The Secrets of Motorcycle Insurance and How to Avoid the Pitfalls of Buying It
Oh yeah, time to buy motorcycle insurance for the latest machine in your growing stable of rides.
If you plan to buy a motorcycle and ride it on the road, or for that matter even store it in the garage, then you should have motorcycle insurance. Our Insiders Guide was written to provide you tips and information to make the process painless. For this article, we’ll touch on:
- Types of motorcycle insurance
- The best ways to research cheap motorcycle insurance
- Where and how to find cheap motorcycle insurance quotes
If you’re searching for inexpensive motorcycle insurance and expect to find the best deal possible, you need a thorough understanding of what type of indemnification you need and how insurance companies determine what type of risk you present.
So what kind of factors are considered by companies when they quote you a rate on your motorcycle insurance? Here’s the short list:
- Just like with auto insurance purchases, the older you are, the cheaper your rate is likely to be. If you’re new to operating motorcycles you’ll probably be in a higher rate category until you gain some riding experience.
- The type and displacement of your bike: Buying new? Your insurance cost will be more than it would with an older, basic motorcycle. The exception to this rule is collector machines, but that’s another topic entirely…
- Where do you live? If you live in a high crime or high accident area, your rates will be higher than those for someone living in an area with less crime and fewer accidents.
- How’s your driving record? Accidents count. Any accidents you had in your automobile will count against you so keep in mind that the cleaner your driving record the cheaper your motorcycle insurance will be.
There are quite a few different types of motorcycle insurance coverage available, and some types of indemnification are required by law. Insurance is all about probabilities and statistics, and while you may not think you need a certain type of indemnification to save money, the stats from your insurance provider might indicate otherwise.
Bodily Injury and Property Damage Liability Insurance
Bodily injury liability is required in most states and the legal minimum in many of them is as little as $10,000 per person per incident. Your indemnification pays for injury to others when the accident is your fault, and most insurance experts say you should purchase as much as three times that amount. Litigation and lawsuits are endemic to our society these days, and you need to be covered to avoid suffering unnecessarily should you be hit with one.
If you’re at fault – and legally liable – for an accident, your insurance will pay for a limited number of things:
- The cost to repair or replace any property damaged as a result
- Medical bills incurred other injured parties, and that sometimes includes indemnification for guest passengers
- Any lost wages of injured parties other than you
If the other driver is at fault, then the other driver’s property damage liability insurance pays for your damages. Property damage liability insurance is required by law, but the legal minimum amount for this indemnification in some states is only $5,000 per accident. That’s not much, so, if a driver with the $5,000 minimum totals out your $15,000 bike, his insurance company will only pay the minimum $5,000. You probably won’t unless you carry additional coverage.
Bodily Injury and Property Damage Liability Limits and What They Can Mean to You After an Accident:
If you select 15K/30K/10K limits, your liability indemnification will pay up to $15,000 per person and no more than $30,000 per accident for Bodily Injury and up to $10,000 per accident for property damage.
Underinsured or Uninsured Motorist Coverage
If you purchased under-insured property damage indemnification, you may be able to collect the other $10,000 to fix your bike. This insurance is used to fill any the gaps between the actual amount of damages and what the other driver’s insurance paid, but only if the other driver caused the accident. It only kicks in if you purchased limits high enough to cover all of the remaining damage, so make sure you buy enough coverage. Here’s how it works; if the legal minimum requirement in your state is $5,000 for property damage liability, and you drive a $15,000 bike, you should have at least $10,000 limits on you under-insured property to cover the full value of your machine.
Under-insured motorist indemnification picks up where the other driver’s insurance runs out. This type of insurance is very important. If you’re injured in a motorcycle accident, spend time in the hospital and are off work for six months, you’re covered. You need indemnification high enough to pay for your damages, and if the other driver has a minimum policy of $15,000, you get stuck with the rest. In this case, you need under-insured motorist indemnification to pick up the difference.
Uninsured motorist indemnification may well be the most important coverage a motorcyclist can buy. In the larger cities and certain states, uninsured drivers can make up 40% of the drivers on the road. What does that mean to you? It means the probability is very high that you may be hit and injured by a driver who has no insurance at all. The only way you can protect yourself is to purchase uninsured motorist indemnification. Uninsured motorist coverage pays for medical expenses, property damage, and pain and suffering, but in no-fault states like Michigan, those amounts are limited. Uninsured motorist indemnification pays these expense and your health insurance will not.
The bottom line? Talk to your agent. Companies have different exclusions listed on their policies, and passenger exclusion is common. Don’t let that happen and avoid that kind of problem by knowing what you need when you purchase.There are a whole list of other types of exclusions, so ask about them all and don’t find out you aren’t covered until it’s too late.
Guest or Passenger Liability Coverage
This type of indemnification provides protection for legal liability in the event that a guest passenger is injured on the insured motorcycle.
What to buy: as much as you can afford. Riding without this indemnification is about as dumb as riding without a helmet, in a bathing suit, with no shoes.
Collision or Comprehensive indemnification?
Comprehensive and Collision indemnification covers the cost to repair or replace your motorcycle if it’s stolen or damaged in an accident, and it won’t matter who’s at fault. Comprehensive indemnification pays for theft, fire and vandalism and is sure to include a deductible, or the amount you’ll be liable to pay before your coverage kicks in. Get all exclusions and notice requirements explained before you buy any insurance and avoid problems later.
Medical Payments indemnification pays the cost of necessary medical care you may need as a result of a motorcycle accident and it kicks in regardless of who may be at fault. Limited to medical treatment received within the first three years after the accident and a specific dollar amount, this type of coverage may only apply in some states after any other medical insurance you carry is spent. Few motorcyclists buy this insurance in the mistaken assumption that their hospitalization coverage from an employer will cover the costs. If you don’t have hospitalization insurance and are injured in an accident that’s your fault, this is the only indemnification you’ll collect on for your medical expenses, and they can add up fast.
Custom Parts and Equipment Riders
When Physical Damage Liability indemnification and CPE, is purchased, $1,000 of Custom Parts and Equipment indemnification is included and additional CPE indemnification can be purchased to cover equipment up to $30,000 in value. That might come in handy if you’re riding a custom bike loaded with high-end parts and engineering. CPE riders cover equipment, accessories, enhancements and changes outside of those the manufacturer originally installed.
Some items covered by CPE:
- Electronic equipment
- Trike conversion parts
- Custom paint, plating and exhaust systems
- Getting Some Roadside Assistance
Roadside Assistance riders provide towing to a qualified repair facility and they cover the necessary labor when your bike is disabled as a result of any of the following problems:
- A mechanical and electrical breakdown
- A dead battery
- A flat tire or tires
- Running out of fuel, oil, water or other fluids
- If you’re trapped in snow, water, mud or sand, but usually only if you’re within 100 feet of the road
If you ride a custom or high-end bike, your insurance needs are a little more complicated than those of the casual rider. We’re here to help…