Motorcycle Insurance: 6 Ways to Save

 

Motorcycle riders are a breed apart from your typical car drivers, glad to feel the wind in their face and undeterred by the warnings from mom about the dangers you'll find lurking around every corner.  Sure, bike riding can be risky and a serious accident on two wheels can be much more devastating than when driving on four, surrounded by a steel cage with safety add-ons like airbags.  But for careful riders with proper safety gear, a registered motorcycle safety course under their belts and a healthy respect for the risks of the road, motorcycling can be a great way to go.

Ensuring You've Got Proper Insurance

One critical piece of your motorcycling protection is having the proper motorcycle insurance in place.  In North Carolina, every vehicle being driven on public roads is required to have at least a minimum amount of basic liability insurance in case you're the cause of an accident that injures or kills another person or causes damage to someone else's property.

While it won't save you money on the cost of your insurance, carrying more than the required minimum amount of liability coverage could save you a huge amount of money in the event that you're found responsible for causing an accident where someone dies or is seriously injured and you become the defendant  in a liability suit.  Judgements in these types of suits can run into the thousands, hundreds of thousands or even millions of dollars.  Your best protection is to carry five or ten times the required amount of bodily injury liability insurance.  You may also want to consider an umbrella policy for the best all-around liability protection.

Here are six ways to save on your motorcycle insurance:

1. Always shop around and get quotes from several insurers.  It doesn't make sense to pay higher rates charged by one company when another insurer provides the same service at a lower price.  
2. Older, smaller, slower bikes will have lower insurance costs.  Choose your bike wisely.
3. If you only ride occasionally, ask for an infrequent rider discount.  While you're at it, find out about every discount offered.  There may be several.
4. If your bike isn't worth too much, dropping your comprehensive and collision coverage will save bucks.  If your bike has a lienholder, however, this won't be possible.
5. Raise your deductible.
6. Keep your bike secure with chains, locks and/or alarms.  Keep it garaged when not being used.

Can You Ever Have Too Much Insurance?

 

If you've ever caught yourself thinking "I'm insurance poor," it's likely because you've been adding up all those policies you've managed to collect and all those premiums you continue to pay.  If you're like most people, you have life insurance, car insurance, health insurance, homeowners or renters insurance and maybe more.  The question is, can you ever have too much insurance?

Vehicle Insurance

In the state of North Carolina, anyone driving a vehicle on public roads is required by law to have at least a minimum amount of liability insurance.  This is third-party liability coverage to help pay for financial losses suffered by others in an accident you cause.  Losses may be the result of property damage, bodily injury or death.  In NC, the minimum liability coverage required is:

• $30,000 per person per accident bodily injury
• $60,000 per accident bodily injury coverage for all persons
• $25,000 per accident property damage

How Much is Enough

Many experts recommend you increase your liability limits three to five times the minimums (or more).  The amount you carry should depend upon the number of assets you stand to lose if sued for liability.  Even more protection is available through the purchase of a high-value umbrella policy.  This is a relatively inexpensive way to significantly increase your asset protection.

Other car insurance options should depend on the value/condition of the insured vehicle.  If you're driving an older, beater car that you could easily replace, carrying collision and comprehensive coverage on it probably doesn't make sense.  The money you're spending on these coverages might be better applied to medical payments or uninsured driver's coverage.

Life Insurance

You buy life insurance to keep your dependents financially secure in case you die unexpectedly.  The death benefit should cover: 

• Your income
• Major debts
• Funeral expenses
• Future obligations such as your children's education

As you age, however, you likely don't need the coverage you once needed.  Your home mortgage may be paid off, the kids are grown and off on their own and your debts are what they once were.  In this case, you can lower your coverage to a more appropriate amount. 

Homeowners Insurance 

Your homeowners coverage should be enough to rebuild your home and replace your property should the home be totally destroyed.  This doesn't mean covering the market value of the home or the value of the land.  Umbrella coverage can extend your homeowners liability limit.

How to Know If You Are Underinsured

 

You buy insurance primarily for the purpose of protecting yourself and your family against certain losses from which you would otherwise be helpless to handle financially.  For example:

• Life insurance protects the financial future of the loved ones that depend on your income, so their standard of living can continue at a similar level in the event of your untimely death.
• Auto insurance protects you from losses associated with liability suits if you're held responsible for causing injury, death or property damage to a third-party with your vehicle.  You can also insure against damage or destruction to your vehicle, personal injuries and more.
• Homeowner's insurance provides a long list of protections for what is likely to be your most valuable asset, your home.  If your home is damages or destroyed as a result of any of the perils listed within you insurance policy, the insurer is responsible for helping you deal with the financial costs.

Life Insurance 

Since life insurance is meant to help replace your income should you die prematurely, you're underinsured if the death benefit of your policy falls short of taking care of such things as:

• The income your now provide
• Debts/financial liabilities your have incurred, including your home mortgage
• End of life expenses
• Higher education expenses for your children

Auto Insurance

Almost every state requires a minimum amount of liability coverage for every vehicle driven on public roads but these minimums are woefully inadequate.  In North Carolina, for example, you're required to have liability insurance of $30K per person (bodily injury),  $60K per accident (bodily injury) and $25K for damage to a third-party's property.

An accident for which you're held liable could incur costs many times these minimum amounts and any amount above your policy limits would fall directly to you for payment.  One serious accident could ruin you financially for life.  Unless your auto liability coverage is many times higher than the minimum required, you are underinsured.  For best coverage, look into purchasing an umbrella policy.

Homeowner's Insurance

The worst case scenario for the company insuring your home is if it becomes totally destroyed by something like a house fire or a tornado.  If your insurance policy would pay 90% or less of the cost to completely rebuild your home, you are underinsured.  This includes using the same or similar materials and replacing everything in your home.  Homeowner's coverage should be rechecked every year or two.

Does Umbrella Insurance Cover Dog Bites?

According to a 2017-2018 survey completed by the American Pet Products Association, about 68% of American families (85 million) own a pet, with dogs making up about 60.2 million of the total. Further, according to the Centers for Disease Control and Prevention (CDC), approximately 4.5 million people are bitten by dogs each year. More than half of these dog bite injuries actually happen at home, by dogs that are familiar to us. Children suffering dog bites are primarily in the age range of 5-9 years old.

Insurance Protection        

If you have homeowner's or renter's insurance, chances are good that you, your family and visitors to your home are covered by your policy for damages and legal liability costs related to a dog bite. Even outside of your home, if your dog gets loose or is in your car with the window down and bites someone, it should be covered by your homeowner's or renter's policy.

More dog bite statistics from the Insurance Information Institute (III):

• Insurance companies paid out liability claims in excess of $686 million dollars for dog bites in 2017
• The number of dog bite claims sought in 2017 totaled 18,522, up 2.2% (18,123) from the previous year
• The average dog bite claim paid out in 2017 was $37,051. This was a 90% increase from 2003, due to increasing medical costs and the size of jury awards, settlements and judgments, which continue to trend upwards

Umbrella Insurance Coverage

Most homeowner's insurance policies have liability coverage limits of between $100,000 to $300,000, which is enough to adequately cover the average cost of a dog bite claim. There are, however, unique situations that can occur whereby a dog bite victim can suffer injuries that far eclipse the costs of a typical dog bite claim.

A serious dog attack, for example, could be so debilitating that it could cause a permanent, lifetime disability for the victim. Such a scenario could quickly use up your homeowner's insurance liability coverage limit. This would mean all additional costs beyond your limit would fall to you, which could mean total financial ruin. Unless, that is, you have an umbrella insurance policy in place.

Umbrella insurance works along with your basic insurance, both home and auto, and starts paying on liability claims as soon as your regular liability limits are met. This applies to any liability claim you may be facing, including dog bite claims.

How Does an Umbrella Policy Work?

Umbrella insurance is a type of liability coverage often misunderstood by many but incredibly important to understand in our current, highly litigious society. Consider this startling fact. It's estimated that there are more than 15 million lawsuits filed in the U.S. every year. This works out to an average of approximately 41,000 lawsuits per day, or about one lawsuit every two seconds.

Why So Many Suits?

More than half of the lawsuits filed each year in America are as the result of a liability claim stemming from damages related to a vehicle accident. And while every driver here in North Carolina is required by law to be covered by a minimum amount of liability insurance, these limits are woefully below the amounts typically awarded as judgments in a liability lawsuit. If your automobile liability insurance merely covers the minimum required amounts, any vehicle accident for which you're held responsible will only pay out $30,000 per person in bodily injury damages, for a total of $60,000 for all persons injured in a single accident.

If you've taken the proactive step of increasing your automobile liability coverage to ten times the legally required amounts, $300,000 and $600,000, even these may be inadequate amounts if you cause a serious accident where multiple victims suffer significant injuries.

Other Liability Concerns

         

The same may be said of the liability coverage that's part of your homeowner's or renter's insurance policy. It, too, may be woefully inadequate if someone visiting your home trips on your front steps, falls and breaks their neck, or someone falls in and drowns in your backyard swimming pool. Liability judgments can be in the millions, and no ordinary auto or homeowner's insurance will ever cover this expense. That's where an umbrella policy comes in.

An Umbrella Policy Can Save Your Financial Future

An umbrella policy works in conjunction with your basic auto, homeowners or renters insurance, taking up the liability payments where your basic insurance leaves off. It's usually written for a minimum of one million dollars, but even this large amount of coverage is affordable – typically costing somewhere between $150-$200 per year. Each successive $1 million in coverage costs even less.

If you're held liable for an injury in your home, in your car, on your motorcycle, in your RV, watercraft, etc., an umbrella policy can keep you from bankruptcy. It's a small price to pay for huge potential benefits.