Motorcycle Insurance: Final Thoughts
Our insurance expert imparts some closing wisdom
As a quick review from past articles, I am reminding you how important it is to keep your liability limits at the state minimums or higher. Remember, it’s not you that I’m worried about. It’s the financial burden your family must deal with in the event of a bodily injury catastrophe. If you perish in an accident you don’t want your family paying for the injuries of others through any lawsuits that may be filed. Additionally, you wouldn’t want your paychecks to be garnished or liens put on your home should you survive. Liability coverage is the cheap part of motorcycle insurance. Take advantage of that fact and make the limits match that of your income level if you are a home owner or have other equity assets.
Speaking of assets, your bike does depreciate. If you are financially sound and you are insuring a bike (or bikes) with values of less than $3500, consider dropping the collision coverage if you know it will not cause financial strain to repair it or replace it if there is a loss.
Protecting yourself from theft is the important part at this point. Comprehensive will certainly be cheap in this case. Make sure you understand the uninsured motorist laws and coverage for your state. Many don’t see the value of this coverage. The fact is the value resides in the bodily injury coverage. This is what will pay for your bodily injury if you are not the at-fault party. I, typically, will ask the customer to match the liability limits that they have chosen. Why? Because your injuries aren’t worth any less than those that may incur injury if you were at fault. Your life is valuable to your loved ones, and to short change yourself is to short change them.
Transitioning to stupid things insurance companies do to make customers mad is next. In all cases you must keep in semi-regular contact with your insurance agent, broker or direct underwriter. The dirty little truths I will mention are here to remind you that you do have control of how things go on your policies and if you need to make changes it’s absolutely your right to seek those changes. Ask questions and if you feel the explanation isn’t satisfactory then keep bugging people until you are satisfied.
Most every motorcycle insurance company will adjust rates every 18 months or so. They do this because actuaries (bean counters) look at losses and need to spread the pain of those losses across the board to everyone in order to keep making money. To believe that this is a business of “break-even” is plain silly. We are a capitalist society and without profit people don’t work. That said, when your renewal comes and you suddenly are looking at a 25% increase in you premium, don’t yell at the agent. We are simply the seller of the policies. We have no control over rates. What we do have control over is moving things around.
What most agents don’t tell you and what most insurance companies won’t tell you is it is possible that you can simply be in an outdated program. Insurance companies don’t automatically switch customers from old programs to new ones that will save them money. Actually, they are banking on the fact that you aren’t paying attention to the policy and just continue to pay it year after year. Agencies like mine don’t rely on expensive management systems to remind us of who is up for renewal and when. We just don’t make enough money for such luxuries. I constantly tell my customers to call before the renewal and to not automatically pay the renewal offer. In many cases I can keep them with the same insurance company, but often it’s just time to move along to the next company offering a better rate.
We are here to help you save money. It’s our job to make sure that underwriting headaches are kept to a minimum, but mistakes do happen and most can be corrected without huge hassle to all parties. VINs get messed up, lien holders are recorded incorrectly and in some cases completely wrong motorcycles are added or subtracted from policies. You shouldn’t get frazzled when these things happen. We are human and errors happen. A solid agent will quickly get things corrected.
Let’s move on to the subject most dread. Claims are a hassle. As an agent I can tell you that most people simply do not want to understand the claims process. They just want the money due to them to make them “whole” again. Well, life is not that easy and you should be proactive in your own claim or the claims paid to others. If you are injured in a case and you must have any medical assistance to make you well, you must keep records of all doctor visits. If the claims department is moving too slowly and you can’t seem to make progress by yourself then lawyer up. I know that people have an intense dislike for personal injury attorneys, but they are one of the necessary evils of the claims process. Don’t be afraid to make a call to discuss your case. It could be the difference between paying for medical bills or not.
As for the bike, you own it and know what you have invested in it. Harley riders tend to heavily accessorize motorcycles. Sportbike riders tend to spend money on performance upgrades. Keep spreadsheets on all your purchases and update your agent for every $1000 spent over the first $2000. This will keep the headaches to a minimum when you are trying to put your bike back together.
If your bike is stolen or a total loss, this list will certainly prove your case in the value assessment. However, going back to the “profit” part of the insurance business, it’s important to realize that the first offer by any motorcycle insurance company will be based on the trade-in or rough book value of your bike. DO NOT GET FREAKED OUT! Go armed with data. NADA, Craigslist, eBay and Cycle Trader are your friend. Look up your model of bike and use that information in the negotiation process. It will help make your case to make you “whole” again. I use the word “whole” because that is supposed to be the purpose of insurance.
In the end, if you are in the middle of a claim and you seem to be at an impasse, you shouldn’t cave. Every state has an insurance commissioner’s office. This office is the consumer protection advocate. They approve rate changes and allow companies to do business in your state, but the primary job is to make sure that the consumer doesn’t get shafted. Use that knowledge and let the insurance company know that you have no problem sitting down with an arbitrator to negotiate your claim. Insurance companies hate this tactic because it costs them money to send attorneys there to deal with the process. You have consumer rights and you must be proactive in the process to make sure you utilize every resource in order to have a fair outcome in the claim.
That’s all there is really. I hope you all learned some things about the insurance world. Keep in touch with us agents. We are here for you not the insurance companies. Our reason for getting in the business was that we enjoy helping others. It’s not a pretty business, and as agents we are left out of the underwriting and claims parts of the process, but we all will usually do our best to make headaches go away as fast as possible. We don’t always have the solutions at issue, but most of the time we can put you on the path of resolution when needed.
At renewal call your agent to make sure what you are paying is still the best deal going. I move nearly one-third of my customers every season from one company to another as rates and underwriting demands change. It’s not a big deal, but it only works when you communicate with us.
Thanks for allowing me the opportunity to serve the MO community. See you in the Forum.
Kirk Harrington is a longtime rider and avid motorcycle enthusiast, and he’s one of the nation’s only specialized motorcycle insurance agents, operating from his location north of Atlanta, Georgia.
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Motorcycle Insurance: Property or Physical Damage
Motorcycle Insurance: Uninsured and Underinsured Motorist Coverage
Motorcycle Insurance: Comprehensive Collision Coverage
Motorcycle Insurance Buyer’s Guide
Motorcycle Insurance Basics