Motorcycle crash study shatters myths and highlights increased risks

ConsumerInfo on Auto Insurance

Motorcycle crash study shatters myths and highlights increased risks

October 8 , 2004 – Manitoba motorists continue to subsidize motorcycle insurance premiums despite a decade of steady increases in motorcycle rates, a study released by Manitoba Public Insurance confirmed yesterday.

The analysis refutes all arguments made by motorcycle groups that what they pay is unfair. It concludes that if motorcyclists were to pay their fair share of claims costs, insurance premiums would increase by 37 per cent.

The study also demonstrates that the loss-transfer system proposed by motorcycle groups would still require a 30 per cent increase in rates because of the high incidence of single vehicle crashes and severe injuries. The loss-transfer rating scheme has been rejected for three years by the Public Utilities Board, which regulates auto insurance rates.

The study was prepared at the request of the PUB as part of the 2005/06 rate application. Manitoba Public Insurance proposes limiting the increase in overall motorcycle revenues at 15 per cent for 2005/06.

�There are more motorcycles on the road, and they are getting more powerful and more expensive � which is pushing up their claims costs dramatically,� said John Douglas, Vice President of Public Affairs for the public auto insurer. �Even though we�ve seen large increases in motorcycle rates for several years, the cost of motorcycle claims continues to far exceed the premiums collected.�

Among other findings, it reports that motorcycle claims tend to involve more severe injuries with higher costs. The numbers suggest new styles of bikes may compound the risk, and that more motorcyclists � particularly younger riders � may be taking more chances on the road.

The study shows:

  • The cost of the average motorcycle claim ($14,000) is nearly six times higher than the cost of the average passenger vehicle claim ($2,500).

  • Motorcycles are more than twice as likely to be in single-vehicle crashes than passenger vehicles (a three-year average of 50.2 per cent compared with 20 per cent).

  • The percentage of motorbikes with 1250-cubic centimetre or larger engines nearly doubled since 1996, from 15 per cent to 27.3 per cent in 2003.

  • Sport bikes are the riskiest category of motorcycle, with a claims frequency four times higher than other bike styles. Sport bikes make up 16 per cent of the motorcycle class yet account for 47 per cent of the claims. Sport bikes are also the most likely style of motorcycle to be in crashes under bad weather conditions, such as rain.

  • Since 1999, 53.4 per cent of all motorcycle accidents involved injuries, while injuries resulted from only 12.3 per cent of passenger vehicle accidents.

�The driver of a passenger vehicle is protected by a ton of steel,� Douglas said. �When someone purchases a motorcycle, they forego that protection, and their risk of injury is that much higher.�

The growing popularity of motorcycles suggests the rising cost of claims won�t slow down any time soon, Douglas added. The number of motorcycles in the province is growing four times faster on average than the number of passenger vehicles (5.3 per cent a year compared with 1.3 per cent, since 1999).

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