What You Need to Know About Motorcycle Insurance

Summer is here and so is the excitement of spending more time outdoors. Say you have purchased a new motorcycle, you’re ready to hit the road and enjoy the sunshine…now what?

Think the motorcycle is covered under your homeowner’s package and you’re good to go? Not so fast!

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The Basics

Just like most types of Insurance, motorcycle insurance is insurance that you purchase specifically to cover for liability and physical damages to your motorcycle in an event of a loss.

Coverages to consider for your motorcycle are as follows:

• Third-Party Liability: To operate a motorcycle, it is required by law that you have third party liability coverage. Third-party liability covers the other party.
  If you get into an accident that is your fault and you cause damages, injuries or death to the other person, it covers up to the limit of the insurance you purchased. The most common limit is $1 million. This also covers legal fees in the event that you get sued by the other party.

  An example of where third-party liability comes into play would be if you were involved in a motorcycle accident and caused damages to the other person’s motorcycle, your third-party liability will cover those damages.

• Accident Benefits: The accident benefit provides compensation to family members in the event that you are killed in an accident. It also covers medical expenses if you are injured and require medical attention.
• Family Protection: Also referred to as underinsured or uninsured motorist coverage, family protection provides coverage in a situation where you are involved in an accident that is not your fault but the at-fault party has no insurance (or is underinsured) and you or your eligible family members are injured or killed.
  It provides coverage up to the same limit as your third party liability, so, if your liability limit is $2 million, family protection will provide coverage up to $2 million.

In most cases, third-party liability, accident benefits and family protection coverage are purchased together. Although only third-party liability and accident benefits are mandatory in most provinces across Canada and required by law in order to operate a motorcycle, (family protection is sometimes optional,) most insurance companies recommend that all three be purchased together.

Additional Coverage

Talk to your agent or broker if additional coverage should be added to your policy. Further coverage to consider includes:

• Collision or Upset Coverage: This coverage will pay for fixing or replacing your motorcycle if there are damages to your motorcycle caused by collision with another motorcycle or object; such as a pole or collision with an animal. This might also cover for a hit and run accident. Coverage will be subject to your policy deductible.
• Comprehensive Coverage: This provides coverage for losses as a result of fire, theft or vandalism. Comprehensive coverage is a great coverage for a motorcycle especially in terms of theft—because they are relatively easy to move, there is a higher chance of it being stolen. Comprehensive coverage also provides coverage subject to the policy deductible.
• All Perils: This provides protection for everything covered under collision and comprehensive. It is a good option to consider as it comes with only one deductible compared to having collision and comprehensive separate which requires separate deductibles.
• Specified Perils: This provides coverage for only those perils that are specifically listed as covered on your policy. For example, if your policy says your motorcycle will be covered for only theft, hailstorm or lightning, then only these will be covered.

At this point, you might be thinking, I now know all the coverages I could consider, it is all covered. Oh well, not so fast!

Read: The First Steps to Take After Wrecking Your Car

Save on Your Policy

A motorcycle license is required to operate a motorcycle, especially if you are looking for cheaper insurance. Just like auto insurance and every other type of insurance, there are factors that determine your premium. Below are some of the ways that could help you save on your motorcycle insurance:

• Ensure you have a clean record: By having a clean record, not getting into accidents or any other type of traffic violations, you could pay less than someone with multiple accidents or a bad record.
• Are you new to this? Take a motorcycle riding or safety course: Taking a course could save you some money.
• Get your motorcycle riding license: Not all insurance companies insure motorcycles and the ones that do, not all take riders without a license, having a motorcycle license could save you money on your motorcycle policy, compared to someone without a motorcycle license.
• Consider higher deductibles on your collision, comprehensive, all perils or specified perils coverage: having higher deductibles will save you money, compared to having lower deductibles.
• Consider a used or older motorcycle, instead of a new one: with a used or older motorcycle, you may have less worry about the motorcycle been stolen or damaged in a collision. Purchasing the most basic insurance required for you to ride (third party liability) may be a valid option in the case.
• Shop around to make sure you are getting the best price for the best coverage.

Key Thoughts

Do not forget these:

1. Your motorcycle insurance is not covered under your homeowner’s insurance—you require a separate policy for your motorcycle.
2. Canceling your motorcycle insurance during winter might not save you money—the majority of your motorcycle insurance premium is earned in the summer months, so if you decide to cancel in the winter, you might not be saving any money.
3. Not all insurance companies offer fire and theft coverage only on motorcycle policies. If you are considering reducing your coverage so that it only covers for fire and theft while your motorcycle is stored in the winter, make sure that your company offers this option.

   Some insurance companies still require you to keep at least your third party liability coverage on your motorcycle even while it is not in use in the winter months. It is best to keep your liability and comprehensive coverage in this type of situation, to ensure your motorcycle is covered in an event of fire or theft, since reducing coverage might not save you money.

Read: Best Insurance Options for Storing Your Motorcycle for the Winter

Now that you know what to do and are ready to hit the road, keep in mind that, most motorcycle accidents are fatal and could even lead to death, take all necessary safety measures, be safe on the road and enjoy the sunshine!