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Why Ask so many Questions?
It's Motorcycle Insurance
.You
may be forgiven for asking
what is underwriting and why
does it matter to me, after
all, most of us have no idea
what happens to our
application when it goes to
the motorcycle
insurer
for assessment.
Insurance underwriters
decide whether your
application for motorcycle
insurance should be accepted and on
what terms. They assess a
risk according to the
likelihood of a claim being
made by weighing up a number
of factors and asking for
detailed information.
Motorcycle Insurers protect
the rider from financial
loss by taking on millions
of pounds in risk each year.
Underwriters are needed to
identify and calculate the
risk of loss from
policyholders, establish
appropriate motorcycle
insurance premium rates, and write policies
that cover the risk.
The primary function of
motorcycle insurance is to
act as a risk transfer
mechanism between the
policyholder and the
insurer. The principle of
insurance is that the losses
of the few are subsidised by
the contributions of the
many.
The aim of a motorcycle
insurance underwriter is to
minimize losses for their
company and help to make a
profit.
So what are the factors that
decide your motorcycle
insurance premium and why.
The motorcycle itself and
the several factors that are
linked to it, a mature rider
deciding on whether to buy a
small moped or a larger
sports machine will
undoubtedly pay a higher
motorcycle insurance premium
for the vehicle that has a
higher performance.
The value of a motorcycle
will affect the premium but
only to a certain extent.
Generally insurers will have
value brackets, so a
motorcycle worth between one
hundred pounds or three
thousand pounds will not see
a difference in the premium
charged, however, once the
value brackets increase so
will the motorcycle
insurance premium.
Security on a motorcycle
whether it is fitted as
standard by the manufacturer
or a device that the rider
has purchased himself will
have an affect on the
insurance premium, generally
however, only if it is an
electronic device such as an
alarm or immobilizer.
Chains, disc locks and
ground anchors are all
preventative measures but do
not usually merit a discount
on the premium.
Where the motorbike is kept
when not in use at the home
address is an important
factor for underwriters. In
areas where the risk of
theft is high due to an
inner city postcode or a
high value or prized
motorcycle, being able to
garage the machine will have
a significant affect on any
motorcycle insurance
premium. Keeping your
vehicle on a driveway or
private property would be
seen more beneficial by an
underwriter than perhaps
keeping it on a public
highway.
The age and experience of
the rider has a huge impact
on the motorcycle insurance
premium. An underwriter will
deem a younger rider a
higher risk, as he would a
rider who has only just
obtained his full license. A
rider who has a tarnished
driving record whether it be
motoring endorsements on a
driving license or
involvement in road traffic
accidents will influence an
underwriter 's decision on
the motorcycle insurance
premium he will quote.
On the surface, underwriting
seems quite a simple
process. Insurers ask you
the questions that are
designed to capture the
information they need to
build a clearer picture of
you, and the factors which
might increase the
likelihood of you making a
claim. Upon completion of a
quotation and gathering all
the necessary information,
underwriters may
* Offer cover on standard
terms
* Impose additional
conditions, such as
insisting on a certain type
of security is fitted to the
motorcycle.
* Exclude part of the risk,
such as theft cover if the
policyholder has already
experienced more than one
theft claim.
An underwriter may lose
business to competitors if
he appraises risks too
conservatively, or he may
have to pay excessive claims
if the underwriting actions
are too liberal.
Either way, you the
motorcyclist pays your
motorcycle insurance premium
in good faith on the
understanding your insurer
will indemnify you in the
event of a claim.
About the Author
Shaun Parker looks into
the processes behind
motorcycle insurance and
exactly what factors
determine how your
motorcycle insurance
premium is calculated.
Visit
http://www.insureyourbike.com
to find out more.
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