It used to be death and taxes; now you can add insurance to the list of things you can’t escape, in 45 of the 50 states, anyway. Like any trillion-dollar industry, insurance seems simple enough on the surface but in reality it’s a highly evolved system employing thousands of workers whose main goal is to earn money. Your main goal as a consumer should be to minimize your premiums, but also to realize that riding around with no, or not enough insurance can separate you from everything you own in the blink of an eye. Herein, we attempt to find happiness somewhere in the middle.
For a lot of young impoverished riders eager to get on their first bike, the best option is to buy a used bike for cash and opt for the cheapest liability-only policy they can find – one that only covers the havoc they might wreak on others with their bike – since comprehensive, or “full-coverage” policies for inexperienced riders can be very expensive. Just for fun, we asked Allstate’s online quote machine about a full-coverage policy for an 18-year old California male with two years riding experience wishing to insure a new Ducati Panigale S. Allstate’s Economy package would run $193 a month; its Enhanced policy would set our hypothetical youth back $543 a month! Whoa. (We tried to check 18-year-old male with a Ferrari F40 and two DUIs, but smoke started coming out of our USB ports.)
Really there’s no way of getting around paying a lot for insurance if you’re really young: Allstate wants $93 a month for minimum liability coverage on a 10-year old Ducati 999S even if you own the bike but are 18 years old. By the time you’re a mid-50s male, that policy drops to $27 a month.
Realistically, though, not many 18-year olds are shopping for even 10-year-old Ducatis. Our same hypothetical 18-year old male (with clean driving record) who financed a new Honda Rebel 250 could get a full-coverage policy from Allstate for as little as $49 per month. Stepping up to a brand-new Suzuki SV650 bumps that same “Economy” full-coverage quote by only $18, to $67 a month. Taking the 1200 Sportster plunge jacks your rate to $77. (These quotes are all for the Orange County, California area; premiums also vary of course depending where you live and on how many miles you plan to ride.)
If you borrow the money to buy your bike, whoever loans it to you is going to insist on a full-coverage policy. Buying a “previously loved” 2010 version of each of those bikes outright allows you to opt for a bare-bones liability-only policy (no collision, no comprehensive, no medical) – and that drops the premium to $27 a month for a 2010 Rebel, $34 for the SV650 and $44 for the Sportster on Allstate’s site. We’re an ownership society.
No matter if you’re riding a sportbike, vintage motorcycle, constructed motorcycle (assembled by hand), dual-sport or full dresser, if you are the at-fault party, liability insurance covers everyone but you. In many states including California, those minimum liability limits are $25,000BI/$50,000BI/$10,000PD; BI is Bodily Injury and the PD is Property or Physical Damage. The $25,000 covers any single injured individual. The $50,000 covers all of the injured.
A cheap liability policy is strictly for the benefit of others you might harm: With it, there’s no collision or comprehensive to fix your bike if you hit somebody or something and it’s your fault, or if a tree falls on it, or if an uninsured motorist takes you out. You’re also opting out of medical coverage for yourself (hopefully you already have some sort of medical if you’re riding motorcycles around).
If you grew up with the idea that “It’s just a bike. How much damage can it do,” and now you’re a grown adult with more than $60,000 worth of chattel, it wouldn’t be an unwise move to upgrade your policy for more coverage. No matter how safe you are, strange confluences of events sometimes happen. Your drive chain snaps and goes through the windshield of the Ferrari tailgating you being driven by a supermodel whose career is ended by the loss of her right ear. The rear tire on your bagger blows out, causing you to swerve across the double yellow just long enough to frighten an oncoming bus of nuns which runs into a tree. They will come after your property, oh yes they will, so it makes sense to have coverage at least equal to your net worth. Back to the Allstate calculator, where we find that doubling our limits to $50K/100K/20K raises the 50-something’s premium by only $9 a month.
Being a joiner helps, too. Being married, a member of the AMA, Harley Owners Group, or Honda Riders of America will reduce your payment – and calling a human agent to tell them you’re with Riders of Kawasaki, BMW Motorcycle Owners of America or any club not on the pull-down menu has the same effect. Being safety-minded also helps, and riding a bike with ABS will also lower your premium. Many insurers will also ask for permission to run a credit check, having somehow deduced that those with better credit scores are at less risk of crashing.
About now’s the time you wish you’d gone with the Comprehensive policy… some of them will let you buy extra coverage that covers up to $30,000 in custom parts.
In fact, Allstate’s various discounts are representative of what you can expect from all the big players: Insuring more than one bike gets you a discount (as does of course insuring your dwelling and cars), riding 60 months without an at-fault accident or more than one ticket, or taking a motorcycle safety or defensive driving course will also reduce your premium.
In any case, we don’t have to tell you how much easier it is to comparison shop in the age of the www. Not only do all the insurers with modern websites make it easy to adjust coverages, limits and deductibles until you find your personal happy risk-to-premium spot, you can also pick up useful information in the process. Did you know 46% of all motorcycle crashes occur at intersections? Or that, on average, three motorcyclists are killed every day in the U.S. as a result of multi-vehicle crashes at intersections? There’s more here.
One more tidbit: Did you know that crashing your bike on the racetrack doesn’t necessarily mean your insurance company won’t pay? If you’re just doing a trackday and not actually racing, you can probably get paid, according to this 2011 MO article by motorcycle insurance specialist Kirk Harrington.
There it is. Since nearly all of us have to have insurance, you might as well spend a few minutes making sure you’re not going to be in for any surprises at payout time. And at least it’s way easier than deciphering your health insurance policy. Good luck.
Here are definitions of basic insurance jargon here, from an earlier MO article.
Most states require you to at least have liability coverage. Although variable by state, liability insurance consists of some or all of the following:
Bodily Injury and Property Damage (BIPD):This covers your legal liability where a crash causes injury to another person or damage to another person’s property.
Uninsured/Underinsured Motorist (UM/UIM):While considered a component of liability coverage, UM/UIM is optional in some states, and mandatory in most states. It covers you in the event another person causes an accident with you and is not insured, or his or her insurance doesn’t pay enough for your expenses, including medical payments and lost wages. UM/UIM coverage is intended to make up the difference between the at-fault person’s liability limits and the amount of your expenses.
Medical payments: This component of liability insurance is optional in most states. It pays for necessary medical care you receive as the result of a motorcycle accident, regardless who is at fault. In some states, this coverage only applies after other medical insurance is exhausted.
With liability insurance, there are certain minimums required, and you can elect to raise coverage, or set limits when you sign up for the policy. “Limits” are the maximum amount your insurance company will pay under your BIPD coverage. For example, limits of 50/100/25 mean:
Maximum to be paid per person for Bodily Injury is $50,000.
Maximum to be paid per accident for Bodily Injury is $100,000.
Maximum to be paid per accident for Property Damage is $25,000.
“Full Coverage” Insurance
If you own your motorcycle outright, the following coverages are usually optional. If you financed it, you may be required to carry coverage over and above liability insurance.
Coverages vary by insurer, but usually include:
Comprehensive and Collision: Typically pays for repair or replacement of your motorcycle if it is damaged, regardless of who is at fault. Comprehensive covers your bike if it is stolen or damaged by fire, vandalism or the like. Collision typically pays for damage to your bike if you have an accident with another vehicle or object.
Custom Parts and Accessories: When you purchase physical damage coverage, most insurance companies also provide coverage of at least $1,000 for custom parts and accessories. If this of interest to you, check with companies to determine what they offer.
Roadside Assistance: Typically pays for towing to the nearest qualified repair facility and necessary labor at the place of the disablement when your motorcycle is disabled within 100 feet of the roadway due to mechanical breakdown, discharged battery, flat tire, insufficient gasoline, oil, water or other fluids, or (if applicable) getting stuck in snow, mud, water or sand.
Motorcycle Insurance: Comprehensive Collision Coverage
Motorcycle Insurance: Casualty Liability