Motorcycle Insurance: Covering Your Two-Wheeler and Yourself

The percentage of U.S. households with at least one motorcycle grew to 6.8% in 2009. There are now more than 11 million bikes on the road.¹ Some bikers have a passion for touring the back roads, while others seek the thrills of an off-road race. More than a few riders simply rely on their motorcycles to get where they need to go.

Due to high gas prices, low-powered scooters are gaining popularity recently as an alternative form of transportation. Scooter sales jumped nearly 50% during the first quarter of 2011, and sales of fuel-efficient, dual-purpose motorcycles (built for on- and off-highway use) were up almost 25%.²

Here’s a look at some safety and insurance issues associated with motorcycle riding, and how to help protect yourself both physically and financially while you hang on to the handlebars.

Safer Cruising

Motorcycles are much more commonplace on the road today — and mild weather typically makes the fall a fun time to ride. Because motorcycles are obviously less crashworthy than closed vehicles, there are some important safety issues to keep in mind.

• Always wear a helmet, regardless of whether the law in your state requires it. The National Highway Traffic Safety Administration reported that 1,483 lives were saved by helmet use in 2009, and 732 more could have been saved if riders had been wearing them. It is estimated that helmets are 37% effective in preventing fatal injuries for motorcycle operators and 41% for passengers.³ Consider wearing other types of protective gear, including suits or jackets, face shields, goggles, gloves, and boots.
• Avoid reckless riding. Dangerous behavior by motorcycle operators, including drunk driving and speeding, contributes to the majority of fatal crashes.⁴
• Opt for anti-lock brakes. Motorcycles have brakes at both the front and rear wheels, so stopping hard can lock the wheels and cause the bike to flip. A 2010 study conducted by the Insurance Institute for Highway Safety showed that motorcycles equipped with anti-lock brakes (often an optional feature) were involved in 37% fewer fatal crashes than those without anti-lock brakes.⁵
• Learn to ride well. A motorcycle training course could help strengthen your skills.

How Insurance Works

Most states have specific minimum liability coverage requirements similar to those of automobiles, but you may also purchase additional coverage to protect your investment and for specific cases.

Liability insurance pays for injuries and property damage, up to the policy limits, that you may cause to others in the event of an accident. Guest passenger liability may not be included, so you might have to purchase it separately. Liability coverage does not cover damage to your own vehicle.

Collision coverage pays for damage to your bike, minus your deductible and up to your policy limits, if you are involved in a wreck with another vehicle or a stationary object, whereas comprehensive insurance adds coverage for damage from events other than collisions, such as fire or theft. In both cases, standard insurance will cover only the factory parts on your motorcycle. If you have special upgrades or accessories such as a side car, chrome parts, or a custom paint job, you may want to obtain additional coverage for optional equipment.

Insurance premiums are affected by where you live, where you store your bike, the type of motorcycle you own, how much you ride, and your driving record. Sport models that are built for speed often cost more to insure than cruisers. If you ride only during certain months, you may be able to save money with a lay-up policy that suspends all coverage except comprehensive in the off-season. You may also receive a discount if you take an approved training course.

Growing popularity means that motorcycle insurance is now widely available as a separate policy or as a rider (endorsement) to your auto policy. We can help you determine the type and amount of coverage to address your personal situation and lifestyle.

1–2) Motorcycle Industry Council, 2011
3–5) Insurance Information Institute, 2011

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2011 Emerald Connect, Inc.