts that remain outstanding. Often this situation is avoided by the policyholder arranging ‘GAP’ insurance cover.
European Union cover
European Union directives on motor insurance require that insurers must provide at least the local equivalent of RTA cover whilst a motor vehicle is being used within most European countries (not just EU countries).
Policies issued by UK motor insurers provide this minimum cover. A green card (international motor insurance certificate) is not required within the EU and other participating countries, although a number of motorists choose to carry one when they drive abroad.
This cover is only the minimum and should not be relied upon if a rider wishes to take their machine abroad. Many policies now provide the same level of cover for the policyholder driving in participating European countries as they enjoy in the UK (for example, TPFT or comprehensive).
This ‘free foreign use’ cover is normally limited to 4 weeks in any one period of insurance. Insurers’ practice varies and it is important to check. Other insurers only add this on request and charge an additional premium.
For travel outside the participating countries, both a green card and an extension of the policy territorial limits cover are required. In some cases, where there is travel outside the green card area, for example to Georgia, the driver would have to buy insurance at the Georgian frontier or arrange special cover before leaving UK.
Cover is against legal costs incurred in the recovery of uninsured losses, such as a policy excess, or compensation for injury. Usually, the maximum sum insured per incident is either £50,000 or £100,000.
In a number of cases this cover is provided as standard. It is usually underwritten by a separate, specialist insurer and only operates where the policyholder stands a reasonable chance of recovering at least a proportion of their losses.
UNDERWRITING AND RATING
Basis of rating
Insurers usually take account of the following factors:
- Engine capacity
- Grouping - motorcycles are divided into groups for rating purposes. The divisions are determined by the cylinder capacity (cc) of the engine. The number and criteria of groups varies by insurer
- District - the area where the machine is mainly kept and used. Most insurers distinguish between rural and urban areas in the same manner as private car insurers. The main underwriting features applicable to district are; density of traffic and crime statistics, especially those affecting theft, malicious damage and fraudulent claims
- Where the motorcycle is kept overnight and security - insurers will usually offer more favourable terms to owners of machines kept in a garage overnight and will usually offer discounts if accredited security devices are fitted (see www.thatcham.org)
- Policyholder and rider experience - the age and riding experience is the most important feature of any motor insurance arrangement. Insurers charge higher premiums for young or inexperienced riders and will offer more favourable terms for more mature riders. There are insurers who will not quote for riders under 25, and others who restrict cover to riders of 21 and over
- Cover required
- Manufacturer - a number of insurer’s rate motorcycles according to the make and model, reflecting the anticipated cost of repair. Parts may be scarce or expensive for machines manufactured abroad.
Each insurer has their own range of use clauses and it is important that the correct use class is selected. Standard use classes are social, domestic and pleasure, with or without commuting, and business use.
Certain restrictions are common whichever use class is selected. These are usually:
- Carriage of passengers for hire or reward
- Pace-making or speed testing (mainly obsolete as processes are now done electronically).
In addition, courier work and fast food delivery may be specifically excluded.
If the policyholder is prepared to limit the mileage of the machine, for example, in the case of seasonal use, the insurers may offer a premium discount. The policyholder must be made aware of any sanctions or reductions in cover if they exceed the agreed mileage figure.
Extra benefits are usually available at an additional charge including:
- legal protection
- personal accident
- loss or damage to protective clothing.
Women riders only
Preferential rates for women riders, who have fewer accidents than men, have been outlawed by the EU Council’s ‘gender directive’, effective from December 2012.
Theft is a major issue with motorcycles and insurers’ terms such as premium, cover and excesses are influenced by:
- Previous claims history
- The area where the motorcycle is used or kept
- The type of motorcycle and any security features built in by the manufacturer or fitted later by the owner
- The location of the vehicle overnight.
Favourable terms such as premium discounts and reduced theft excesses are offered if security devices are installed.
Alarms, immobilisers and secure tagging are typical methods of reducing the theft risk. There are also tracking devices available similar to those available for four wheeled vehicles.
To try to improve the risk some insurers impose a warranty that the motorcycle must be protected by an acceptable security device. For details of these devices, see www.thatcham.org.
Despite these measures, the success rate in recovering stolen machines is limited as many are dismantled for parts soon after their disappearance.
No claim discount (NCD)
NCD is not always offered on motorcycle risks. Where available, scales vary from 10% for one year to as much as 30% or 40% for 4 or 5 years.
Protected NCD may be offered in some cases. Typically, 2 claims are allowed in any 5-year period. 3 claims may reduce the NCD by two years. More than 3 claims and the policyholder will lose their NCD completely.
The policy does not cover any injury, loss, damage or liability occurring:
- If the person riding the motorcycle does not hold a licence to ride the machine, unless they have held and are not disqualified from holding or obtaining such a licence
- Whilst the motorcycle is being ridden by any person or used for any purpose not shown on the certificate. This does not normally apply while the motorcycle is with a member of the motor trade for the purpose of maintenance or repair. In these situations, neither the driving restrictions nor any young and inexperienced driver excess would apply. There would be no cover for the motor trader’s liability and the insurers may look to the motor trader for recovery of any amount they pay in respect of repairs to the machine.
- The policy does not cover loss, damage, injury or legal liability caused by:
- War, invasion, revolution or similar event, however, insurers continue to provide minimum cover to comply with any road traffic legislation
- Radioactive contamination, nuclear fuels or the like
- The machine being used in a place used for takeoff, landing or other associated use
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