BRITAIN'S biggest motor insurer is refusing cover for high-performance

hatchback cars unless owners fit costly security devices.

Norwich Union will turn away new customers seeking cover for 45

different ''hot hatch'' models unless they pay an average #360 to fit a

Vecta engine immobiliser.

An official of Europe's biggest motor manufacturer, Volkswagen Audi

VAG, warned that if the Vecta system failed while a car was being driven

it could cause a total loss of power. She added, however, that as far as

she was aware this had never happened.

Hot hatchbacks on the blacklist include the Ford Escort XR3i, VW Golf

GTI, Fiat Uno Turbo ie, and Peugeot 205 GTI 1.9.

An official of Norwich Union said: ''They're all performance

variations of family cars, and they're three times more likely to be

stolen than the standard model.''

The move follows the threat of higher premiums as Lloyd's, prompted by

the need to claw back losses from joyriders' write-offs, said it is

considering doubling the number of insurance groups for motorists.

Vecta cuts out the car's ignition, fuel, and electrical system unless

the key is in the ignition. VAG is advising its 320 dealers in Britain

not to fit the system.

The company official said that the Geneva-based International

Standards Organisation had warned that devices which interfered with the

vehicle system should not be fitted after manufacture.

The Lloyd's development may mean brokers refusing theft cover to

motorists living in high-risk areas.

Buyers of Ford's new Escort RS Cosworth are likely to find it

astronomically expensive to get insurance cover.

Lloyd's has 17 groups for motor vehicles but may increase these to 34

within months. Prospective owners of fast Fords, Peugeots, and

Volkswagens are being told they must be over 30, have a clean licence,

and be prepared to fit expensive alarm systems before they are even

considered.

Drivers in high-risk areas such as Glasgow could find theft cover will

not be available from some insurance companies.

The 140mph Escort RS Cosworth goes on sale this week and insurers say

it is ''virtually uninsurable'' for most drivers.

Christopher Petty-Mayor, motor manager for leading Lloyd's brokers

Stafford-Knight, said: ''Cars like these are a nightmare to insure. Only

a few insurers are willing to take the risk of insuring a car that will

probably be stolen and written off.''

One broker has quoted more than #13,000 to insure the Escort RS for a

25-year-old living in London. St Katherine's insurance company quoted

#3029.60 for a 36-year-old man living in Southend-on-Sea, Essex.

Later the Norwich Union spokesman said: ''We believe the Vecta is a

safe and effectual device and it has been looked at by the Home Office

and police.''

A 10% discount had been negotiated for customers in the cost of

fitting a Vecta, which would make the average price #360.

''It's a relatively modest amount compared with the value of the

vehicle and cost of insurance.''

Existing customers with hot hatches would not have to fit a Vecta but

would get a discount on their premium if they did, he added.

Car theft cost Norwich Union #65m in claims last year, up #15m on 1990

and #45m on 1988.

The Association of British Insurers said a number of companies would

not insure ''hot hatches'' unless the cars had an alarm, and there was a

growing trend for insurers to insist on security devices.

William Tinning writes: Although Norwich Union's figures show

Glasgow's car theft rate is three times the national average, the police

officer in charge of car crime prevention said recent initiatives were

working.

Assistant Chief Constable Bill Robertson said car thieves had been

allowed too much influence over the car people chose to buy. Recent

police moves had ''resulted in dramatic decreases in car crime''.

Co-operation between the public and the police ''could give Glasgow

the opportunity to get rid of the stigma which the insurance companies

clearly have decided it must have''.

A spokesman for General Accident, Scotland's biggest general insurer,

said the company had no further plans to introduce theft restrictions on

high-performance vehicles.

GA already insists on the Vecta system being fitted to cars worth more

than #30,000. It offers a 10% discount to policy holders who fit the

security system. The company was very happy with the system.

The spokesman said, however, that the company reserved the right to

underwrite individuals who had had more than one car stolen.