Car Insurance

Has acquired a 50% ownership stake in Blue Sky Motorcycle Rentals Inc., a privately-held nationwide motorcycle rental chain headquartered in Denver, Colorado. With nine other licensed locations in Arizona, California, Florida, Nevada and Utah, the Blue Sky chain is a growing network with hundreds of fully insured bikes in operation. MBA and Blue Sky plan to significantly expand Blue Sky’s location count and bikes in operation in 2005. Blue Sky has become a founding member of the National Motorcycle Dealers Association (NMDA), a subsidiary of MBA Holdings.

Blue Sky’s offerings of Harley Davidson, Big Dog and Honda bikes deliver the motorcycles in highest demand by rental customers. With other inventory of Kawasaki and Yamaha motorcycles, ATV’s, sports bikes, scooters and exotic automobiles available in various locations, Blue Sky satisfies diverse client needs and is poised to capture a greater share of the motorcycle and vehicle rental market.

Blue Sky derives monthly income from its licensees for every bike and vehicle under contract and insured for rental operations. Blue Sky currently owns its flagship Denver store and is a profitable company. With reasonable growth goals of doubling Blue Sky’s location count in 2005 and then further leveraging this network to attain a strategic goal of 1000 bikes under contract, a 50% share of Blue Sky operations would generate a significant contribution to MBA’s goals of top line growth and net profitability.

Blue Sky gives MBA a full partnership in a solid and vigorous business model for organically growing rental operations from the ground up. This establishes a fully complementary two-tier model for MBA to pursue its stated goal of becoming the leader in the motorcycle rental market sector. The NMDA’s existing partnership with Wildside Motorcycle Rentals is ideally suited for converting existing motorcycle dealerships to rental operations. Blue Sky has established a proven start-up model for entrepreneurs entering the motorcycle business.

Providing potential rental operators viable start-up options through either Blue Sky or the NMDA ensures the ability to not only capture a greater portion of the rental market, but to also grow operations where there is unmet demand. With no significant overlap in the applicability of the two business approaches deployed, this two-tiered model is an all-encompassing strategy to build a commanding presence in the motorcycle rental market. Blue Sky will be the optimal choice for new entrants to the motorcycle business while the NMDA provides the solution for dealerships ready to establish a rental division.

Blue Sky’s founder is Wayne (Lumpy) Ordakowski, the charismatic and driving force behind his company’s emergence as a leading motorcycle rental chain operator. With extensive management and ownership experience in the trucking and motorcycle industries, Lumpy Ordakowski brings a wealth of talent, industry knowledge and connections to Blue Sky and MBA. The 50% acquisition of Blue Sky by MBA was completed on a cash basis plus 1.14 million shares of MBAH common stock, of which 800,000 shares are to be issued in equal increments annually over eight year’s time.

Mr. Ordakowski will remain with Blue Sky as CEO to run and expand Blue Sky rental operations nationwide while MBA will provide the business and fiscal management infrastructure necessary to manage a growing chain of licensed rental operators. This arrangement is very beneficial to both parties as Mr. Ordakowski will be free to spend the majority of his time out in the field soliciting new business and growing the revenue base of Blue Sky. He is fully commissioned to represent the NMDA, market all NMDA services and sell all MBA insurance products and is expected to be a strong spokesperson for both Blue Sky and the NMDA.

“MBA Holdings has embarked on an industry changing paradigm with their comprehensive development of the NMDA. I am confident that through Blue Sky’s partnership with MBA we are assembling all the tools necessary to become the standard bearers for the packaging of premium services to the motorcycle industry and to assume the role of market leader in the motorcycle rental sector.”

The one with the most toys - boats, motorcycles and personal watercraft - is probably having a lot of fun with them. But that person is also probably coughing up quite a bit in insurance premiums each year to protect them.

The fast, high-performance Kawasaki Ninja that Don Rousell’s son drives probably wouldn’t cause much damage to a larger vehicle if it collided with it, but the chance of bodily injury to Rousell’s son is greater than that of someone driving a car or a larger, slower motorcycle. Rousell, New Orleans area manager for ABC Insurance Agencies, says his son’s policy is much more expensive than one for an older driver of a slower, heavier motorcycle.

A number of factors determine the motorcycle premiums, including the driver’s gender, age, experience, whether the driver holds safety certificates, where the driver lives and whether the bike will be kept in a garage, says Rousell.

Louisiana law requires that an owner buy at least liability insurance on motorcycles. State law does not require insurance on all- terrain vehicles like four-wheelers, personal water craft like Jet Skis, small fishing boats and off-road motorbikes. But insurance agents say insurance on such items is very reasonable, so people with the means to own such items often purchase insurance.

When mandatory auto insurance went into effect a few years ago, many motorcycle riders bought the minimum liability insurance required, but those who own flashy or valuable toys like the Ninja choose to go with a more comprehensive coverage, says agents.

Despite the physical dangers associated with motorcycle riding, exacerbated recently by Louisiana’s helmet optional law, Rousell says motorcycle insurance is usually more reasonable than car or truck insurance. That’s because the cost to repair or replace a motorcycle - even a high-performance Japanese bike or top-of-the-line Harley- Davidson - is less than what it would take to repair or replace, say, a late-model Lexus sedan.

Still, Kevin J. Daley, an agent with Beneficial Insurance Mid City Inc., says he’s seen yearly premiums in the $3,000 range for a young driver with a comprehensive policy on a high-performance bike.

Through companies like Progressive Insurance Co., Daley also writes policies for small boats. He says most boat owners purchase policies with low limits of liability to cover replacement of the boat and the cost of any physical injuries. Once someone plunks down anywhere from $2,000 to $15,000 for a boat, chances are he’s going to want it protected, says Daley. One customer, he says, has a bass boat with an engine that’s worth in excess of $7,000. It may not be like an Al Copeland boat, like $30,000 to $40,000, but for a young kid that’s a lot of money. They want to make sure it’s protected.

He stresses there’s a wide range of variables that determine yearly premiums, but for an 18-foot, fiberglass fishing boat valued at $10,000 with collision, liability, and an uninsured boaters coverage, the yearly premium would be $1,066. And that’s on a relatively expensive boat, he says. Of course companies are leery if (the boat) has been modified and is extremely high performance. They’ll want to limit their exposure on boats like that.

But though the person will pay more, they will probably be able to get a policy. One factor that weighs into the decision is automobile driving records, which insurers feel is an indication of risk.

We think there’s a correlation between a bad driving record and a potentially bad risk on the water, says Howard Reiff, a spokesman for New York-based Ski-Safe, a niche company that specializes in recreational marine insurance. Ski-Safe, which writes policies in Louisiana, insures personal water craft, ski boats, yachts and antique boats.

Reiff says the riskiest proposition when it comes to water vehicles are personal water craft, and that’s why the company is particularly selective when issuing these policies. The problem is that many people let inexperienced drivers - often children - operate the vehicles. When kids are using these personal watercrafts jumping wakes and waves, unfortunately there are a lot of injuries, Reiff says.

Besides the injury risk, personal water craft also are easily stolen, Reiff says. Besides being particular about who it writes policies for, Ski-Safe advises policyholders about proper storage of the watercraft, like keeping it garaged as opposed to in front of their homes.

When writing a policy, the company also takes into account the number of months people will be using the watercraft; for example, premiums will be less for those who uses the vehicles only part of the year. Ski-Safe also looks at where the vehicles will be used, with open seas warranting higher premiums than calmer, inland lakes.

Most people, says Reiff, buy insurance that provides $10,000 to $25,000 in liability coverage on their personal watercraft. Such yearly premiums would range from $174 to $250 per watercraft, he says. Ski-safe does not offer multi-unit discounts.

In response to demand from its primarily upscale clientele, Novato, Calif.-based Fireman’s Fund Insurance Co. added its Aquamarine division last spring. The company expects the products to be available in Louisiana this summer. The products offer coverage for all boats and personal water craft, with the exception of yachts with paid crews and racing boats.

The boat enthusiast of the Aristotle Onassis variety might want to turn to Warren, N.J.-based Chubb Group of Insurance Cos. to insure a yacht. One of the company’s specialties is writing policies for so- called megayachts, says Chubb spokeswoman Mary Ann Avnet. These boats are generally defined as those valued in excess of $1 million and include a paid captain and crew.

Because motorcycles make up only a small percentage of motor claims, the insurance industry hasn’t always fully understood the significant differences in this market, argues Dickson Tysoe of specialist claims solutions provider Bankstone. Motorcycle claims management needs a distinct line of approach and a different set of skills from those for four-wheeled motor claims

Cars and bikes are very different machines. For reasons that will be perfectly obvious to anyone who has ever ridden a motorcycle, two-wheeled motor transport is an utterly different proposition in practice to the four-wheeled variety.

In reality handling motorcycle claims requires a completely different approach and a different set of skills from four-wheeled motor claims. Motorcycle claims arise in fundamentally different ways to standard motor claims. Dealing effectively with bike claims requires a proper understanding of how bikes behave on the road and how accidents arise. Motorcycles are also subject to radically different damage and theft claims profiles compared with other road vehicles.

Four out of five motorcycles in the UK are second vehicles. Rather than being the owner’s principal means of transport they are a pastime, often a passion. While many car owners are unconcerned about what goes on under the bonnet, bikers typically have a much deeper level of knowledge and understanding of their machines. But if bikers know a lot about their machines the same, sadly, is not always true of those assigned to repair them following an insurance claim.

Motorcycle repair is a highly specialised business, requiring expert knowledge, specialist skills and equipment. Getting motorcycle repairs right is far more critical than other motor repairs. If there is a problem with a car repair, the owner can usually simply drive back to the repairers and point out the fault - or at worst they may need to pull over and wait for recovery. A faulty bike repair can easily result in serious injury or death.

Most staff in motor claims front-end environments would not know a lever from a peg, a swinging arm from a hero blob, let alone the typical damage patterns if a Honda Fireblade lands on its left side rather than its right. This lack of specialist understanding represents a missed opportunity to gather data, to handle claims effectively, and build rapport with the client. If in-house staff lack the necessary specialisation, it will often make sense to outsource to a white-labelled third party service provider that does.

Motor insurers often have panels of several hundred repairers and body shops around the UK. Some of these will have - or at least profess to have - specific experience in repairing bikes. In reality, there are probably no more than a dozen independent repairers in the country with an outright specialisation in motorcycles. It is only firms like these who have the necessary expertise and who will have invested in the specialist machinery and equipment (e.g. for straightening or jigging frames, realigning the headstock, plastic welding, paint matching, or X-raying critical parts) to offer a genuinely bike-specific service.

The logistics of routing all motorcycle repairs through such specialists require some management, but there are very strong arguments for doing so. The first instinct of non-specialist repairers (or repairers linked to bike dealerships) is often to replace any damaged part. A specialist however will quickly recognise what can be repaired more cost-effectively. Often this can cut repair costs by as much as 25% and dramatically compress timescales.

Through an expertly managed specialist motorcycle claims infrastructure, it is possible to arrange expanded recovery radiuses five to six times over the industry norm. Dedicated motorcycle repairers also have the specialist recovery and delivery equipment to ensure safe collection and delivery - avoiding the all-too-common scenario where a bike that was repairable at the scene of an accident is a write-off by the time it arrives at a motor body shop after a roller coaster ride in the back of a truck.

Equally the engineers who inspect damage on the insurer’s behalf need specialist knowledge of bikes if they are to do their jobs properly. Understandably motor insurers do not tend to have the volume to establish a nationwide network of dedicated bike engineers - but working with a third party specialist can achieve the same benefits.

The average motor engineer is unlikely to have the knowledge to challenge any bike repair estimate the body shop presents them with, whereas a competent and educated motorcycle engineer can protect the account considerably. In terms of fraud prevention and non-disclosure, they will also be able to identify nonstandard parts such as racing suspension, wheels and bodywork that other engineers would miss. This gives the carrier the option of re-rating or repudiating, either of which puts money back in the pot.

It is quite possible today to operate an effective remote engineering function by working in partnership with specialist outsourced providers. Half a dozen digital images supplied by the repairer including plates, clock and main areas of damage from a m variety of angles can enable expert bike engineers to carry out desktop engineering cutting costs by 50% or more and cutting timescales by up to 48 hours.

Replacement is another key component in the motorcycle claims process. Working with a partner who can source any type of bike at a cost well below retail prices allows the insurance provider to offer a replacement that will be acceptable to the policyholder (assuming their expectations have been expertly managed further up the chain) thereby retaining a satisfied customer for renewal.

Where a stolen or written-off bike elicits only a disappointingly small settlement cheque, the odds are it won’t go to fund another bike - and yet another customer will be lost forever (one more set of leathers left to languish in the loft). Statistics suggest that the lost customer would not have had another claim for an average 4-5 years - even before taking account of their greater security and safety consciousness following an incident. Consequently the opportunity to recover some of the claims cost in premiums is missed to both the insurer and broker.

At every stage in the process specialisation is the key to operating profitably in the motorcycle insurance market. If considerations of scale prevent brokers or insurers establishing their own specialist infrastructures, working with outsourced providers with the appropriate expertise can make a big difference.

Sterling Corp. is the United States District Court appointed Receiver for Indian Motorcycle Manufacturing Inc. and, as Receiver, the owner of Indian Motorcycle Company Inc., Indian Motorcycle Manufacturing Company Inc., Indian Motorcycle Apparel and Accessories Inc., and a controlling interest in Indian Motor Company Inc.

It is the intent of this Receivership to do its best to insure that all information disseminated about the Indian trademark as it relates to production motorcycles is accurate and truthful.

It has recently been brought to the Receiver’s attention that information released about the Receivership in November contained information that could be misconstrued. While the receiver believes the previous press release was accurate and fair, it is the purpose of this release to clear up any misunderstanding, and to make certain that the Receiver’s position as it relates to this venerable American trademark is clear.

According to the U.S. Patent and Trademark Office in Washington D.C., there are only five companies with claims for or against the Indian Trademark as it relates to production motorcycles. This Receivership now owns, or controls, four of the five. The fifth company is American Indian Motorcycle Company.

A contract to purchase this company is now in the Receivership court. The Receiver desires to complete this purchase, of which more than $700,000 has already been paid, thereby uniting all companies with all claims. The receiver’s plan to unite all of the companies with all of the claims has been cited with approval by the District Court in Denver.

Three of the companies owned by the receiver have been in bankruptcy in Worcester, Mass. The Receiver, as owner of those companies, has been trying to settle the estate since October by paying all legitimate claims of all creditors in full.

Should anyone other than the receiver purchase the assets, because the District Court in Denver has already allowed the receiver to file a declaratory relief action, the trademark could remain locked in litigation, where it has been for years.

First Entertainment Inc. has claimed to have been granted “exclusive, world wide licensing rights” to the Indian trademark. It has made this claim in press releases, television and magazine interviews, and when discussing their company with potential investors. During most of 1995, the prior owner of some of the companies, Michael Mandleman, turned over total financial control of one of the companies to MBL and its affiliates.

This group had promised to raise over $10 million if granted this control. Payment for such performance was to include certain limited, licensing rights should they gain control of the trademark. It is on these contracts that FEI bases its claims to the trademark. However:

– There is no such thing an exclusive worldwide license of the Indian trademark.

– The funding never occurred.

– Control of the trademark was never obtained.

– The agreements state on their face that they require court approval, approval that was never granted.

– First Entertainment never signed the purported licensing agreements until 6 days after the prior owner had defaulted and lost the authority to enter into such agreements.

The Receiver’s singular purpose is to consolidated the trademark, terminate the Receivership, and leave a healthy company moving forward towards developing a world class, production Indian Motorcycle. All efforts undertaken by the Receiver are to serve those ends. The Receiver hopes this clears any misconceptions that may have been caused by the November press release.