Many people only realize the scope and significance of their insurance coverage when it is too late. Insurance policies, particularly for motorcycle owners, are commonly misunderstood. Some insurance agents may lack a thorough understanding of the specific needs of motorcycle owners, while others may prioritize obtaining a deal by emphasizing cheap motorcycle insurance over ensuring you have a comprehensive policy. A false sense of security often arises among individuals who have not experienced a significant insurance claim. Your agent may be your friend, but their involvement in the aftermath of a wreck or claim is non-existent. It’s essential to be proactive in understanding and securing the right insurance coverage, rather than relying solely on the reassurance of your agent.
Like car insurance, there is a minimum liability requirement with an option to add more coverage. However, it is important to note that there is no standard “full coverage” policy. The state minimum policy is very barebones and should not be used as a benchmark. To stay protected from any nightmare, it is important to understand different kinds of coverage on top of the state minimum policy. In our discussion, we’ll dive into the details, such as anticipated expenses, potential cost-saving strategies, and an analysis of different motorcycle insurance coverage scenarios, to help you understand the realities of motorcycle insurance.
Average Cost of Motorcycle Insurance
Whether you’re a current motorcycle owner or contemplating ownership, securing motorcycle insurance is a legal requirement. In nearly all states, legislation mandates motorcycle insurance, providing a protective layer for riders. The good part is that this insurance is generally cheaper than its auto insurance, averaging around $40–$150 per month. However, the precise premium you’ll encounter hinges on variables like your age, location, additional coverage, driving history, etc.
Typical Motorcycle Insurance Coverage Options
While state minimum policies may help you meet legal requirements, they may not provide adequate coverage for your personal needs and assets. Some people even go on to say that paying the bare minimum just to be legal is irresponsible and selfish. Let’s look at what kind of coverage is available and how much coverage you require.
State minimum policy
This is the minimum coverage you need to stay legal while driving a motorcycle. You need $25000 for bodily injury or death of one person in any one accident, $50000 for bodily injury or death of any two persons in any one accident, and $10000 for injury to or destruction of property of others in any one accident. The amounts mentioned can vary from state to state, but the general idea is the same across the country.
Bodily Injury Liability Coverage
It is coverage for the damage you do to another person in a wreck. Liability coverage comes into play to fulfill your legal obligation to the other party involved. The bodily injury claim refers to coverage for that person’s medical bills and lost wages. The liability coverage also pays for a lawyer who will defend you in case you get sued.
Property Damage Liability Coverage
As the name suggests, it is coverage for the damage you are responsible for to another person’s vehicle or its contents. It also kicks in case the other party has a rental car for the “loss of use” claim.
Uninsured or Underinsured Motorist Bodily Injury Coverage
This coverage is very important to understand, and it can greatly benefit you. It kicks in when someone is responsible for an accident and they don’t have any insurance or enough insurance. This coverage will pay for what the other person should have paid, up to the limits of your coverage.
Many brush this coverage aside, as we might think everyone would have insurance if they were on the road. But that’s not always the case, despite the law stating that you have to have insurance to drive. The reality is that many people on the road don’t have insurance or enough insurance to pay for the damage they cause. It is commonly considered an acceptable exclusion to save money, but legal experts highly recommend having this coverage to pay for your medical bills if someone uninsured causes you a wreck.
Uninsured or Underinsured Motorist Property Damage Coverage
This coverage is for any damage caused by an uninsured or underinsured driver to your vehicle and its contents.
Personal Injury Protection (PIP) Coverage
This coverage will pay for medical bills, funeral and burial bills, income continuation, and any loss of services incurred because of such an event. This is a no-fault type of coverage, which means it does not matter what caused you to get hurt. It can be your fault, the other party’s fault, or no one’s fault.
Any insurance company providing automobile coverage policies must offer minimum personal injury protection coverage for every insured with the following benefits:
- Medical and hospital benefits of $10000
- Funeral expense benefit of $2000
- Income continuation benefits of ten thousand dollars, subject to a limit of two hundred dollars per week
- Loss of services benefits of five thousand dollars, subject to a limit of two hundred dollars per week
It is highly recommended to have this coverage too. If you have health insurance, then it may pay some bills in case of an accident, but this coverage will greatly help you if you either don’t have medical insurance or if it does not pay for the required type of treatment. It is relatively cheap, and sometimes it is the only coverage that pays.
This coverage is also no-fault, and it covers damage from any collision, regardless of the reason. However, there are a few things to understand before asking what it covers. Firstly, there is a difference between a wreck where your bike is totaled and a wreck where your bike is repairable. The term “totaled” means that the cost of repairing your bike is more than its actual value.
What determines the value of your bike? In insurance terms, it is regarded as ACV, or Actual Cash Value which is the amount someone would pay for your bike if it were on sale. It is important to note that the ACV of your bike does not add to the value of any custom modifications it may have (unless there is a specific endorsement to the policy). So, what can be done about this? The correct way to approach this is to know what coverage you are getting. Check if there are special policies that can cover custom modifications.
This coverage takes care of accidental damage to your motorcycle caused by losses such as fires, thefts, etc. essentially all those other than collisions. Your clothes, tools, or custom items are not included in this policy. Helmets approved by the Department of Transportation are included in this policy.
Towing and Storage Coverage
This coverage policy kicks in when your motorcycle is not in a condition to be operated. In such a situation, you will need someone to take it somewhere. If you store it somewhere, then those charges will also be covered under this policy.
How much Motorcycle Insurance Coverage is enough?
As mentioned earlier, there is no full coverage policy. Even if you get all the policies, you will only be protected for claims up to the limits of the said coverage. The limit will be the amount you decide. For all coverage policies, the limit will be defined by you, and anything over it will come out of your wallet.
Keep in mind that the ultimate goal is protection in case of accidents. There is no worse feeling than laying on a hospital bed thanks to the fault of an uninsured driver or getting sued for way more money than you have coverage.
Factors that Dictate Costs of Motorcycle Insurance
Apart from the type of coverage policies you have chosen in your insurance plan, several factors affect the cost of insurance. Here is a summary of each factor:
Some states have more expensive than others for motorcycle insurance premiums. This is affected by the rules and regulations of states. Another point here is the winter seasons in different states. In the US, motorcycle riding is seasonal which leads to expensive plans in states with milder winter seasons and cheaper plans in states with harsher winter seasons.
Age and gender of Driver
Similar to car insurance, age, and driving experience heavily impact the cost. An 18-year-old will receive a higher quotation when compared to a 30-year-old with a clean driving record for the same plan. Some statistics show that female bikers tend to get cheaper plans compared to their male counterparts of the same age.
Type of Bike
The type of bike significantly impacts insurance costs. Insurers consider the value of your bike, safety features, crash data of that particular model, and theft rate in your area when calculating premiums.
People with clean driving records will receive cheaper quotations. On the other hand, people with bad records can expect higher rates for the same plans. Some insurers might refuse to insure their vehicle in some extreme cases. It is generally determined by insurers by judging how much of a risk you are while driving.
People tend to be attracted towards cheaper insurance rates and that is understandable in these times. But everyone should know that the purpose of insurance is to safeguard you from unfortunate accidents. You might get a cheaper plan and pay less per month by just opting for state minimum plans that fulfill the legal requirements. All it takes is one accident. One lapse in judgment or one car you didn’t see or hear coming. Anyone that thinks they’re good enough to avoid any accidents, is lying to themselves. Even professional racers get into accidents and I can guarantee you’re not anywhere near as good.
It is important to understand the actual purpose of insuring your vehicles. It is done to protect you, your vehicle, and other drivers around you in case of an unfortunate incident. Try to understand what protection and up to what limit you need instead of trying to save 15% on monthly premiums by excluding key coverage.
Frequently Asked Questions
How much Motorcycle Insurance should you have?
A general well-rounded policy can have the following coverage options in it,
- Bodily Injury Liability Coverage
- Uninsured/Underinsured Motorist Bodily Injury Coverage
- Property Damage Liability Coverage
- Personal Injury Protection
The limit on these policies is dependent on each individual’s financial situation. Consider asking insurance agents for that.
Are Motorcycles expensive to insure?
Motorcycles are cheaper to insure than cars. This is because motorcycles are used as secondary vehicles and are cheaper to repair/replace than cars.
How much does average Motorcycle Insurance cost for a 21-year-old?
The average cost of motorcycle insurance for 21-year-olds is about $53 per month or $634 per year. The actual figures might be different because of different other factors influencing insurance rates.