After you buy a motorcycle, you need to insure it. Most states require all vehicle operators—both standard drivers and motorcyclists—to carry minimum amounts of motor vehicle coverage. However, depending on your individual needs, your motorcycle insurance policy will need to contain unique coverage. Among those that should be unique to you are your policy limits and deductibles.
How much coverage do you need for your motorcycle? How can you manipulate your policy in ways that will optimize the benefits that it will provide you? What factors will influence the cost of your plan in the end? Let’s take a closer look.
Why Motorcycle Insurance Premiums Vary
You and your motorcycle combine to create a unique cost-risk profile for motorcycle insurance providers. This risk profile will differ from that of almost any other driver, and it is the leading factor that will determine the premium you will pay for your motorcycle insurance.
To your insurer, your risk profile represents your likelihood of filing a claim for compensation against your policy. If you have a greater risk of filing a claim, you have a greater risk of costing the insurer money. Therefore, they might have to raise your rates in order to continue to cover you.
Some of the factors that might influence the cost of your policy include:
- The make and model of your bike
- Your bike’s value
- Where you live
- Your driving record, including previous infractions
- How often you drive
- Accident and claims history on previous policies
- The policy you choose
- Credit scores
How Much Can You Expect to Pay for Coverage
On average, motorcycle insurance costs the average U.S. biker around $500 - $600 per year. However, precise premiums can very widely from biker to biker.
On one hand, your bike’s value will almost certainly influence your premiums. After all, the more value that is wrapped up in your vehicle, the more your insurer might have to pay for damage following an accident. Therefore, you will have to carry higher coverage limits in order to adequately cover this value.
The coverage limits within your plan will have a direct impact on your policy costs. However, they will also have a direct impact on how much money you can expect to receive from a claim on your coverage. Plus, multiple other factors besides your coverage limits will influence your premiums overall. Therefore, you shouldn’t let the prospect of lower prices limit you to buying only low levels of coverage.
All the same, you can manipulate the coverage limits within your plan to a beneficial degree, and your agent will be happy to help you do so.
Optimizing Your Coverage and Deductibles
On one hand, you will pay more money for higher levels of motorcycle insurance. However, you will get a better return on investment even though you pay more for it. It’s important to strike a balance between what you want to pay for coverage now, and how much you want to benefit from it later.
Here are just a few of the ways that higher levels of motorcycle coverage can be beneficial to you in the long run:
- You’ll likely have to carry minimum levels of liability insurance. It can help you pay for the damage you might cause others in a wreck that is your fault. While the smallest limits might prove comfortable, they might not prove adequate. If you have higher coverage, you’ll have a better likelihood of covering a liability claim in full.
- Add collision or comprehensive coverage to your policy. It can pay for physical damage to your bike. The collision protection will pay for wreck damage. Comprehensive coverage will pay for damage from accidents like weather or theft. Most policies will pay either for the replacement cost of the bike or for the bike’s cash value. Cash value coverage is less expensive, but it might only pay you the depreciated value of a bike following a totaling.
- Consider purchasing gap coverage when you buy a new bike. It pays the difference between a bike's value and the value of an existing vehicle loan.
Additionally, you are likely to see that certain parts of your policy, namely your collision & comprehensive coverage, contain policy deductibles. The deductible is a dollar value—usually $500 - $1,000—that you agree to pay towards a claim cost on your own.
If a claim falls below the deductible value, then your policy won’t pay at all. So, if you have $500 worth of damage and a $1,000 deductible, then your plan won’t pay. But, if you have $3,000 worth of bike damage, then your policy pays for $2,000 worth of repairs, while your deductible obligates you to pay the remaining $1,000.
You will often find that you pay a lower price for your motorcycle policy if you carry a higher deductible. That’s because having a higher deductible obligates you to pay for more of a damage claim yourself (instead of your insurer). However, you shouldn’t choose such a high deductible that you couldn’t afford to pay for that portion of a claim on your own.
With attention to detail, you can make your motorcycle insurance costs more affordable. Don’t sacrifice coverage for more affordable costs. Talk to your insurance agent about the best way to balance your policy costs with savings.