Join Date: May 2010
Location: Saint Charles, IL
Rep Power: 1
My two cents worth
I was reading thru the comments on this discussion thread and thought I would throw in my two cents worth. I do happen to know a bit about this topic as I own an Allstate insurance agency west of Chicago. In addition, I am also the Founder & President of the Rescue Riders and a writer for several motorcycle magazines.
Let me start by saying my comments here are not a sales pitch but rather my attempt to help fellow bikers better understand motorcycle insurance. From the comments I read here, we seem to be comparing apples to oranges. To help us all compare policies I think it may help to explain the mechanics of a motorcycle policy. Below is an article I wrote for Saddle Tramp & Thunder Roads magazines. I hope this helps.
Welcome back to the Bull Pen. It sure is great to see the warm weather return and all of my fellow bikers enjoying some overdue two wheel therapy. I recently picked up Betty (2009 Street Glide) from the shop after a lengthy repair. Unfortunately, I was hit by a suburban assault vehicle (Mini Van) in December while returning from the Chicagoland Toys for Tots run. Both Betty and I are glad to be on the road again.
Many of you know I am an insurance agent and frequently ask insurance related questions so I thought I would share some important information about your motorcycle insurance. Your motorcycle insurance is like a parachute. You don't really appreciate it until you need it. I hope you read on and understand how your policy can protect you, your family and your property.
Are you ready? Well then, let's get started. As consumers, we have been conditioned to compare insurance based upon price. If you have seen the Progressive Insurance television commercials Flo tells us all how you can save money. Let me say that even though I think Flo is a "hottie" I want you to focus on your individual needs first and then look at the price. Let me break down some of the key components in your policy.
Bodily Injury/Liability: This is the portion of your policy that protects your liability when you cause harm to another individual. If you are in an accident and it's your fault, you are protected up to the limits of your policy. Quite often I talk to bikers who have $20,000/$40,000 of liability protection. This means if you harm another person, your policy will pay up to $20,000 per person and $40,000 per accident on your behalf to the injured person or persons. A few years back I was hit head on by a minivan which left 60 staples in my head, broke my collar bone and all of the ribs on my right side. My medical bill was $14,000 and I did not stay in the hospital overnight. I share this with you to demonstrate how quickly your liability can add up.
Uninsured/Underinsured Liability: Many folks ask me what this is. In a nutshell, this is coverage for you. Unfortunately Illinois only requires motorists to carry a minimum of $20,000 of liability coverage. Some states do not require motorists to carry any liability insurance. If someone injures you and they do not have insurance or sufficient insurance coverage to pay for your damages, your Uninsured/Underinsured coverage can pick up the slack. This is one of the most important elements of your policy and very often overlooked.
Property Damage: This is the protection you have if you damage other folk's property. Most of you carry $50,000 of property damage on your policies. What this means is that if you cause an accident and a BMW hits a Corvette, all you have to repair or replace their vehicles is $50,000. Don't get caught in this trap. All motorcyclists need at least $100,000 of property damage. The good news here is that it typically costs less than $20 years to upgrade from $50,000 to $100,000 so don't delay. I often hear the objection, how much damage can my bike cause to another vehicle. You don't even need to make contact with another vehicle to be at fault. If you are ticketed and two vehicles collide you are responsible to repair or replace their vehicles. I have personally seen $100,000 property damage claims where the bike was not damaged but the operator was found to be at fault. Don't let this happen to you.
Guest Liability: Do you ever take passengers for rides? If you do you should have Guest Liability Coverage. These levels are typically consistent with your Bodily Injury and Underinsured/Uninsured coverage. This component of your policy covers your liability when carrying a passenger. In other words, if you are in an accident and your passenger is injured, you could be sued for damages. If your policy provides this coverage you are protected up to the limits of your policy. Now for the scary part. Many motorcycle policies do not provide this coverage. If you don't have this on your policy, ride solo.
Collision: This is the component of your policy that pays to replace or repair your scooter. You choose the deductible that fits your budget and your motorcycle will be repaired or replaced up to the market value of your bike. Now if you are like me you have probably added some bling to your scooter along the way. What happens if your bike is wrecked? Read on.
Optional Equipment: If you are riding a stock bike skip to the next section. If you have upgraded your bike you need optional equipment coverage. Most insurance agents mess this part up. Here is how optional equipment coverage works. Let's say that you added a Mustang seat ($650) Bassani Exhaust ($850) and Custom Wheels ($2000) and a Baker six speed transmissions ($2500). Your agent may tell you that you need $6000 of optional equipment coverage. Sorry to tell you this but if you took that advice you are paying too much. In calculating the correct dollar amount of Optional Equipment coverage you need we need to determine the difference between your upgrades and the original stock components. Let's assume your bike is damaged in an accident. You already have coverage to repair/replace your stock components less your deductible. If your policy will already pay for a stock exhaust ($350) and stock wheels ($1000) and stock transmission ($1450) all you need to do is cover the difference which in this case would be $3200. Many policies already include some coverage for Optional Equipment so if your policy covers $1000 of optional equipment already, add the $2200 and you are covered. If you have custom paint or engine upgrades you typically want to cover those at the full value of the upgrades.
Comprehensive: This component of your policy typically covers you for incidents that occur when you are not riding your scooter. There are a few exceptions to this but that's another topic in itself. If your scooter is vandalized, damaged by hail etc your comprehensive will pay to repair or replace your vehicle less your deductible.
Rider Protection: This is an Allstate exclusive. A few years ago the pointy heads at Allstate asked me to help them design a new motorcycle policy. My reaction was why are we offering what everybody offers? Let's reinvent motorcycle insurance. We did. Most motorcycle insurance companies offer much of the same "stuff". Up to now, none of the motorcycle insurance companies offered protection for the rider. Our new Rider Protection package will pay you if you are injured and cannot work as the result of an accident. The payments will continue as long as you are unable to return to work. In addition, we can also include $15,000 of life insurance if the worst happens. As bikers, we all like to think that we will never be in an accident or worse but having been in several myself, I can tell you this does happen more than we would like to think. Since this is a farily new offering in the marketplace, it is not available in every state yet.
So what do I recommend you should carry in terms of coverage? It really depends on your needs. Are you married? Do you have children? A mortgage? Your policy should fit your needs. Don't hope you are covered, know so.
I hope this helps you better understand the components of your motorcycle insurance policy. If you have additional questions please post them and I will help find answers for you. Until next time, enjoy the ride.
Dean "Bull" Akey