Motorcycle insurance provides financial protection in the event of a motorcycle accident, loss, theft or damage. Motorcycle insurance includes liability coverage in case you are responsible for another person’s injuries or property damage. These policies provide coverage for motorcycles, choppers, fast street bikes or “crotch rockets,” mopeds, and even Segways.
If you have just purchased a motorcycle, or have owned one for a while and are considering changing insurance providers, you may have several questions. Do you wonder what motorcycle insurance will cover, and what financial risks you face in the event of an accident? You can get your questions answered by a local professional who understands the requirements of your state, and will get to know you and your coverage needs.
What Is Motorcycle Insurance?
What Does Motorcycle Insurance Cover?
A standard motorcycle insurance policy will cover some portion of the costs associated with damage to your bike. It will also provide compensation in the event that you cause harm another person or their property or have legal fees to pay an accident. Known as “bodily injury and property damage liability,” your motorcycle liability insurance covers the cost of liability claims and legal fees, up to the limits of your policy, if are at fault in an accident.
You can customize your policy to cover the following:
Full replacement cost of your bike, in the event that it is totaled.
Comprehensive coverage, which will pay for loss or damage due to causes “other than collision.” This includes hail and other weather damage, damage from animals, and most importantly motorcycle theft.
Medical payments, in the event that you require hospitalization or medical care.
Uninsured/under-insured motorists coverage, in the event that another driver is at fault in an accident and does not have adequate insurance to pay your costs.
Damage or loss to your gear and upgrades, such as transport trailers, sidecars, custom exhaust equipment, and safety apparel like chaps and helmets.
When you choose what you want your motorcycle insurance to cover, find a balance between protecting yourself against the risks you face and what you can budget for coverage. The good news is that there are many ways to save on your motorcycle insurance if you are a safe rider with a good driving record.
How Much Motorcycle Insurance Do I Need?
The amount of motorcycle insurance that you need depends on the type of bike you own and how you plan to use it. For example, if you ride a fast bike such as a racing bike or a super sport motorcycle (also known as a “crotch rocket”) your bike will be costlier to insure. Additionally, you may want to increase the amount of motorcycle liability insurance as well as your coverage for hospital and medical care.
Any bike with an extremely high horsepower-to-weight ratio is designed for speed and maneuverability, meaning riders tend to ride faster and weave between cars. These riders have a greater risk of serious injuries as well as potential incidents that cause injury to others.
If you plan on racing dirt bikes for fun, you may want to consider increasing your coverage as well. The close-quarters racing and crowded tracks can put you at greater risk of injury, damage to your bike, and an increased risk of causing injury to a competitor or damaging someone else’s equipment.
How Does Motorcycle Insurance Work?
Motorcycle insurance works in the same way that car insurance works. For example, if you have bodily injury and property damage liability coverage, any damage you cause to someone’s property is covered by your insurance policy, up to the limits of your policy.
Your liability coverage will also cover some portion of your legal costs, if an injured party files a lawsuit against you. Again, the amount your insurance will cover depends upon the limits you choose when you buy your policy. If the cost of the claim is beyond the limits of your policy, you will be responsible for paying any costs out of pocket for the other party’s injuries or damages.
Depending on the amount and type of coverage you have, your policy may also cover medical or hospital costs for you and your passengers. Uninsured/under-insured motorists insurance will pay for the costs of an accident if a driver caused the accident who was not adequately insured.
If you have comprehensive insurance, you will be covered for losses not by a collision. For example, comprehensive covers motorcycle theft of your bike, or parts of it. After a loss, you will file an insurance claim and receive compensation up to the limit of your policy, after your deductible amount is subtracted. For example, if you have a $500 deductible, and you suffer $1,300 dollars in damages during a collision, you are responsible for the first $500, and the insurance policy will pay the additional $800 to complete repairs. If the damage amount is less than the deductible amount, you would not receive compensation for the claim.
Most carriers allow you to adjust the amount of your deductible. The lower the deductible, the more you will pay for premiums. If you pay a higher deductible your premiums will be lower, but you will have more to pay out of pocket at the time of a claim.
If you work with an independent agent, you can customize a policy to protect against the threats you are most concerned about, such as theft, property damage, vandalism or weather damage. You can even insure yourself against the bike breaking down and ruining your vacation.
How Much Does Motorcycle Insurance Cost?
The cost of motorcycle insurance varies widely. If you have a small Honda that you use for commuting and have a claims-free driving record, you may pay a few hundred dollars a year. On the other hand, if you are a new teen motorcyclist and you are buying a crotch rocket, you may pay $3,000 to $5,000 per year in premiums.
Overall, motorcycle insurance can seem expensive to those who are used to paying car insurance costs. The reason for higher rates for motorcycle drivers is the higher risk they face on the road. For example:
Motorcycles are more difficult to see on the roadway and in blind spots.
Motorcycle crashes result in a high incidence of serious and fatal injuries because the rider has little protection as compared to a vehicle with steel reinforcement and airbags.
Motorcycles, and sport bikes in particular, are easy to steal. Two or three people can hoist one onto a truck and be gone in moments.
Recovery rates for stolen motorcycles are low because they tend to be sold for parts. Thieves can simply buy a frame from one of the thousands of crashed bikes, remove the engine, wheels, and everything else from the original frame, then mount it onto a new frame and get a clean salvage title.
If you want to save on insurance costs, there are several strategies you can follow:
Buy an older bike that does not have a high value
Buy a bike with a smaller engine (under 600cc)
Take a motorcycle safety course
Ride safely and remain claims free
Is Motorcycle Insurance Required?
A certain amount of liability insurance is required in every state and in the District of Columbia. The precise amount varies from state-to-state, however. The state with the lowest liability requirements is Louisiana, which requires motorcycle operators to buy $20,000 of personal injury coverage, and $10,000 in property damage coverage.
The states with the most stringent requirements are Maine and Alabama, which each require cyclists to have $100,000 in injury coverage and $50,000 in property damage coverage. The injury coverage amount is the maximum amount the insurance company must pay out for all persons injured in the accident, including the operator.
Why Is Motorcycle Insurance Important?
Motorcycle insurance is important to protect yourself and others and to protect your bike. Motorcycles are much easier to steal than are automobiles or passenger trucks. Also, once stolen, they are easy to strip down, rebuild, and sell. Moreover, motorcycles are much more dangerous to operate than are passenger vehicles, for several reasons:
They’re small and hard for other motorists to see.
They’re very fast and maneuverable, which makes them even harder to see.
They operate on two wheels; a moment of inattention can result in an accident.
Operators have no protective devices, such as seat belts or air bags.
For all of these reasons, it is vital that you get yourself covered if you plan to operate a motorcycle on the highway. If you plan to race your bike, either competitively or for fun, it is even more important that you insure yourself and your bike. This is true whether you plan to race on level ground or on off-road, motocross tracks.
Does Motorcycle Insurance Cover Track Days?
Whether or not your insurance covers track days depends on your policy and your carrier. Some companies do cover track days, while others do not. Those that do cover track days, however, usually do so with several exclusions. For example, many will not cover accidents that occur during a race, timed event, or speed test. They will, on the other hand, pay out for accidents that occur on a track day during which you were riding for the purpose of improving your bike-handling skills and to become a safer, more defensive driver.
Does Motorcycle Insurance Cover Theft?
Depending on your policy, motorcycle insurance may cover theft. Most, if not all, comprehensive insurance policies cover theft of your motorcycle whether it happens at home, on the road, or during transport. Comprehensive coverage also pays for anything that might be stolen from your bike, such as mirrors, a radio, helmets, or other accessories. Be aware, though, that insurance companies only pay out if the loss exceeds your deductible.
Lower deductibles will require you to pay more for premiums, but you can determine the amount of deductible at the time you purchase your policy. Be sure to keep records of any add-ons or modifications you have made to your bike that affect its value.
Does Motorcycle Insurance Cover Other Riders?
Whether or not other riders are covered by your motorcycle insurance depends entirely on your policy and your provider. If you bought only the minimum liability coverage, other riders may not be covered. Moreover, coverage depends on whether the other rider was a passenger while you operated the bike, or whether you had loaned the bike for someone else to ride. You can only receive a definitive answer to this question by reviewing your insurance policy with your insurance agent. This is an important question, so make sure you bring it up when you ask us for rates and policy information.
Understand the Policy
An insurance policy is a written contract between the insured and the insurance company. The protection provided by the policy typically represents a significant part of an individual’s overall risk management program. Thus, it’s important for an insured individual to read and understand key policy provisions such as the following:
What perils are covered in the policy? A basic policy may not provide as much protection as is necessary.
What perils are not covered? For an additional premium, coverage for excluded perils or situations can often be added to a policy.
What are the limits of coverage? The maximum dollar amount the insurance company will pay in the event of a covered loss.
What are the deductible amounts? A deductible is a dollar amount the insured must pay before the insurance company pays its portion of the loss.
In the event of a loss, what are the duties of the insured? A policy will usually list the steps that must be taken in the event of a loss.
Seek Professional Guidance
Insurance agents and brokers, insurance counselors, and other trained financial consultants can help provide answers to detailed questions about a particular policy. These professionals are also helpful in selecting the right policy and the appropriate amount of coverage.