Motorcycle Insurance 101

There’s no question that even people who ride expensive bikes would rather have cheap motorcycle insurance, but is it possible to save cash without scrimping on coverage? The answer is yes.

The Basics

First, it’s important to understand that, like auto insurance, motorcycle insurance comes in several parts. Basic coverage gives you the minimum coverage required by your state, which is usually just a liability policy.

In addition to liability coverage, however, there is also comprehensive and collision coverage. The former is especially important if you use your bike to commute to work or school, or if you don’t have a secure place to store it at night, like a locking garage. It pays out if your motorcycle is stolen, or sustains damage from something like a tree falling on it, or a kid attempting to hotwire it. Collision insurance, on the other hand, pays out if you’re at fault in an accident, and your motorcycle is destroyed or damaged.

If your bike is completely paid for, both comprehensive and collision are optional, but if you have a motorcycle that is still financed, your lender may require both.

Additional Options

Most motorcycle aficionados do not take home a bike and ride it forever without customizing it in some way, which is why one of the optional kinds of coverage you can buy covers accessories, including upgraded parts and newly-added chrome detailing.

What you should bear in mind, however, is that while there are actuarial tables and Blue Book values for stock motorcycles, once a significant amount of customization has been done, a mainstream insurer may not be able to adequately assess the risk and/or value associated with your bike. For this reason, if your ride is as unique as you are, you may want to consider custom motorcycle coverage.

Like the insurance for classic and modified cars, and often offered by the same companies, custom coverage uses agreed value, rather than actual cash value, to determine the maximum payout in case of a total loss. This means that the insurer will look at the bike itself, and any modifications you’ve made to it (with the supporting documentation that you provide), and come to a value that represents the real worth of your machine, a value that you agree to. This usually gives you significantly more coverage for your money.

Other additional coverage, offered by standard and custom insurers alike, includes coverage for passengers, either on the bike or in side cars. You can also buy 24-hour roadside assistance coverage, especially useful if you ride across the country. Finally, like a car, it’s wise to insure your bike against uninsured or under-insured motorists.

Reducing the Cost

Once you’ve determined which types of coverage you wish to buy, it’s time to look at ways to reduce what you’re spending to insure your bike. You can reduce the cost of insurance in several ways, including:

• Increasing the deductible. This is what you pay out-of-pocket when you make a claim, and the higher it is, the lower your annual premium will be. Just remember to keep it to what you can afford.
• Pay electronically: Whether you pay for a full year of coverage at a time, or prefer to make monthly payments you can save a few bucks by setting up an electronic funds transfer, rather than writing checks. Some insurers increase your savings if you agree to accept electronic statements instead of paper, as well.
• Demonstrate experience:  Just as new drivers pay higher premiums, new motorcyclists are typically charged more than those with experience. If you’re a mature rider, you may actually qualify for a discount; if not, you can demonstrate your experience by taking a class in motorcycle handling.
• Security matters: If you install an antitheft device on your bike, like the LoJack tracking system, or if you can prove you keep your motorcycle in a locked garage when not in use, you can save some cash.
• Bundle: If your bike isn’t heavily customized, you can insure it with the same company carrying your auto insurance, for a multiple vehicle discount.

Motorcycle insurance isn’t really all that different from auto insurance. If your ride is a stock machine, it should be relatively easy to insure. If it’s heavily customized, specialty insurance may save you money. Either way, the important thing is that you DO have coverage.

Tweet This Post

Filed Under: Insurance