Types of Motorcycle Insurance Coverage
Similar to automobiles, there are a few different types of
motorcycle insurance coverage available. Some of the types of
coverage are required by law, and some that you have to
determine if you think you need. As stated before, insurance is
statistics and odds. You may not think you need a certain type
of coverage to save money. And you may never use that coverage.
But if just one incident happens that you do not have protection
by a certain type of coverage, it can cost you big time.
Bodily Injury/Property Damage Liability Insurance
Bodily injury liability is another type of motorcycle insurance
coverage that you are required by law to carry in most states.
Legal minimum in many states is as little as $10,000 per person,
per accident. Your coverage pays for injury to others when the
accident is your fault. Most insurance experts recommend that
you purchase as much as three times the minimum in this day of
litigation and lawsuits.
If you are legally liable for an accident, your insurance will
pay for the following:
1. The cost to repair or replace damaged property
2. Medical bills incurred by injured parties (may include
coverage for guest passengers)
3. Lost wages of injured parties
4. Other damages you are legally obligated to pay as a result of
an accident.
If you are involved in a motorcycle accident and the other
driver is at fault, then the other driver's property damage
liability coverage pays for your motorcycle damage. Property
damage liability insurance is required by law, but the legal
minimum amount for this coverage in some states is only $5,000
per accident. So, if a driver with the $5,000 minimum totals out
your $15,000 bike, his insurance company will pay you only
$5,000. How will you get the other $10,000? If the other driver
files for bankruptcy, you end up with nothing.
Explanation of Bodily Injury and Property Damage Liability
limits:
If you select 15/30/10 limits, your liability coverage will pay
up to $15,000 per person and no more than $30,000 per accident
for Bodily Injury and up to $10,000 per accident for Property
Damage.
Guest Passenger Liability
This type of coverage provides protection for legal liability in
the event that a guest passenger is injured on the insured
motorcycle.
Underinsured/Uninsured Motorist
If you purchased underinsured property damage coverage, you may
be able to collect the other $10,000 to fix your bike. This
insurance is used to "fill the gap" between the actual amount of
damages and what the other driver's insurance paid, but only if
the other driver caused the accident and only if you purchased
limits high enough to cover all of the remaining damage. In
other words, if the legal minimum requirement in your state is
$5,000 for property damage liability, and you drive a $15,000
bike, you should have at least $10,000 limits on you
underinsured property damage.
Underinsured motorist coverage picks up where the other driver's
insurance runs out. This type of insurance is very important. If
you are injured in a motorcycle accident, break you leg, spend a
week in the hospital and are off work for six months and
experience a great deal of pain and suffering. You need coverage
high enough to pay for your damages. The other driver only has a
minimum policy of insurance (i.e.) $15,000. You will be left
holding the bag. It is common that the injured persons medical
expenses and wage losses are higher than the other persons
insurance. Also nothing is left for pain and suffering or
permanent disability.
Therefore, you need underinsured motorist coverage to pick up
the difference. This type of coverage is strongly recommended
because of its importance. It is suggested that you carry a
minimum of 100/300 coverage (100 per person/300 per accident)
this will also protect your passenger.
Uninsured motorist coverage is the most important insurance you
can buy. In many metropolitan areas the other drivers are
uninsured. These uninsured drivers can make up as high as 40% of
the drivers on the road! As you know, the motorcycle driver is
not at fault in most accidents. Therefore, you have a high
probability of being hit and injured by a driver who has no
insurance. The only way you can protect yourself is to purchase
uninsured motorist coverage. Uninsured motorist coverage pays
for medical expenses, property damage, and pain and suffering
(however, there are limitations in no-fault states). I strongly
recommend that you purchase this insurance and do not drive
without it. Many riders mistakenly believe uninsured motorist
coverage pays only for medical bills, and that they do not need
it because they carry health insurance. WRONG!-- it pays for
medical expenses, as well as loss of earnings, and pain and
suffering.
It is a good idea to talk to your agent, or talk to several
agents, to determine the best coverage that will provide the
most protection against loss. You need to remember that
different insurance companies have different exclusions to their
insurance policies. The most common for motorcycle policies is
the passenger exclusion, which means that your insurance company
will not pay for injuries to, your passenger under your bodily
injury liability coverage if you were at fault. There are other
types of exclusions that, unless you ask, you may never know
about until it is too late. Therefore, the most important thing
you can do is to fully understand you entire coverage.
In a nutshell: Underinsured coverage is coverage that protects
you if the person who hit you does not have enough insurance to
cover all of your damages.
Uninsured coverage is coverage that protects you if the person
who hit you does not have any insurance at all. This type of
coverage covers your medical bills and any lost income you would
incur while you are out of action.
NOTE: This coverage can be argued to be the most important
coverage for a motorcycle rider and passenger. This is the only
type of coverage that you can purchase that protects you. Most
motorcycle insurance protects someone else or someone's
property, or your bike for damage. This is the coverage you
collect from if you are injured by, a person who has no
insurance or a person who does not carry enough bodily iniury
(BI) to cover your claim. This coverage can pay your medical
bills, lost wages, pain and suffering, and even future damages.
What to buy: as much as you can afford. Riding without this
coverage is about as dumb as riding without a helmet, in a
bathing suit, with no shoes.
Collision/Comprehensive Coverage
Comprehensive and Collision coverage covers the cost to repair
or replace your motorcycle if it is stolen or damaged in an
accident, regardless of who is at fault. You select a deductible
for each coverage, and once the deductible is met, the insurance
company pays for the remaining damage. The higher the deductible
the lower the premium. Hint: On smaller bikes the difference
between deductibles is not as great as on larger more expensive
models.
Collision coverage will pay for damages to your bike, less your
deductible. This coverage applies without regard to fault. Even
if the damage is your fault the coverage will apply. You also
can use this coverage when you have been hit by another person
and they are at fault. Note: Coverage extends only to the
factory parts of your bike. If you get fancy and add anything
extra--like nifty chrome accessories - additional coverage will
be required for compensation.
Comprehensive coverage will pay for theft, fire and vandalism.
This coverage is subject to a deductible.
The time to find out about coverage and exclusions on any
policies is before you buy it. Before you sign anything, ask
your insurance agent if there are any exclusions or notice
requirements in the policy. Always ask to have all exclusions
and notice requirements explained to you before you buy any
insurance.
Medical Payments
Medical Payments coverage pays the cost of necessary medical
care you receive as a result of a motorcycle accident and can be
used regardless of who is at fault. The coverage often is
limited to medical treatment received within the first three
years after an accident and is limited to a specific dollar
amount. In some states, Medical Payments only applies after
other medical insurance is exhausted.
Very few motorcycle riders buy this insurance. My guess is that
they have great hospital coverage from their employer or
purchased their own coverage and feel that this is a duplication
of coverage. If you do not have hospital insurance buy as much
of this coverage as you can afford.
Hint: If you do not have hospital insurance and are injured in
an accident that is your fault this is the only coverage you
will collect on for your medical expenses. If you carry your own
medical and have a deductible or co-pay plan you need this
coverage to fill in the gaps. Limits of $500.00 to $10,000.00
are available, a small deductible may apply varies by company.
Custom Parts and Equipment (CPE)
When Physical Damage Liability coverage is purchased, $1,000 of
Custom Parts and Equipment (CPE) coverage is included.
Additional CPE coverage can be purchased to cover equipment, up
to $30,000 in value.
CPE covers equipment, devices, accessories, enhancements and
changes, other than those that the manufacturer originally
installs, that alter the appearance or performance of the
motorcycle or ATV. This includes, but is not limited to:
Any electronic equipment, antennas and other devices used
exclusively to send or receive audio, visual or data signals or
play back recorded media, other than those that the manufacturer
originally installs, that are permanently installed on the
motorcycle using bolts or brackets, including slide-out brackets
Sidecars
Trailers designed to be pulled behind a motorcycle or ATV
Trike conversion kits
Custom paint, custom plating or custom exhaust
Mower blades, plow blades or winches
Safety riding apparel, including helmets. (Coverage is provided
in the event of a Collision loss. Theft is not covered.)
Note: You should retain photos of the motorcycle and all
receipts for custom parts.
Roadside Assistance
Roadside Assistance coverage provides towing to the nearest
qualified repair facility and necessary labor at the place of
disablement when your motorcycle is disabled due to any of the
following:
Mechanical or electrical breakdown
Dead battery
Flat tire
Lockout
Insufficient supply of fuel, oil, water or other fluids
Entrapment in snow, mud, water or sand within 100 feet of the
roadway
Roadside Assistance is available 24 hours a day, 7 days a week.