Friday, September 16, 2011
The Joys of Learning to Ride - Motorcycle Insurance
In my search for the perfect motorcycle, a looming issue has hung heavily over my head. While what color I want has been plaguing me recently, more importantly, what's the deal with motorcycle insurance? I've heard all of these rumors about motorcycle insurance being ridiculously expensive, and, while my lust for motorcycles drives me to want to buy one at any cost, I can't deny that I'm limited by a budget. So the thought of having to sell my toes one by one on the black market (although why anyone would want to buy them is beyond me, and quite frankly I just don't want to know) just to afford monthly motorcycle insurance puts me off slightly.
Before I did a little research on the subject, I had a few conversations with other non-motorcycle owners. Turns out, I wasn't the only one with the same ideas about motorcycle insurance. When I said that I was looking to buy a motorcycle to a family member, the exact response I received was, "That's great, but how in the world are you going to afford all of that insurance?" I decided to keep my toe-selling scheme to myself.
Then one conversation changed it all. I half heartedly proclaimed my reservations about buying a motorcycle because of the insurance issue to which I was told, "I only pay about a hundred bucks a year for mine with (enter unnamed major insurance company)." I was shocked. A hundred dollars a year? This could not be true! If I couldn't afford to drop a bill a year to insure my ride, well, I don't deserve to reward myself with a motorcycle. That's roughly 25 cents a day. I spend way more than that on Red Bull each morning.
My brain was buzzing with questions (partially thanks to my morning Red Bull). Was this only one crazy insurance company or do all companies offer such a steal? Is it the same if my bike costs $1,000 vs. $10,000? What about the fact that I'm a new rider? If I get into an accident, will this cover me? Or do I need to upgrade to the toe-selling-on-the-black-market insurance package to really protect myself? But with a little digging, I found that I was able to find quite a few answers.
Here is a few of the major questions that a lot of new motorcycle owners tend to have, myself included:
1. How do insurance companies figure out my rate?
Insurance companies assign you a price, or rate, based on what the insurer believes it will cost to assume the financial responsibility for any potential claims. Several factors affect this rating including where you live, age, marital status and the year, make, and model of your bike.
2. What is liability coverage?
Required by law in most states, liability coverage is made up of the following:
Bodily Injury and Property Damage (BIPD): Covers your legal liability for an accident where there is injury to another person or to another person's property up to the limits, or dollar amounts, you select.
Uninsured/Underinsured Motorist (UM/UIM): If another person causes an accident with you and doesn't have insurance or doesn't have enough insurance this coverage will pay your expenses, like medical payments or lost wages. The coverage is designed to cover the gap between the at-fault person's liability limits and the amount of your expenses. Unlike mandatory BIPD, UM/UIM is mandatory in some states and optional in others.
Medical payments: Pays the cost of necessary medical care you receive as the result of a motorcycle accident, no matter who is at fault. In some states, this coverage only applies after other medical insurance is exhausted. This is usually an optional coverage.
3. When I got an insurance quote, the site asked me to choose the limits I wanted. What does that mean?
Limits refer to the maximum dollar amount your insurance company will pay under your Bodily Injury and Property Damage coverage. For example, a limit of 50/100/25 means: Maximum of $50,000 paid per person for Bodily Injury / Maximum of $100,000 paid per accident for Bodily Injury / Maximum of $25,000 paid per accident for Property Damage.
4. It's common to hear riders say "I have full coverage." What does that mean?
Riders could mean they purchased Liability Coverage plus Physical Damage. At Progressive, the Physical Damage coverage includes the following:
Comprehensive and Collision: Covers the cost to repair or replace you motorcycle if it is damaged, regardless of who is at fault. Collision pays for damage to your vehicle when you collide with another vehicle or object. Comprehensive covers your bike if it is stolen or damaged by an event like fire or vandalism.
Custom Parts and Accessories: When Physical Damage Coverage is purchased, most insurers also provide at least $1000 of Custom Parts and Accessories coverage. Progressive covers up to $3000 at no extra charge, and additional coverage can be purchased to cover equipment up to $30,000 in value.
Roadside Assistance: Provides 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, dead battery, flat tire, lockout, insufficient supply of fuel, oil, water or other fluids or getting stuck in snow, mud, water or sand.
5. I think I just need Liability coverage since my bike isn't worth that much, but I really want Roadside Assistance. Can I just purchase that part of Physical Damage?
It depends on the company. At Progressive, if you prefer to just purchase Liability coverage, we offer Roadside Assistance for an additional $10 per year.
6. If I make a claim and need my bike fixed, my insurance company will require me to use a certain shop. Is that true?
No. You are always free to use the shop of your choice. At Progressive, if you choose to get your bike fixed at one of the shops in our network, we will guarantee the repairs for as long as you own your bike. No insurance company is allowed to require you to use certain repair centers.
7. If I purchase Comp/Collision coverage and I total my bike, will I get fully reimbursed?
It depends. Bikes, just like cars, depreciate the moment they are ridden out of the showroom. If you have Comp and Collision, most companies will pay you the "market rate" to replace your bike if it is totaled. Progressive also offers Total Loss coverage that can be purchased for newer bikes. If your bike is totaled, we'll write you a check for the MSRP of the current model year motorcycle of the same make and model.
8. I'm going to take my bike on a road trip. Are there coverage options I should look into to make sure I'm protected?
Check your policy or consult with your insurance company. At Progressive, your Liability and Physical Damage coverage will protect you while riding within the U.S. and Canada. Progressive also offers Trip Interruption coverage. If your bike is disabled more than 100 miles from home, Progressive will provide up to $200 per day for lodging, food and transportation until you can get home or your bike is fixed.
9. How can I save money on my motorcycle insurance?
All companies have different prices based on how they determine your rate. One of the easiest ways to save is to be a responsible rider; Progressive automatically knocks 5 percent off your rate each year you renew without a claim. You may also be able to save by increasing your deductible, insuring multiple vehicles with the same company, paying in full, taking a safety course and installing a theft protection system, like Lo Jack.
10. What information do I need to get a quote?
When getting a price quotes either directly from the insurance company or an agent, it is important to provide the same information to each for a proper comparison. You will usually need the following information in order to get the most accurate rate: the year/make/model of your bike, your driver's license and Social Security numbers, and the coverage and limits you want.
11. How do I choose the insurance company that's best for me?
All companies are different and every motorcyclist has different things they want in an insurance company. Usually, riders say they want a company that treats them well, has the coverage they need and doesn't cost too much. It's also important to think about how that company will take care of you if you do need to file a claim. Today there are many easy ways to gather information directly from insurance companies' Web sites and even get quick quotes online or over the phone.
Sure after learning all of the answers to these questions, a few still remain. But it's a good start to understand motorcycle insurance better in order to make an educated decision. Next step: get quotes from various insurance companies and compare.