Do you know how your motorcycle insurance really works? As a bike owner, you want to be familiar with your motorcycle insurance costs. It’s not uncommon for motorcyclists to raise their deductible to save on their monthly premiums. But you want to ensure that you choose the right motorcycle insurance deductible and premium cost, so you aren’t left in a financial jam in the case of an accident.
We’ll go through the specifics of choosing a motorcycle deductible, how this applies to your coverage, and other ways you can save money on your insurance aside from the deductible-premium ratio.
What is a motorcycle insurance deductible?
A deductible is the cost you pay out of pocket to repair or replace your bike if you make an insurance claim. Insurance companies make you pay a deductible so you have some responsibility for damages to your bike. This also helps minimize the risk of insurance fraud.
The most common deductibles are $500 or $1,000. Let’s say you have a $500 deductible and you get into an accident worth $2,000 in damages. You would pay the first $500 as your deductible to fix the bike, and your insurer would cover the remaining $1,500 (up to your coverage limits). If you had a $1,000 deductible, your insurer would only pay the other $1,000.
There is a premium-deductible ratio when it comes to cost. In general, a higher deductible means a lower premium. So, the higher your deductible, the less you’ll pay monthly or annually—but you’ll have to pay more out of pocket in the case of an accident.
What are the types of coverage that apply to a deductible?
There are two main “areas” of motorcycle coverage: liability and collision/comprehensive. The deductible only applies to the second form of coverage—the cost of paying for your own bike.
Liability – No deductible
Liability covers another party’s damages if you are found at-fault. There are usually liability requirements in each state. Bodily injury liability covers their medical expenses and injury damages, while property damage liability covers any costs to repair or replace their motorcycle, car, or other property. Some insurance companies offer Guest Passenger liability, which specifies liability to a passenger on your motorcycle.
Liability coverage does not cover damage to you or your motorcycle. That means the deductible does not apply here. You are not responsible for first paying a deductible out of pocket in a liability case.
You would only be responsible to pay if the expenses exceed your liability coverage. For example, your bodily injury liability insurance policy covers $30,000. You are found at-fault in an accident, and the other party’s medical expenses and lost wages equate to $42,000. Your insurer would pay for $30,000, and you would have to pay the remaining $12,000 that exceeds your limits.
Collision/comprehensive – Deductible
Collision and comprehensive insurance will pay for covered damages to you and your bike regardless of who is at fault. Collision insurance refers to damages to your bike from a collision with another bike, car, or stationary object. Comprehensive insurance pays for damages other than collision, like fire, theft, vandalism, weather damage, and “acts of God.”
This is where your deductible comes into play. If you submit a claim to pay for your bike, you will have to pay your deductible out of pocket before the insurer steps in.
Some insurers will require you get separate coverage for customized motorcycle parts, like chrome parts, custom paint jobs, or trailers and sidecars. A lot of insurers will only cover the standard parts of your motorcycle. This additional coverage may also apply to your deductible as well.
You may also get uninsured/underinsured motorist coverage, which pays for damages to you and your property if the at-fault driver doesn’t have adequate insurance. Your deductible may apply here as well when paying for the cost of your own bike.
How do I decide my motorcycle deductible?
You don’t necessarily want a high deductible just to have a lower premium. You want to ensure that you would be able to pay for your deductible out of pocket in the case of an incident.
Typically, the cost of comprehensive and collision insurance tracks closely with the value of the motorcycle itself. So it will depend on the type of bike, the age of the motorcycle, and the number of miles you ride in a year. How and where you store your bike may also determine your comprehensive insurance risk. Your quote will also take into account your age, driving record, and where you live.
In order to determine your deductible, consider how much you could pay out of pocket right now in the case of an incident to repair your bike.
You may also want to do some calculations. Quote your insurance at both $500 and $1000 to see the difference in premiums. How long would you have to be on the road to make up the difference? For example, if a $1,000 deductible would save you $500 in two years, it might be worth it to go for the higher deductible. If you didn’t have an accident, you’d end up saving $500 in that time period—or it would at least recoup your money you’d have to pay on the deductible in the case of an incident.
An insurance agent can help advise you on determining whether a higher or lower deductible makes sense for your situation as well as how much raising your motorcycle insurance deductible would help you save. Give one of our insurance advisors a call at (844) 300-3294 today to
What are other ways to save on motorcycle insurance?
If you want to lower the cost of your motorcycle insurance without raising your deductible, here are some other ways to save:
- Take a motorcycle driving safety course, like a class at the Motorcycle Safety Foundation.
- Store your bike in a secure garage with an alarm.
- Minimize the amount of time you spend on the road.
- Consider multi-bike discounts if you have more than one motorcycle.
- Look into organization member discounts and mature rider discounts.
- Get a lay-up policy, which suspends all coverage except for comprehensive during winter months when you’re not using the bike. This still protects from natural disasters and theft, but it cuts insurance costs for those months.
Looking to save on your motorcycle insurance? We’ve got you covered. Call one of our insurance advisors at (844) 300-3294 now for expert advice on choosing a deductible and to compare quotes.
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