Despite all the evidence to the contrary the perception of motorcyclists as potential “Hell’s Angels” involved, to quote the FBI, in “violence, drug dealing, trafficking in stolen goods and extortion” persists.

Insurance companies have added to that list of misdeeds the tendency to write off their bikes regularly, thereby placing them in the high risk category, to be avoided at all costs. Still, there are some brave souls out there who are willing to provide insurance for bikers. But at what price?

Premiums and excess payments

Because motorcycle insurance is considered a high-risk, premiums are calculated differently to those for other motor vehicles and it is not unusual for insurers to insist on extra security in the form of early warning systems or steering locks to be fitted to the motorcycle before they are prepared to insure.

Multimon Brokers who specialize in motor cycle insurance, require, for road bikes from R40 000 and over, “proof of an approved self-activating motion censored alarm or factory fitted chip key within 7 (seven) days.”

One motorcyclist claims that, in addition to the R800+ premiums with BMW insurance they also wanted him to install a tracker at a cost of R800 and monthly subscriptions of over R900 a month.

Most insurance companies who cover motorbikes have different rates for off-road and road bikes, cruisers and Harleys, with road bikes, which are built for speed, costing more to insure than the cruisers which are generally slower and have a good accident record and therefore present less of a risk to the insurer.

Riders who only use their motorcycles for recreation are also considered a lower risk, unless the bike is customised with performance parts, in which case the risk factor rises considerably.

Harnacks, a specialized motorcycle insurer, stated with surprising honesty that “sometimes the cost of premiums hurts you more than the damage’ Their answer to the typically high premiums charged for motorbike insurance is to offer a choice of cover at lower premiums but a higher excess. Unfortunately the excess can hurt even more than the premiums.

There are many different factors which affect the amount of excess payable. Here is an example of the way in which the excess is calculated, taken from Multimon Brokers:

Note:

1. If you are involved in an accident while only having a learners licence an additional excess will apply: R2 500 for motorcycles up to the value of R40 000 and R5 000 for motorcycle valued above R40 000.
2. Standard excess: (25 years old) 10% of claim minimum R 4000 – (Accident)
3. Theft: 15% of claim cost.
4. For any claim within the first 90 (ninety) days from inception, an additional excess of R3000 will apply.

Restrictions

Finally, having calculated the premiums to cover the obvious higher risk of insuring motorcyclists, the insurers then endeavour to decrease that risk as far as possible. Here are the restrictions stated in Hollard’s Policy document:

Cover does not extend to any use connected with the motor trade (except use in connection with normal maintenance, service or repair), driving instruction or towing for reward; the carriage of goods for trade purposes, hiring, carriage of fare-paying passengers, racing, speed or other contests or rallies, use on any race track whether at an organised event or not.

At least this was given upfront. A Harnack client, from the same internet forum, who was not sure whether or not he was covered on the track, sent them three emails enquiring about their track policy with no response!

Conclusion

Hell’s Angel or not, there is no doubt that insurers shy away from the high risk inherent in motorcycle insurance. While the higher premiums charged by those companies who are willing to accept the risk are understandable and, to a degree, acceptable, it seems unethical, to say the least, for them then to turn around and limit the risks considerably through added security measures and restrictions.