The insurance game is difficult...........
The theory that a 2 or 3 year old bike deserves a lower premium is not totally true.
Lets work it by example
You buy the new Africa Twin for R190 000 and insure it comprehensively.
The exposure for the insurer in the event of a total loss is R190 000 plus potential
liabilities following an accident.
That attracts a certain rate (Rand and cent)
The insurance company offer their rates according the risk that they foresee.
Lets say it is involve in an accident and the damage is R50 000.....
Two years down the line that same Africa Twin have a retail book value of
eg. R 130 000 (as any bike/car would loose value over time.)
Let say in theory it is involved in exactly the same accident as when it was new...
To repair the bike two years ago cost R50 000, but since then the cost of parts went up
by 20 to 30% and maybe labour rates increased by 10%.
This could mean that what cost R50 000 two years ago, could now cost maybe R60 000 - R65 000.
The point that I'm trying to make is that although a bike/car maybe a year or two or three old, it does
not necessarily cost less to repair than a brand new one.
Looking at this example above, it could attract a higher repair bill two years later than what a brand
new bike would've atractted then.
Does it really deserve a lower premium?
The only risk that changed for the insurer is the fact that if it is a write-off, their exposure dropped
from R190 000 to R130 000.
Write-offs do happen but not as much as repairable damage claims............write-offs is not the
biggest problem for insurance companies. Huge repair bills are.
The fact that most dualsport bikes have crashbars, bashplate and pannier-racks on, help to absorb impact
when a rider puts the bike down. It is much cheaper to replace these add-ons, than the bike itself.
Topic: I don't understand (Read 16995 times)
