The Five Most Asked Questions About Motorcycle Insurance
What happens if I submit a small claim on my motorcycle insurance policy? Will my rates go up?
No easy answer here, but…maybe. This question presents a serious challenge as how your policy will be affected once a claim is made varies based on the situation surrounding the claim and that happens to be different for every insurance company.
If you’re in good standing with your insurance carrier – and have no previous claims – you should be fine and your rate shouldn’t change one bit. The biggest determining factor of whether your rates will be affected is whether or not you are at fault.
If you’re not at fault, your rate shouldn’t be affected, but if you are at fault, it can be a whole ‘nother story. What happens next might also depend on the size of the claim. If you crack up your Brough Superior SS100, the way things go will be a lot different that if you had laid down your Honda CBRR600 in a parking lot.
Consider also that one consideration to take into account when deciding whether or not to submit a claim is the amount of your deductible. If the cost of repairs is less than your deductible, don’t submit a claim. It’s that simple…
No matter what, always let your insurance company know if you are involved in an accident involving an injury to a third party or damage to a third party’s property.
If I lend my bike to a friend and he wrecks it, is he covered under my insurance?
The rule that applies here is “insurance follows the bike.” In insurance business lingo, what we’re talking about here is what they like to call a Permissive Use Policy. As long as the person is riding your bike with your permission, the bike – and your wallet - is covered.
It would still make sense for you to carefully consider whether or not you should lend your bike to your friend. If an accident does happen, your insurance company will likely cover the loss, but on the downside, they might find themselves weighing the business sense of renewing your policy in the future.
How does my insurance company determine how much my motorcycle is worth?
Insurance companies simply use books such as N.A.D.A. Guides or the Kelley Blue Book. From your point of view, the issue is that “guides” might not give an accurate picture of the actual current value of your bike. The factors the books don’t take into account might trip you up when you file a claim. It’s not usually a problem if you have your coverage through a specialty motorcycle insurance company, but it might be if you rolled your policy into your auto insurance, for example.
Claims adjusters usually consider the “book value” (as well as the actual market value) of your bike when determining the true market value of your motorcycle. They’ll review online and classified listings to determine the current selling price for bikes like yours, and a good adjuster will try to find four or five examples of bikes like yours near your area to provide them with a complete picture of what people in your area are paying for similar models.
What’s a “motorcycle accessory” and do I need special coverage for all of them?
Accessories are anything you added to your bike not included by the original manufacturer. Getting the actual value for them in the event of a loss is one of the most common points of contention policyholders have when they file an insurance claim. Insufficient accessory coverage, particularly when you’ve underestimated the value of your bike’s accessories, will leave you hanging to replace them out of your own pocket.
Again, an “accessory” is any part or improvement not included as standard or basic by the manufacturer of the bike in question. That list might include items like custom chrome, saddle bags, windshields or fairings, communications systems, lights, custom paint jobs and even your riding gear and helmet.
Don’t forget to mention them when you buy your policy. Your bike’s value – and how much coverage you have in total – only covers your bone “stock” bike unless you specify otherwise. Coverage for accessories is always a separate part of your policy with its own limits, so be sure to take a complete inventory of the accessories on your bike when you decide how much accessory coverage you’re going to need. Your insurance carrier will help you out with this, but you have to let them know what their dealing with…
What is a “liability” policy and what does it cover in the event of an accident?
Technically, the definition of liability insurance is, “A type of insurance which covers losses resulting from bodily injury to others or damage to the property of others for which you are legally liable and to which the coverage applies.”
That’s a mouthful, but it basically means liability insurance is there to help you pay for damage – either bodily or to property – that you do to others while riding your bike in the event of an accident.
It does not, and this is important as liability coverage is generally all you’re required to buy in most states, cover your bike or your injuries, and those are both kind of a big deal.