Ask the average motorcyclist to explain the inner workings of an engine or the relative merits of sport versus touring tires, and most of us can give a pretty good account of ourselves. But ask us to explain the details of our motorcycle insurance policies, and you’ll probably get a lot of stammering or blank stares.
We insure our motorcycles because most states require it as a condition for a license plate. We’d also like some financial backup in case we have a tip-over, crash, or the bike gets ripped off. But most of us don’t spend a lot of time shopping around for the best rates or reading the fine print in our policies. So, here’s a quick look at the kind of coverage the major insurance companies offer.
Liability -- Bodily Injury and Property Damage: This covers your legal liability for an accident where someone else is hurt or another’s property is damaged. You choose the upper limits of the coverage and pay accordingly. Your insurance company pays the medical bills and wage loss suffered by an injured person, the cost to replace or repair damaged property, and any other damages you are legally obligated to pay as the result of an accident.
Note that Bodily Injury may or may not apply to a passenger. Some companies break that out into a separate category of coverage, which you can accept or decline. If you’re a solo rider and never carry a passenger, you may be able to save a few dollars and forgo this coverage. A lot of riders mistakenly believe Bodily Injury coverage will take care of their own injuries. Not so.
Medical Payments: This is the coverage that takes care of your medical bills and is limited to a specific dollar amount. In some states, this coverage doesn’t kick in until any other medical insurance you have is exhausted. If you already have good health/medical coverage, you may choose to decline this option.
Comprehensive and Collision: This covers the cost of repairing or replacing your bike if it is damaged, regardless of who is at fault. Collision covers damage to your bike when you hit another vehicle or object. Comprehensive pays for damage from any source other than a collision, such as theft, vandalism, or fire.
You share in the cost by paying a deductible – the amount you must pay up front before the insurance kicks in and pays the rest. The lower the deductible, the higher the rate.
Custom Parts and Equipment: This takes up where Comprehensive and Collision leave off and covers items other than factory-standard equipment. Here, we’re talking about such items as saddlebags, custom paint, a custom exhaust system, chrome parts, headsets and intercom systems, a sidecar, trailer, and so on. Helmets and riding apparel are covered in varying degrees from company to company. While some of these items may be covered under your basic policy, standard coverage varies widely, so get the details. Again, you can get higher limits for a higher premium.
Uninsured or Underinsured Motorist: Uninsured Motorist coverage pays for medical bills, wage loss, and other damages that you would have received from the other person’s insurance company, had they been insured. Some companies break it down into Uninsured Motorist Bodily Injury coverage and Uninsured Motorist Property Damage coverage.
Underinsured Bodily Injury coverage is designed to cover the gap between the other driver’s liability limits and the liability limit for Underinsured Motorist Bodily Injury coverage you select. Again, the amount of coverage selected will affect the rate you pay.
What The Experts Have To Say
“Most consumers don’t know much about motorcycle insurance, and they don’t spend the time learning about it,” observed Ben Sheridan, general manager for motorcycle insurance with Progressive. “The price of motorcycle insurance really varies from company to company,” he said, “and it makes sense to talk to more than one insurance company and get more than one price.”
Sheridan suggests checking first with the company that insures your car. “But don’t stop there. Talk to companies that specialize in motorcycle insurance, too,” he said. “If your auto insurance company will insure a motorcycle, but they really don’t want to, that means they won’t have customized coverage and their adjusters don’t understand motorcycles,” said Sheridan.
What you’ll likely find, he said, is that your car insurance company only looks at a few factors in deciding what rate to charge – usually, basic things like your age and the engine displacement of your motorcycle. They may not make much distinction between a cruiser, a sport bike, a sport tourer, or a full-zoot touring machine as long as they all have similar displacement.
Peter Pelizza, chief operating officer for Dairyland Insurance, told me that specialty insurers like his company take a much closer look at bikes and riders. For instance, they have rates that reward safe riding and make the high-risk riders and machines pay accordingly. “If you need heart surgery, you go to a specialist. You don’t go to a G.P.,” Pelizza said.
He also explained that they constantly fine-tune rate structures to reflect what’s happening in the real world. For instance, Pelizza commented, between 5 and 6 percent of Dairyland’s Harley-Davidson claims involve “chain reaction” accidents – domino tipovers or riding group pile-ups – reflecting Harley riders’ penchant for traveling in tight groups. “It’s more prevalent than in any other class of bikes,” he said, and that’s the kind of data that goes into structuring rates and coverage for a Harley.
When doing your research, note that Markel and Progressive both offer on-line rate quotes at their web sites. This is a service we’re likely to see more of in the future.
Ask About DiscountsSpecialty insurers delve deeper into motorcycle statistics and actuarial data, than do companies that mainly insure homes and cars and don’t actively pursue motorcycle business. As a consequence, these main-line insurers often charge higher [motorcycle] rates and don’t offer discounts for special lower-risk classes of riders and bikes.
When you ask for a rate quote, be sure to ask what discounts the company offers. Many give discounts for passing the Motorcycle Safety Foundation’s rider course. Others offer discounts to MSF instructors, to riders with clean driving records, and even for cruisers and touring bikes (as opposed to, say, sport bikes). You also can save with some companies if you have an audible anti-theft alarm on your bike.
Affiliation with certain clubs or associations also may entitle you to added benefits. Dairyland, for instance, offers a 10 percent discount for members of certain clubs, including the American Motorcyclist Association, BMW Motorcycle Owners of America, Christian Motorcyclist Association, Gold Wing Road Riders’ Association, Harley Owners’ Group and Women On Wheels. “Some companies use discounts as a marketing tool because people like to buy things on sale,” said Pelizza. “But realistically, our discounts are warranted based on data on the rider and the motorcycle.”
At least one company, Cycle-GARD, will give you a discount for having a current insurance policy somewhere else. Rick Filipponi, sales supervisor for Cycle-GARD, the motorcycle division of GEICO, said coming to Cycle-GARD having already had insurance elsewhere is evidence that the rider is a conscientious, responsible person.
GEICO took some heat several years ago when the company refused to insure drivers or riders who used radar detectors. “We don’t ask that question any longer,” Filipponi said, conceding, “We were a bit more conservative then.” Noting that radar detectors are illegal in GEICO’s home state of Virginia, Filipponi advised, “Don’t expect us to cover a radar detector if it’s stolen.”
Sheridan noted that most riders under-insure their accessories. “A company like Progressive will cover the first $1,000 of your custom parts and equipment as part of your premium,” he said. “Beyond that, you have to tell us if you’ve got another $2,000-$3,000 worth of accessories. We find very few folks are doing that. Some say, ‘That’s just me playing around,’ and don’t want to pay for the extra insurance. They need to think about covering what they have and getting a price for it.”
Filipponi said Cycle-GARD will cover up to $500 in accessories under their basic rates. While Pelizza reported Dairyland’s primary program covers $3,000 worth of special (non-OEM equipment), including protective riding suits and helmets.
Some companies recognize there are riders in northern states who winterize their bikes and don’t ride during the cold weather months. They offer lower rates that take into account his abbreviated riding year and lower exposure to risk. If you put your bike up for the winter, call your insurance agent and ask about suspending part of your usual coverage until spring. Often, such a change can be made the same day for an immediate savings.
Bob Pearl, product manager with Northland, said his company structures its “snow belt” rates on the presumption of a 10-month riding season, rather than offering a “lay-up” program.
“We factor that (down-time) into our rate calculation and we base the rate on ten months, but carry other two months for free,” he said, adding this make it possible to enjoy a rate that recognizes your latitude, but accommodates the urge to go for a ride on that rare warm day in January.]
Note that companies occasionally may check your driving/riding record if they have reason to believe you’re a high-risk customer. “We will, in some cases, pull a motor vehicle report to verify a driving record,” Sheridan said. “We’ll do that after the insurance policy has already been started. If there is a change, then the price of the insurance will chance.”
“There are some situations where a single speeding ticket can change the rate. In other cases, it will take two to change it.” Riders with bad driving records will, of course, end up paying higher rates. He added, “Some companies will look at your driving record and cancel you, but we don’t. Our philosophy is to minimize the number of cancellations.”
Of the insurance experts interviewed, all agree it’s important to choose an insurance company that’s financially secure. You also should look for one that offers claim service outside of normal business hours and on weekends and holidays.
And, in case you’re wondering, Pelizza and Pearl were the only insurance exec I spoke with who ride. Pelizza has a ’97 Harley-Davidson Softail in his garage with 14,000 miles on the meter and Pearl is a dedicated dirt rider who hopes to get his two teenagers into the sport this year.
Sources
Here are some of the major insurance companies that offer specialty coverage for motorcyclists.
Dairyland
800/DAIRYLAND
www.dairyland-ins.com
GEICO
800/442-9253
www.geico.com
Markel Insurance Co.
800/236-BIKE
www.bike-line.com
Progressive
888/438-0867
motorcycle.progressive.com
Northland
800/237-9334
www.northlandins.com
This story was published about 10 years ago, so some of the company-specific information may have changed, but the concepts haven't.
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