Motorcycle Insurance: Liability, Programs, Costs & More
February 1, 2021
- Last edition
February 2, 2021
The lure of the open road and the rumbling sounds of the steel pony are iconic symbols of freedom that help make riding motorcycles increasingly irresistible, as growth trends indicate. The Motorcycle Industry Council's polling found that the percent of motorcycle households rose from 6.94 in 2014 to a record 8.02 in 2018, increasing more than 1.5 million homes. Such growth creates new sources of prospects for motorcycle insurance program providers.
Motorcycle insurance is like personal automobile insurance. It provides a range of coverages that will pay for financial losses stemming from injuries, damages, or both when the vehicle is in operation or is stolen or damaged while parked. The basic motorcycle insurance policy required by nearly all states provides liability insurance to cover the costs of damages and injuries the insured causes to others. Optional and recommended coverage is available to protect the insured's motorcycle from damages and injuries to themselves and their passengers that they may suffer in the bike’s operation. Some insurance companies offer multi-bike discounts for insureds with more than one motorcycle.
Usually, a policyholder's liability insurance is in force as either the primary or secondary coverage in accidents involving them. The policy may not extend fully when the insured is riding a borrowed or rented bike not specified under their policy coverage. It is incumbent on the agent to inform the policyholder and for the insured to be aware of the coverages in the policy they purchase.
What is Motorcycle Insurance & Who Needs It?
A motorcycle is a motor-powered vehicle with a seat or saddle for a rider and with no more than three wheels in contact with the ground. Off-road vehicles, mopeds, Segways, custom-built bikes, and trikes are all motorcycles for insurance purposes.
Most states have minimum liability insurance laws unique to the state. Motorcycle liability insurance covers payments to another person's injuries or property damage caused by the motorcycle owner. Uninsured/underinsured motorist coverage is also a requirement in some states.
Motorcycle insurance basics are comparable to personal auto insurance. A motorcycle insurance policy covers some of the financial losses related to damage to the bike. It will compensate another person for injuries or damage to their property for harm caused by the covered motorcyclist and help for an accident's legal fees.
Motorcycle Insurance Coverages
Although motorcycle liability insurance, which includes both Bodily Injury and Property Damage coverage, is the minimum requirement in most states, adequate protection against other common risks requires more extensive coverage and is advisable in nearly every case. Find an explanation of the types of motorcycle insurance below.
Bodily Injury/Property Damage (BI/PD)
Bodily injury pays for injuries to others harmed in accidents caused by the policyholder. Property damage pays to repair or replace damage to others' property when the insured is deemed responsible in an accident. BI/PD does not extend to pay for injuries to the insured or damage to the insured's motorcycle. In some states and on some policies, insureds can add Guest Passenger Liability, which covers a passenger injured while riding on their bike.
Uninsured or Underinsured Coverage (UM/UIM)
Uninsured/underinsured motorist coverage protects insureds by covering damages to them or their property caused by another driver who has no insurance (uninsured) or lacks adequate policy limits to cover costs (underinsured). A typical UM/UIM policy includes medical treatment and lost wages. Depending on the policy issued, it may add in property damage.
Collision pays for repair or replacement to the insured's motorcycle when damaged in an accident, minus a deductible amount chosen by the insured at the policy inception. Typical deductible amounts are $500 and $1,000 per incident. Higher and lower deductibles are sometimes available depending on the carrier and the type of policy selected.
Comprehensive coverage pays for a motorcycle's repairs or replacement if the bike or parts from it is stolen, vandalized, or damaged by a fire, storm, or some other event that is not a collision with another vehicle. Comprehensive motorcycle insurance includes coverage for collisions with animals.
Medical Payments (MedPay)
Although it is not available in every state, MedPay covers medical bills for the insured and passengers hurt in an accident. MedPay does not cover lost wages or other losses. It usually is supplemental to the insured’s health insurance.
Drivers deemed high-risk go in an expensive tier known as nonstandard coverage. Insurers also have preferred and standard risk coverages. Speeding tickets, poor claims experience, and DUIs are typical reasons for insureds to fall into nonstandard insurance. While policy limits are the same, the cost is higher to help carriers to offset higher risks with drivers in this category.
The value of motorcycles, like cars, depreciates over time, except for vintage, classic, and rare vehicles, which have coverages and policies designed for them exclusively. Policies with replacement cost coverage will pay to repair or replace without considering depreciation. A policy with Actual Cash Value will only pay for replacement costs after deducting depreciation.
Custom Motorcycle Parts/Equipment (CPE)
Motorcycle owners are passionate about their bikes. They take great pride and interest in customizing and accessorizing them with custom and aftermarket equipment. Most Comprehensive or Collision policies will include at least $1,000, and in some cases, up to $3,000 in coverage for loss or damage to Custom Motorcycle Parts and Equipment. In some states, standard policies include accessory coverage with limits. For heavily customized bikes, insureds can purchase up to $30,000 in additional CPE coverage.
Examples of CPE include equipment, devices, accessories, and improvements to a motorcycle or off-road vehicle beyond what was on the bike when delivered from the manufacturer, they include:
● Electronic equipment
● Attached sidecars
● Winches, plow blades, and mower attachments
● Conversion kits
● Custom paint and metal finishes
● Custom exhausts and plating
Helmets and safety riding apparel
Insurance Costs (and what factors affect the price)
Age, riding experience, claims history, type of motorcycle, type of coverages included, usage, location, deductibles, and more factors affect a motorcycle insurance programs' price. Teenagers driving a crotch rocket can expect to pay higher premiums than older drivers with safe records riding less powerful and slower motorcycles. The range for the price of cheap motorcycle insurance covering minimum liability protection is approximately $700 to $1,300 annually depending on location and other factors.
Best Motorcycle Insurance Programs
If you seek to find the best motorcycle insurance programs noted in an online motorcycle insurance directory, check out the listings on ProgramBusiness.com, where you gain all access to top-tier markets. Its directory provides thousands of markets and business insurance lines to secure coverage for your clients and prospects.