Younger motorcyclists who wish to ride powerful bikes will no longer receive cover from Norwich Union, the company which insures 95 per cent of motorcyclists. And Norwich Union has warned that all motorcyclists face substantially increased insurance premiums as a result of EU legislation covering pillion passengers.
The cyclists face increases of up to 60 per cent from December 31st, 1998, because Norwich Union is now obliged to provide pillion passenger cover. The effects will be felt increasingly in the new year as motorcyclists renew their cover. "Policies renewed in February 1998 will be charged for 11 months cover at the existing rates and one month's cover under the proposed new rates," Norwich Union stated. A spokeswoman for the company said yesterday that compulsory pillion passenger liability would necessitate "considerable additional exposure" which would be reflected in the rates charged. "As the year progresses the increases will be more obvious," she said.
The company also warned that "only in special circumstances" would it insure new customers aged under 21 with motorcycles higher than 200cc, and under 25s with motorcycles of over 350cc. "This action should be construed as positive in terms of promoting road safety amongst younger-age riders," the company stated. The company cited statistics from the National Roads Authority which showed that between 1992-1996 there were 40 deaths involving pillion passengers and almost 750 injuries.
The increased premiums are a result of EU legislation which came into effect in most EU countries on December 31st, 1992. Ireland received exemption because of the difficulties envisaged in implementing the directive. "This additional cover will result in an increase in premiums for motorcyclists which will vary between 5 per cent to 60 per cent. Younger drivers, particularly those with higher cc bikes, will attract the highest increase and older drivers with smaller bikes, a lower increase," Norwich Union stated. The company pointed out that UK statistics show that pillion passenger accident claims are more severe than non-pillion claims "Road accident statistics indicate that 12 per cent of persons injured on motorcycles are pillion passengers," it stated. The company also pointed out that, unlike in the UK, there is no compulsory motorcycle training. "Anyone over the age of 16 can buy a licence and obtain insurance - even if they have no previous experience or even knowledge of the rules of the road."
Norwich Union quoted a Coopers & Lybrand report from 1993 which states that "the average cost of settling claims for personal injuries is up to four time higher in the Republic of Ireland than the UK". It is understood that motorcycle insurance has been a substantial loss-maker for Norwich Union.
