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Four Crucial Questions About How Motorcycle Insurance Works

I submitted a small claim on my motorcycle insurance policy? Is it guaranteed my rates will go up?

If  you have no previous claims you should be fine and your rate shouldn’t change. The most important factor as to whether your rates will be affected is whether or not you are at fault in an accident. But it’s not entirely that simple. This question is at the crux of how your policy will be affected once a claim is made, and it varies based on the situation surrounding the claim. It also happens to be different for every insurance company.

If you’re not at fault, your rate shouldn’t be affected. If you are at fault? That changes the entire picture. What happens next might also depend on the size of the claim. If you crack up your Roper Steam while out for a spin, the outcome will be lots different than if you ding your Yamaha RD350. One consideration to take into account when deciding whether or not to submit a claim is the amount of your deductible. If the cost of repairs is less than your deductible, don’t submit a claim. Filing a claim in that event will end up costing you more in increased premiums over the long haul, so don’t do it.

I lent my bike to a friend, and he cracked it up. Is he covered under my insurance?

Yes.

The rule is “insurance follows the bike.” In insurance business jargon, it’s what’s called a Permissive Use Policy. As long as the person is riding your bike with your permission, the bike – and your wallet –  are safe from undue stress and harm. It still makes sense for you to carefully consider whether or not you should lend your bike to your friend. If an accident does happen, your insurance company will likely cover the loss, but on the downside, they might find it’s time to review the business sense of renewing your policy in the future.

Not saying, just saying, you know…

What goes into the process of how my insurance company determines what my motorcycle is worth?

Insurance companies simply use books such as N.A.D.A. Guides or the Kelley Blue Book. From your point of view, the issue is that “guides” might not give an accurate picture of the actual current value of your bike. The factors the books don’t take into account might trip you up when you file a claim. It’s not usually a problem if you have your coverage through a specialty motorcycle insurance company, but it might be if you rolled your policy into your auto insurance, for example.

Claims adjusters usually consider the “book value” (as well as the actual market value) of your bike when determining the true market value of your motorcycle. They’ll review online and classified listings to determine the current selling price for bikes like yours, and a good adjuster will try to find four or five examples of bikes like yours near your area to provide them with a complete picture of what people in your area are paying for similar models.

What is a “liability” policy for your motorcycle and what does it cover?

The definition of liability insurance is, at least in an encyclopedia kind of way,  “A type of insurance which covers losses resulting from bodily injury to others or damage to the property of others for which you are legally liable and to which the coverage applies.”

Yeah.

That basically means liability insurance is there to help you pay for damage – either bodily or to property – that you do to others while riding your bike in the event of an accident. It does not, and this is important as liability coverage is generally all you’re required to buy in most states, cover your bike or your injuries, and those should be of interest to you.

Bottom line? Carry enough insurance for your motorcycle.

It’s doesn’t cost much more to get comprehensive coverage, and if you ever need it, you’ll be damn glad you have it and you didn’t try to squeeze a dime so hard it squeals.


Insuring your collectible or vintage motorcycle

As for insurance? You should be able to get Agreed Value coverage on a 1959 BSA valued at $15,000 for somewhere around $25 a month, and that gives you the whole shooting match of coverage. You can spend a lot less, but if you plan to ride the bikes in your collection, the above pricing is a reasonable approximation of what you can expect to pay.