Hidden Costs Associated With Motorcycle Insurance

There is hidden motorcycle insurance cost that every cyclist should be aware of.  Understanding the costs associated with motorcycle insurance and only paying for the coverage that you need should help you obtain the best policy and save money.

Motorcycle rates vary depending on the requirements for coverage. The cost of a premium cam is significantly higher, depending on the type of motorcycle. Small and mid-size bikes that are mainly used by commuters in urban settings can have a premium of $200. The premium for a high powered, performance rocket cycle can cost $1,000.

Collision and Comprehensive Coverage

Up to two-thirds of a motorcycle insurance premium is related to collision and comprehensive coverage. This coverage helps to repair or replace a motorcycle that is involved in an accident.  It may be possible to avoid this coverage and opt for liability-only protection instead, thus bringing your insurance costs down significantly.  Be sure to check however with your finance company to make sure that it is okay to drop the collision and comprehensive coverage from your motorcycle insurance policy.

Med Pay

Medical coverage or Med Pay is a hidden cost that may not be necessary for most motorcycle owner.  For most of us who have some form of health insurance coverage that is employer-based, Med Pay coverage would be subordinate or secondary to that coverage. You will be paying twice for coverage that you already have in place through work.

Guest Passenger Protection

If you do not make it a regular habit of carrying passengers on your motorcycle, the need for “guest passenger” coverage may not be important.  The exception to this is where it is required coverage mandated under the laws of your state.  If it is not required, you can save yourself some money by opting out of having this coverage on your motorcycle insurance policy.

High Deductible

The higher the deductible that you are willing to take on, the lower the cost of your motorcycle insurance premiums.  Low deductibles may be necessary if you need the full protection afforded by your insurance in the event that the motorcycle is damaged to stolen.  If however you can self-insure a portion of the risk associated with owning a motorcycle, you should carry a higher deductible.

Group Discounts

Sometimes motorcycle insurance companies do not tell you that being a member of a recognized group may lower your premium costs. Allstate Insurance Company, for instance, allows individual riders who are members of the American Motorcycle Association, BMW Motorcycle Owners of America and Harley Owners Group (HOG) among others to enjoy group rates discounts. This membership discount can translate into some real savings for you as a motorcycle owner and help you enjoy more protections on your motorcycle insurance.

Financial Risk Assessment

Your credit rating and financial ability are evaluated during the underwriting process to determine your motorcycle insurance rate. You should be aware that people who pay their bills on a timely basis and have good credit scores are more likely to receive the best rates than those who do not. This financial risk assessment is important to understand since it can also add to the cost of your motorcycle insurance.

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