The New Paper - 20 Sep 2003

His car workshop's quote: $10,000
His car insurer's quote: $1,400

9-year-old Hyundai Sonata was damaged in more than 20 places

By Angeline Song

HIS 9-year-old Hyundai Sonata was damaged in more than 20 places in a collision with a taxi on Aug 29.

The car's bonnet, headlamps, front support panel, front and rear bumpers, washer motor, front and rear fenders and left front shock absorber were all bashed, dented or broken (see picture).

An Idac (Independent Assessment Centres) report listed 28 damaged parts, and recommended that most of them be replaced.

The car owner, Mr Ong Tiong Yeow, took it to the motor workshop of his choice, where they estimated the repairs to cost around $10,000.

But his insurer, NTUC Income, came back with a counter quote that shocked Mr Ong: $1,400 before excess.

He would not let NTUC's workshop handle the repairs. He said: 'I don't think it's possible for any workshop to do these repairs for such a low amount.'

But why was he worried about that as long as the repairs were guaranteed for six months?

'If the car is not repaired properly, a problem can occur nine months or one year later,' he said.

No supplementary was allowed either, which means that the motor workshop would not be able to claim anything extra from the insurer, even if further damage was uncovered.

Mr Ong's policy also did not allow for any reversion. If he tried to claim third party damages but was unsuccessful, he would not be able to go back to Income to claim damages.

'At first I wanted to claim third-party damages as I felt the taxi was to blame for the accident - but my workshop reminded me that my policy had a reversion clause,' said Mr Ong, 39, an events organiser and television producer, has been driving for 22 years.

'So I filed for own damages on Sep 1 - and was stunned by the figure which NTUC Income faxed back.

'The difference in price is just so great! The $1,400 cannot even cover the repair costs of my bumpers!

'The taxi sent my car spinning and the engine's totally caved in.'

Mr Ong said that after the accident, which occurred around 11.05pm, he had his car towed to the nearest Idac - at Ubi - as required by his insurance policy.

It was left overnight as the centre was shut for the day.

The next day, he went down to Idac to do the paperwork. Idac made an assessment of the damages, handed him a copy of the two-page report, and faxed the other to insurer NTUC Income.

Mr Ong then filed a police report about the accident, in which he claimed the taxi had run a red light and rammed into his car.

He called the motor workshop which he has used over the years: Cars Engineering on Ubi Road.

'I've had my policy with NTUC Income for nine years and pay over $1,000 a year for insurance,' said Mr Ong.

'This is the first time I am claiming, but they are making it so difficult.

'It has been more than two weeks, and my car is still not repaired.'

Mr Ong said that after receiving the fax from Income, he called its claims department several times over the next two days to ask a surveyor to come down to assess the car's damage.

'I spoke to an officer once, but he stuck by the quote and said there was nothing he could do; subsequently, my calls went unanswered,' Mr Ong said.

Later, an Income officer called to say he was following up on the case, said Mr Ong.

But it has not been resolved yet.

Mr Ong said that every few days, he calls Income in between work.

'And most times, my calls go unanswered or the staff say they will call me back but fail to do so.'

Meanwhile, Mr Ong frets that due to the delay, his car, which lost a lot of paint in the impact, is beginning to rust.

He is now considering claiming third party damages.

'The taxi driver's insurers sent their surveyor down, and even he said that $1,400 would definitely not cover the repair cost,' Mr Ong said.

A surveyor from the taxi driver's insurer, has agreed to a quote of about $6,000 for repairing Mr Ong's car, using reconditioned parts.

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NTUC should reveal 'exactly how it selects workshops'

DOES Mr Ong's case show a weakness in motor insurer NTUC Income's practice of using an insured person's preferred workshop only if it accepts Income's 'benchmarked price'?

Mr Stephen Loke (right), president of the Centre for Corporate and Social Responsibility (CCSR), discussed this in an interview with The New Paper.

Income's benchmark is the price set by its own successful workshop bidder.

Mr Freddy Neo, Income's claims department's senior manager, said this is often the lowest bidder.

Mr Loke, who had seen a copy of the Idac assessment, said: 'The discrepancy is so large. The damages to Mr Ong's car are clearly beyond $1,400.

'If the system is working well, this shouldn't have happened.'

CCSR was set up to promote good business practices and ethical conduct.

Mr Loke also took exception to Income's attitude, referring to another recent case highlighted by The New Paper.

A BMW owner had her policy terminated after she had insisted on having the repairs done at her distributor's workshop instead of Income's recommended workshop.

The 18-month-old BMW was still under warranty.

Mr Loke, who is also a lawyer and consumer-rights activist, said: 'What is the signal being sent to the people? Income is a cooperative-based insurer; it has to take care of its members by taking a balanced view.

'If it insists on sticking to its way of doing things, then (it must) be transparent and reveal exactly how it selects workshops to be on its approved list.'

Mr Loke also suggested that Income should draw up a blacklist and make it public, as it had claimed previously that rogue traders inflated claims or aggravated damage.

'Why has it not named these workshops to date? Drawing up a blacklist of dishonest traders and making it public would benefit all,' Mr Loke said.

'The list itself will be a deterrent, because no workshop will want to be on it.

'Consumers themselves will help weed out the bad businesses through word of mouth and by avoiding those workshops.'

NTUC Income is the major player in motor insurance here, with a reported 40 per cent of the market. It insures 280,000 vehicles.

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NTUC INCOME'S REPLY

THE two workshops were not quoting widely varying figures for the same service, according to Income.

Mr Freddy Neo, senior manager of NTUC Income's claims department, told The New Paper: 'As Mr Ong's vehicle is nine years old, we arranged for it to be repaired on a lump sum basis.'

This means the repairers are allowed to replace the damaged parts with used, reconditioned or new parts, or repair it to a roadworthy condition. Part-by-part repairs require only new, genuine parts.

Mr Neo said Income sent the work out for bidding only on Sept 3 because Mr Ong had originally wanted to file a third party claim. On Sept 5, Income awarded the job to one of its workshops with its 'benchmarked price' of $1,400.

This price was not accepted by Mr Ong's preferred workshop.

'(The $10,000 quote)... was for a part-by-part estimate and included some items that were not recommended by Idac to be replaced,' Mr Neo said.

'The total of parts not recommended to be replaced amounted to $1,800.'

Mr Neo added that Income had then offered $1,500 to Mr Ong's preferred workshop, but it rejected this too.

He said that he understood Mr Ong was looking into the possibility of making a third-party claim.

In an e-mail reply from overseas, NTUC Income's CEO Tan Kin Lian said that if the delay in repairs was caused by Income, it would provide compensation to Mr Ong. This is $50 to $80 a day, depending on the car's model.

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ITS REPLY TO MR LOKE

NTUC Income has acted against some rogue workshops, as a deterrent.

Income's Mr Neo said: 'We have reported some of these workshops who... attempted fraud on us to the Commercial Affairs Department...

'We are resisting their claims in the civil courts. Our policyholders are free to check with us on the reputation of a particular workshop.'

Mr Neo said that when a policyholder claims own damages, based on an Idac report, a work order is put up and four repairers on Income's approved list of workshops are invited to submit tenders. The workshops in the groups are rotated.

'We will award the repair job two working days after claimants have reported at Idac,' Mr Neo said.

The successful bidder's price becomes the benchmark price. Mr Neo estimates that in 80 per cent of its cases, Income awards the job to the lowest bidder.

The policy holder can opt for a workshop that is not on Income's list - if it accepts the benchmark, or a little over. How do workshops get on Income's approved list? They must have the expertise, manpower and equipment to do a 'comprehensive repair job'.

They must also be large enough to service a minimum number of vehicles at one time and be financially sound. All repairs must carry a six-month warranty.

Mr Neo added that its surveys show 95 per cent of policyholders are satisfied with repairs by Income's selected workshops.

He said Income, which has 74 approved workshops on its list, is helping smaller workshops to form clusters so that they will meet its minimum standards.

The New Paper - 03 Sep 2003

Car firms unhappy with new insurance rules

By Angeline Song

THEY have been accused of jacking up the cost of car repairs and driving the cost of car insurance premiums up.

Now two car distributors have gone on record on their unhappiness over NTUC Income's new rules for motor insurance claims.

Performance Motors (BMW's authorised distributor) and Regent Motors (Ford and Land Rover's authorised distributor) said they were called for a meeting at the NTUC Income Centre on May 27.

They claimed that they were then told the new rules of the game. And it was a take-it or leave-it situation.

And the new rules?

According to the two distributors, two of NTUC Income's senior claim officers told them that for new cars still under warranty, Income would take the estimate of the lowest bidder from a panel of four of its workshops - and use it as its price guideline when underwriting car repair costs.

Previously, NTUC Income would send its insurance surveyor to the authorised car distributor's workshop to inspect the damaged vehicle, said Mr Yong Onn Tat.

He is Performance Motors' workshop manager (spray painting and panel beating), who was at the meeting with NTUC Income with Mr Charlie Khoo, parts and service manager at Regent Motors.

The surveyor would negotiate with the authorised distributor - and often agree on a price on the spot, Mr Yong said.

But now, Income gets its own workshops to quote a repair price based only on the report and photos of the damage assessed by the Independent Damage Assessment Centre (Idac).

It is then compared with the estimate from the authorised car distributor.

Mr Yong also said that in an e-mail message sent by Income on Jul 17, Performance Motors had been urged to submit quotes based only on the Idac assessment.

Mr Michael Goode, Performance Motors' after-sales general manager, said: 'But we refused... We cannot give an accurate estimate just based on looking at someone else's report and photographs.

'We will stick to our method of assessing the damage ourselves by having the car physically present in our workshop and having our trained technicians do their assessment and checks.'

NTUC Income has reportedly cornered 40 per cent of the motor insurance market. It insures 280,000 vehicles.

Which is why the car distributors are concerned.

NTUC'S DECISION

Mr Khoo said they were told by the Income officers that it could decide which makes of cars to insure and which not to.

'I was very unhappy,' said Mr Khoo.

'But it is true that it is up to it to decide in the end - it is the big player in the insurance market.

'At the meeting, Income's officers said that they would cancel the policies of those who do not go along with their decision.'

The Regent Motors managers said they had heard of other meetings the insurer had had with other car distributors.

Mr Khoo, who has been with Regent Motors for 13 years, said: 'At the meeting, I asked the NTUC Income officers if they were sure that their workshops used genuine parts.

'In some previous cases involving quotes from their workshops, even if I calculated based on the cost price of our genuine car parts, I still could not match their low quote.

'I told them this and asked them where their workshops got their parts from, but they said they could not disclose that.

'We are the authorised agent, with the best access to the genuine parts, so how can their price be right if they are using the real thing?'

Regent Motors represents Ford, Land Rover and Peugeot.

An e-mail from Income said that its workshops are required to carry out repairs using original parts.

Income's e-mail notes on the May 27 meeting stated that if the authorised agent could not match its 'benchmark quote' plus an additional 15 per cent, then Income would arrange for the repairs to be done at its panel workshops.

It also said that if the authorised distributor then made the policy holder's existing warranty void, Income would indemnify the insured - but warned that 'we intend to recover any loss from you' if it had been voided 'without valid reason'.

But Mr Khoo said that even with 15 per cent added to the estimate, 'the price is still too low for us, we just cannot do it.

'We have rejected some cases because we simply cannot match their quotes.'

Both he and Mr Yong confirmed that since mid-July, NTUC Income had stopped sending insurance car surveyors to assess a damaged vehicle.

Mr Khoo said: 'Some of us (car distributors) are planning to get together to see what we can do about the situation.

'It is true that NTUC Income's car insurance premium is at least a few hundred dollars less than some other major insurers.

'But it would be good if it could also consider the points we raised.'

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Labour charges push up dealers' claims

THE cost of parts was almost the same. But labour costs levied by Performance Motors were much higher than the estimate by our workshop, said Mr Tan Kin Lian, chief executive officer of NTUC Income.

In an e-mail reply to The New Paper's article, 'Messy squabble over insurance after BMW damaged in crash' (Aug 27), he said: 'The BMW distributor (Performance Motors) quoted a sum of $11,900 to repair the vehicle, including $8,000 for the labour.

'Our quality workshop quoted $4,385, including $700 of labour charges.

'They (Income's workshop) are required to carry out the repair using original parts and for the damages identified by the damage assessment centre (Idac).

'The damages do not involve the engine or the use of special equipment.

'They are also required to provide six months warranty for the repair.'

Mr Tan said that 'the BMW distributor quoted 11 times of the labour charges compared to our workshop. The cost of parts is almost the same'.

Mr Tan also said that NTUC Income is usually prepared to offer 'up to 50 per cent more than our benchmark price to the authorised distributor'.

But it was unhappy when the authorised distributors charged even more. Mr Tan added that a 'major contributor' to the increase in motor insurance premiums is the high repair charges by authorised distributors.

He claimed they charge three times more than other workshops.

'We prefer to retain policyholders who agree to work with us to bring down the repair cost, and to enjoy the benefit of our lower premium,' he said.

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Price of quality repair

WE stand by our pricing.

That was Performance Motors' aftersales' general manager Michael Goode's response to NTUC Income's CEO Mr Tan Kin Lian's charge that his company overcharged for car repairs.

Mr Tan had said this in an e-mail to car insurance policy holder Mrs Kawaljeet Kaur-Williams and her husband Mr Philip Williams, after their BMW was damaged in an accident on Aug 6 (as reported in TNP, Aug 27).

Said Mr Goode: 'Every year, we invest $100,000 worth of tools and equipment, meant specially for repairing BMW cars, be it mechanical, electronic or bodywork.'

For instance, Performance Motor's three-level workshop has two sophisticated diagnostic equipment items specially designed for BMW cars.

It also has three Celette Benches - each costing $40,000 - to measure chassis alignment.

Even its water-based paints from Germany have to be mixed using a special technique in order to match the colour on the rest of the damaged vehicle.

SPECIAL TRAINING

Then, there is training.

Each year, one or two specialists from BMW headquarters in Germany train the staff for one or two weeks, Mr Goode said. Two local full-time trainers also conduct courses in car repair almost every week.

Mr Goode estimates that last year, the company spent more than $150,000 on training alone.

This year, he expects to spend 'about 20 to 30 per cent more' as two new models - the BMW Z4 (Roadster) and the new BMW 5 - will be launched soon.

Labour cost is measured by a fixed system of work units laid down by BMW headquarters in Germany.

In an e-mail to The New Paper, Mr Tan said that Income was willing to accept 'up to 50 per cent more than our benchmark price to the authorised distributor'.

However, Income's notes of its May 27 meeting said that NTUC Income was only prepared to accept 15 per cent more than the 'benchmark price.'

Why was Performance Motors able to drop its quote for repairs to Mrs Williams' car from its original $11,900 to $10,000?

'In this current economic climate, we are more flexible with our pricing,' said Mr Goode, adding that this is absorbed by the company, as their workshop technicians are full-time employees who are paid a monthly salary.

Mr Yong Onn Tat, Performance Motors' workshop manager (spray painting and panel beating) who had overseen the repairs of Mrs Williams' car, revealed that its original estimate for cost of repairs was $14,000.

'But we automatically reduced it to $11,900 because we factored in a surveyor's adjustment, knowing that Income would not be sending in a surveyor,' said Mr Yong.

The New Paper - ASK DR MONEY

Sep 02, 2003

Insurance firm: Scrap your car

BY LARRY HAVERKAMP
[email protected]

Q: I heard that if you insure your car, van or motorcycle for its market value, the insurance companies won't pay that much if you have a total loss. Isn't this unfair?

A: Yes, you are right. Here's how it works:

My friend, Desmond owns a car with a market value of $60,000.

If he scraps it, he'll get $55,000 - from the Preferential Additional Registration Fee (Parf) plus residual Certificate of Entitlement (COE).

He had an accident that caused $7,000 in damages to his car.

The insurance company paid Desmond $5,000 and told him to scrap his car for $55,000. That gave him $60,000 in total.

Desmond told me: 'I've been paying insurance premiums that are based on the value of my car which is $60,000. But the insurance company would never pay me that amount. The most they would pay is $5,000, which is what I got.'

From the insurance company's viewpoint, however, Desmond has nothing to complain about. His car was worth $60,000. He got $60,000. He should stop complaining!

A BRILLIANT IDEA?

That's when Desmond told me about his brilliant idea.

The insurance company would pay only $5,000, even if his car was completely wrecked. So why waste money to insure the car for $60,000? He could insure it for just $5,000 and save a fortune.

I asked insurance expert Freddy Neo about this scheme. Mr Neo is senior manager in the Claims Department at NTUC Income.

He told me: 'Yes, some insurers allow this.

'The only problem is that insurance companies have already figured out this trick. They will give only a small discount if you insure your car for $5,000 instead of $60,000.'

'The discount would only be about 5 per cent. Take a car with a market value of $60,000 and premiums of $1,000 per year.

'Then if you want to reduce your insurance coverage from $60,000 to $5,000, your premiums would fall by just $50, from $1,000 to $950 per year. It's not much.'

Mr Neo also told me about a second way insurers calculate how much to pay for repairs. Even when it is cheaper for them to scrap the car, many insurers will pay up to 10 per cent of the car's market value or $10,000 whichever is less.

That would give Desmond $6,000 for repairs. (10 per cent of $60,000.)

A third formula is one used by NTUC Income. It would pay Desmond up to $11,000 to repair his car. (10 per cent of $60,000 + $5,000.)

A BETTER DEAL

Like 80 per cent of Singapore drivers, Desmond owns 'comprehensive'insurance. It covers damages to his car, another car and anyone who is injured in an accident.

Desmond decided to save money and insure only the damage to another car plus personal injuries. This is called 'third party' insurance, and it does not cover damage to your own car.

How much additional risk is Desmond taking?

If his car is totally wrecked, he will lose only $5,000. This is the difference between the market and scrap value of his car: ($60,000 - $55,000 = $5,000).

For taking the added risk, his insurance premiums will fall by 50 per cent, from $1,000 to $500 per year.

NOT FOR EVERYONE

Third party insurance is not for everyone.

New cars often have a market value that is much higher than the scrap value, so you are probably better off staying with comprehensive insurance.

For older cars, the market value is closer to the scrap value.

Then, you may wish to cancel your comprehensive policy and go with cheaper third party insurance. (See report below.)

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COMPREHENSIVE VS THIRD PARTY INSURANCE

SWITCHING from comprehensive to third party insurance can net you large savings.

But you must also pay for repairs if your car is damaged and it's your fault.

These four easy steps tell you how to do it. (It applies to vans and motorcycles as well.)

1. Call your insurance company, and ask how much you pay for comprehensive insurance now and how much you would save if you switched to 'third party' insurance.

2. Determine the 'market value' (MV) of your car by looking it up in the Straits Times classified section. Find a car like yours then call to find out the price.

3. Determine its 'scrap value' (SV) either on LTA's web site: www.onemotoring.com.sg. or call them at: 1-800-225-5528.

4. MV - SV = MAX. This is the maximum you will lose if you totally wreck your car.

Compare it to your 'savings' in step 1.

APRIL 26, 2003 SAT

Motor insurers raising premiums due to higher costs

RECENT letters to The Straits Times Forum page have questioned increases in insurance premiums for motorcyclists and the effectiveness of Independent Damage Assessment Centres (Idac). We wish to clarify both points.

The motor insurance business in Singapore is subject to the rigours of a free and open market. This provides the best safeguard against any possible unfair charging of premiums. As a market with intense competition, the motor insurance business has incurred underwriting losses of more than $100 million a year for the last four years.

Premiums charged have been inadequate to meet the increased costs of providing motor insurance. Last year, motorists filed 14 per cent more accident reports than in 2000, although the number of vehicles was only 2 per cent higher.

Average claim costs have also increased by 12 per cent since 2000. Total claims as a proportion of premiums have worsened from 77 per cent in 1998 to 92 per cent last year, although management and distribution costs were each a reasonable 16 to 17 per cent of premiums last year.

Insurers clearly cannot bear these losses indefinitely. They need to make the necessary premium adjustments to remain viable and to be able to continue providing coverage.

The General Insurance Association of Singapore (GIA) has worked with its members to improve the way motor insurance works. The most significant initiative undertaken has been the creation of the Idac network, launched on Aug 1 last year.

This network was formed to address the specific problem of inflated accident damage claims. As one of many factors affecting claim costs, Idac alone cannot lower premiums. GIA has always been upfront and consistent about this.

But resolving the problem of inflated claims is important and will benefit consumers. We strongly encourage motorists to use Idac, whether claiming own damage or against a third party.

We are satisfied with Idac's performance so far, but we will continue to monitor and improve processes at the centres to make them even more convenient for motorists.

Motorists whose insurers are not participating in the scheme are welcome to use Idac but should contact their insurers first. Motorists who file accident reports with Idac need not file another report. For more information on the roles and scope of Idac, please visit our website at www.gia.org.sg

Insurers will continue to address costs to remain competitive and viable. But motorists must also do their part by driving safely and responsibly at all times. A lower accident rate would be the best way to lower insurance costs.

WU SIONG YEN
Executive Director
General Insurance Association of Singapore

The New Paper - 12 Mar 2003

Car insurers are no friends of mine

By Melvin Singh

THERE'S nothing quite like a difficult moment to define real friends from the fair-weathered version.

I was involved in an accident and my insurance company is not a friend.

Friends don't demand more money from you every year just because they're making less.

Here's how I learnt to see my insurance company as the bully in the devil's playground.

I was about to park my car at the carpark next to Jalan Besar Stadium on Mar 4 when the car in front reversed into my car.

Great. We exchanged particulars, he refused to pay and I thought, no worries, since I'm not in the wrong, there shouldn't be a problem. After all, I have a friend.

No, the nightmare was only beginning.

I called the inspection centre and was told I had to take my car to them for an inspection, after which, a workshop will be recommended to me.

Outside the inspection centre, tow trucks were waiting like vultures.

Instead of plying the expressways, they now circle the inspection centres for confused accident victims to go to them.

No way was I going to hand my car over to these vultures. I'd rather trust my friend, the insurance man.

First I called my insurance company and learnt to my horror that it doesn't matter who's in the wrong.

Yes, my car was stationary. Yes, I have a witness. It doesn't even matter if my car was parked and I was somewhere else at the time of the accident.

I will still be punished.

Here's how it goes. I make a third party claim against the other driver. That means I claim from his insurance company.

He makes a report too. It's then down to whose version is more right. My insurance company said it will then decide if it's worth fighting the other driver's claim - that it was my fault.

Even if I have a witness, it said, it will ask if it's worth the exchange of legal letters. In short, it may settle with the other party.

But I end up footing the bill. Do you see the friendship waning?

When I have to renew my insurance policy, my premium will shoot up.

All because somebody had claimed against me and won by virtue of my insurance company not contesting it. A friend indeed.

I COULDN'T QUIT EITHER

I threatened to quit and go to another insurance company. Its response: The new insurers will charge a higher premium too because they will be aware of the record. In short, I'm screwed.

What if I pay $100 to fix the bumper myself instead of a $200 premium increase?

No go. If the other party claims against me, and by virtue of me not making a report myself, I will be in even deeper excretement.

So here I am trapped by a system designed to be useful to motorists with little clue of what I'm going to do.

A system designed to be more friendly.

Source URL: http://www.income.com.sg/faq/motor.asp#Q11

Q: For motorcyles, is there any model that Income does not accept?

A: With effect from 15th February 2003 we are not accepting new proposals for the following motor cycle models:

• Yamaha RXZ
• Honda CB400
• Honda CB400 Super 4
• Honda CB400 V-TEC
• Honda CBR 400RR
• Honda RVF400
• Honda NV400
• Honda NV400 CT (Steed)
• Honda NV400CS (Shadow)

From Income on-line quotation:
Source URL: http://incnet.income.com.sg/Motor/uiMotorCycleQuotForm.aspx

Motor Cycle Quotation (Hotline No : 67885255 )

Declined Vehicles

With effect from 15th February 2003 we will not be accepting new proposals for the following vehicles:

a. following motor cycle models :

Yamaha RXZ, Honda RVF400, Honda CB 400 , CB400 Super 4, CB 400 V-tec, CBR400RR, Honda NV 400 , NV 400CT (Steed), NV 400CS (Shadow)

NTUC Income Motor Insurance Application Form

http://www.income.com.sg/forms/motor.pdf

31 January 2003

Motorbike sales grind to a halt

Dealers blame higher insurance costs for slump; no-downpayment rule doesn't cover two-wheelers

by Zubaidah Nazeer

CAR buyers are rushing to dealers to get their dream car now that they don't need to come up with an initial downpayment, but motorbike buyers have no such incentive.

The Monetary Authority of Singapore's recent lifting of this rule on downpayment, as well as the liberalisation of the amortisation period of loans, did not include motorbikes.

As if this is not bad enough, insurance premiums for motorbikes have soared to twice those for cars.

The result: Bike sales have plummetted. At least one dealer, with 20 years in the business, has closed shop and switched to another trade. The owner was uncontactable for comments.

Mr Wilson Yeo, 31 a manager of bike accessories shop Factory Works, said he knows of the plight of this company.

"It's the worst situation ever," he said.

His sister company, Unity Motor Trading, faces similar lacklustre sales.

"We used to sell around 50 brand new bikes monthly early last year, but sales started dipping and now it's lucky if you move at least one new bike a month."

Another dealer, Mr David See of Soon Hin, who used to sell 30 new and used bikes a month, now manages fewer than 20.

He said: "The COE drop to $1 last November should tell you that nobody wants to buy a motorcycle.

"People who usually get bikes tend to be low-income earners who are hit by retrenchment and so on.

"So, of course, many of them decide to cut out buying a bike altogether in these bad times."

It was a similar story with four other motorcycle dealers that Streats contacted.

But the overriding reason, they say, is steep insurance premiums.

Said Mr Ong Kim Hua, sole proprietor of Dirt Wheel Motor Training: "Insurance premiums have increased as much as three times and this means buying a bike is just not worth it."

"The insurance premiums started shooting up after Sept 11, at the time when many insurance companies started pulling out their motorcycle insurances," Mr Yeo said.

Dealers say that there are now only three insurance companies for motorcycles - NTUC Income Insurance, Mitsui Sumitomo Insurance Singapore and Axa Insurance Singapore.

Explaining why insurance prices skyrocketed after Sept 11, a spokesman for Mitsui Insurance said: "The investment income and stock market went down after that and so there was no cushion for insurance.

"So, we have to reply on strict criteria to make sure that we won't be hit by losses resulting from high claims by accident-prone riders," he said.

It dosen't help when motorbike riders are usually young, prefer powerful machines and have little riding experience.

For example, insurance companies can jack up insurance premiums for riders aged 21 years and below by as much as five times.

Which means they can end up forking out as much as $1,500 a year in insurance payments.

Young riders are also the ones that are likely to be reckless with the bikes, according to figures from the Traffic Police.

Their statistics show that six out of 10 motorcyclists who died on the road in 2001 were aged 30 and below, up from five in 10 in 2000.

In 2001 alone, a quarter of fatal accidents involved riders on probation. Latest figures are not available.

Said the Mitsui spokesman: "We need these high premiums to ensure that we can bear the payouts to these high-risk category riders when they do get into accidents."

He told Streats that the motor insurance industry itself has been "doing very badly for many years".