MOTORCYCLE INSURANCE

Did you know that auto insurance doesn’t cover motorcycles? That’s right. You need to get a policy specially designed for motorcycle owners. Most states require a minimum level of liability insurance, though some states operate under a no-fault system, where all drivers of motorized vehicles buy personal injury protection (see below). Beyond that, most motorcycle owners also want coverage to repair their bike if it’s damaged in a collision or while parked. Here are the options.

Motorcycle Liability Insurance 

Liability insurance for a motorcycle covers payments you must make for:

• Injuries you cause to others when operating your motorcycle,

• Injury claims by others due to your parked motorcycle (for example a roll-away or tip-over),

• Legal defense costs if a lawsuit is brought against you over a motorbike accident, or

• Medical payments for you or your passengers resulting from an accident (optional add-on).

In some states, drivers pay for their own injuries and motorcycle damage when there is an accident. Some of these no-fault states set minimum required levels of liability, so work with a trusted insurance agent who can help you comply with those mandates. Even at-fault states set minimum liability dollar amounts.

Some motorcyclists — especially those who have a high net worth — also opt to add financial protection through an excess liability or a personal umbrella insurance policy. These extend the amount of your coverage, called your limit of insurance, to $1 million or more and, for an affordable premium, give you significant protection. Excess insurance adds coverage to a single policy, while personal umbrella can provide extra insurance for home, auto, boat and motorcycle together. Umbrella can be written to add coverage amounts to all your liability policies.

Motorcycle Damage Insurance

Beyond the required liability insurance, you will probably also want to cover potential damage to the bike itself. There are four basic types of motorcycle damage most owners want to insure:

• Collision

• Non-collision

• Uninsured/underinsured motorists

• Hit-and-runs

Collision Insurance for Motorcycles

Motorcycle collision insurance steps in when you run into something while operating your bike whether it’s another vehicle in motion or something that is stationary, like a concrete post or a parked car. It pays for repairs or replacement (if there is a total loss). You may add rental coverage to get you where you’re going while your bike is in the shop or you await the settlement to buy a new ride.

When purchasing coverage, you will need to decide if you want actual cash value coverage, which includes the depreciation of your motorcycle’s worth since you drove it off the lot, or replacement cost coverage. The latter may be best if you have a classic bike, an exotic motorcycle, or one that has been customized. You, your agent and your insurer will work together to come to an agreed-upon valuation for replacement cost insurance. This is a more expensive type of coverage, but for hobbyists, enthusiasts and high-net-worth owners, it may provide the level of reimbursement you prefer.

Some insurers offer hit-and-run coverage under the collision section of your policy. Talk to your insurance agent to see whether it’s automatically included or you need to add it. There might be an additional premium for this protection.

Non-collision Insurance for Motorcycles

Motorcycles are vulnerable to theft, vandalism, flood, and damage when hit by things while parked. Collision insurance doesn’t cover these incidents, so you need to consider the value of adding comprehensive coverage. It is an optional protection that will step in for a variety of perils. For example, think of a garage fire that destroys your motorcycle or a windstorm causing a tree to fall onto it. Without comprehensive coverage, you would be out the money you spent on your bike or the cost to repair it. Also, if you take your motorcycle on trips far from home, consider adding roadside assistance coverage to your policy to pay for the costs of transporting it should you have a breakdown on the road.

Uninsured/Underinsured Motorist Insurance for Motorcycles

Many people drive without insurance. That means you will likely be left covering damage and medical bills if you are hit by someone without coverage. That is why motorcycle owners secure uninsured/underinsured motorist coverage. It frequently has a lower deductible than collision insurance, but it provides coverage like a collision policy. According to the National Highway Traffic Safety Administration (NHTSA) about 30% of car crashes result in injury versus more than 80% of motorcycle accidents, with the fatality rate being 30 times higher for motorcycle accidents versus automobiles. These statistics are another reason to also periodically review your life insurance needs.

A Special Word on Dirtbikes, Motocross Bikes & Other Off-road Motorized Bikes

For those who own off-road bikes, there is specialty insurance designed for those risks. Motorcycle insurance doesn’t usually extend to off-roaders, so find out about off-roading or racing insurance from an insurance agent.