Classification of motorbikes for determining CTP greenslip prices in NSW is changing from 1 July 2010. The new classifications will result in significant greenslip price changes for many owners, some up and some down.

Engine capacity

For greenslip purposes, motorbikes are classified on the basis of engine capacity. The classifications are designated by the Motor Accident Authority of NSW for use by greenslip insurers. Greenslip insurers apply those classifications, along with consideration of other factors such as location, claims history, driving record and rider age, to determine greenslip prices.

Until 30 June 2010 three classifications apply:

i) Under 100cc

ii) 101cc to 300cc

iii) Over 300cc

From 1 July 2010, five new classifications will apply:

i) Under 225cc

ii) 226cc to 725cc

iii) 726cc to 1,125cc

iv) 1,126cc to 1,325cc

v) Over 1,325cc

How they work

The change in classifications is designed to allow more levels of price differentiation for risk based on engine capacity and claims experience. Clearly, one classification for all motorbikes above 300cc is too wide.

The new classifications do not include consideration of other risk characteristics such as the type of motorbike or pillion capacity.

The new classifications result in a major realignment of prices. Some motorbike owners will benefit from sizeable decreases in greenslip prices, whilst others will be required to pay significantly more.

We have surveyed prices as at 30 June 2010 and 1 July 2010 for a range of motorbikes in the Sydney Metropolitan and Country areas. The results, showing the average change in price between those two dates are set out in the table below.

Average Change in Price Average Change in Price Capacity Sydney Metropolitan Country NSW 125cc -9.9% -3.9% 250cc 88.9% 107.3% 400cc -27.3% -29.6% 650cc -27.3% -29.6% 800cc 5.2% 1.9% 1,100cc 4.4% 1.2% 1,200cc 34.9% 24.6% 1,500cc 19.8% 13.0% 2,000cc 19.8% 13.0%

Hardest hit will be motorbikes at the bottom of the 226cc to 725cc classification, such as 250cc motorbikes. 250cc motorbikes were previously classified with 101cc to 300cc motorbikes. For a 250cc motorbike the survey shows an average increase in price of 88.9% in the Sydney Metropolitan area and 107.3% in Country areas.

The survey shows that prices have increased in the three classifications for motorbikes above 726cc. The average increase in price for an 800cc motorbike is 5.2% in the Sydney Metropolitan area and 1.9% in Country areas. The average increase in price for a 2,000cc motorbike is 19.8% in the Sydney Metropolitan area and 13.0% in Country areas.

Motorbikes in the 1,126cc to 1,325cc classification have shown a higher average increase in price than other large capacity motorbikes. For a 1,200cc motorbike the survey shows an average increase in price of 34.9% in the Sydney Metropolitan area and 24.6% in Country areas.

Biggest winners

The biggest winners are motorbikes in the upper range of the 226cc to 725cc classification, such as 400cc and 650cc motorbikes. Those motorbikes were previously classified with all motorbikes over 300cc. For both 400cc and 650cc motorbikes the survey shows an average decrease in price of 27.3% in the Sydney Metropolitan area and 29.6% in Country areas.

Some small capacity motorbikes under 225cc will also benefit. For a 125cc motorbike (such as a scooter) the survey shows an average decrease in price of 9.9% in the Sydney Metropolitan area and 3.9% in Country areas.

Interestingly, the survey also shows that for an older rider with good claims and driving records, the benefit of shopping around to compare prices will in some cases save several hundred dollars, whereas for a young rider with bad claims and driving records, the benefit of shopping around will generally be less than $20.00.

The trends shown in the table are based on a sample of greenslip prices as at 30 June 2010 and 1 July 2010. Greenslip prices change over time and in every case need to be checked on the basis of specific motorbike and owner details.

Comment at our Blog. Tell us how the changes will affect you. What is your opinion on the new classifications?