Fiction: Motorcycle insurance is an option.

Truth: The Law requires bikers to have motorcycle insurance. (Except Florida, Montana and Washington). It’s mandatory in most states.

Fiction: Auto insurance covers motorcycles.

Truth: Auto insurance does not include motorcycles. This is a separate coverage.

Were you aware of the facts above? Most bikers aren’t and sometimes they are caught by surprise if they are charged with a hefty ticket for riding their motorcycle without insurance.

Don’t wait for an accident to realize the details of your insurance coverage.

LIABILITY COVERAGE

If ever you’d be blamed for an accident, it is the liability insurance that will help pay for the damages you caused to people or property. Different states vary in the required minimum amount for liability insurance.

However, you need to buy as much as you can “reasonably” afford.

For example, your insurance policy includes a liability coverage of only $15,000 but you cause a person to spend $100,000 in medical expenses and pain and suffering. Then you would be responsible to pay the remaining amount of $85,000 from your own pocket.

Don’t get confused with the numbers when looking at the liability coverage in your insurance policy. It is usually stated in terms like “50/100/5” or “15/30/5”.

The first set of numbers represents the amount paid out to an individual who sues you.

The middle set of numbers represents the total maximum to be paid out no matter how many people sue you.

The last set of numbers represents the property damage liability maximum pay out for one accident.

So in “50/100/5” policy, your insurance will pay a maximum of 50,000 to one person you’ve hurt. If five people were hurt, your policy can pay each person $20,000 each. $5,000 will be paid for any damages to their car or any belonging damaged during the accident.

COLLISION COVERAGE

No matter who is at fault in an accident, collision insurance will cover the cost of repairing your bike. If another person is responsible, your insurance company may pay for the repair and go after the insurance of the other person.

In some occasions, there is the “deductible”. This amount is your share of responsibility in the repair expenses. If for example you have a deductible of $500, then your insurance will pay the remaining expenses beyond $500. If it costs $2,000 to have your bike repaired, your insurance will cover only $1,500 and you have to pay $500, the amount of your deductible.

We recommend having a deductable as this will greatly reduce your insurance premium.

COMPREHENSIVE COVERAGE

Comprehensive insurance is designed to cover the replacement cost of your motorcycle. In case you had your bike financed by a bank or financing company, the comprehensive coverage will cover your motorcycle cost but not the total amount you owe from the bank.

You may want to seriously consider getting “gap insurance” to cover the difference in the amount of comprehensive coverage and the amount loaned for financing.

Depending on your financial situation, it’s something to consider. Gap insurance is usually quite inexpensive.

If your bike wasn’t financed, then you wouldn’t need Gap coverage.

GAP INSURANCE: THE DIFFERENCE BETWEEN WHAT YOUR INSURANCE COMPANY WILL PAY TO COVER THE VALUE OF YOUR BIKE VS THE ACTUAL MONEY OWED TO YOUR FINANCING COMPANY OR BANK.

Uninsured and Underinsured Coverage

Most often, accidents are caused by someone else and they should be paying you for the damages. However, they may not be personally capable or not have enough insurance to pay you everything that needs to be paid. Or worse, they don’t have any insurance at all. In such circumstances, Underinsured or uninsured coverage will cover your expenses for bodily injury and property damage.

We highly recommend having uninsured coverage. There are too many irresponsible drivers without the proper insurance coverage.

Be careful with the term “maximum coverage”. Sometimes, “maximum” may not be much. Ask your insurance agent to explain to you exactly what is covered by your policy.

To sum things up, consider the reality of your riding habit and history. Buy as much insurance as you can afford (within reason). Get Gap insurance if you financed your bike. And always opt for a deductable to reduce your premium.

… and of course.. shop around and get multiple quotes from major carriers...

In final remember this… the best insurance is having the right gear on. That means, wearing a DOT or SNELL approved helmet, wearing good safety gloves, jackets and driving with awareness on the road…

The best insurance is to minimize getting into an accident in the first place.