INSURANCE and what riders need to know about it

[Texas Pete]

I picked this up when researching insurance. Might as well park a copy here in case it disappears.

This is based on the US so if you are not in the US then this likely won’t apply to you.

Most US states require you to have insurance on any vehicle including motorcycles. There are various aspects of insurance worth knowing about.

1. Liability coverage

The insurer pays damages you cause through your negligent or reckless operation of the vehicle up to the policy limit. Most states have a minimum you must carry. This is expressed in a per person / per incident limit for bodily injury. So, a 25/50 policy will pay up to $25k per person injured but no more than $50k per incident. Property damage is stated separately. So, that policy above would be stated as a 25/50/10 with the 10 being the up to $10k per incident the insurer will pay for property damage to other vehicles / houses / shrubbery / livestock you cause. From a liability point of view you want limits well higher than the value of every thing you own, roughly speaking. However, read below for why you want the highest limits you possible can.

2. Comprehensive and Collision.

This pays for damage to your insured vehicle without regard to fault. Tree falls on bike and squashes it - comprehensive pays up to the limit. You run into a building, collision pays up to the limit. If you are financing the bike you'll be required to carry this, usually in the Fair Market Value (FMV) amount of the bike on the day you buy it for so long as you owe on the bike. The bank/finance company will be a named insured so that if the collateral (the bike) gets totaled, they get paid back from insurance. This is expensive. Most folks don't carry it if they don't have to. Keep in mind - with the cost of replacement OEM bodywork even a parking lot tipper can generate thousands in damage. If your bike isn't financed, paying for this is just a personal economic choice.

3. PIP "Personal Injury Protection"

Also called "no fault medical." Pays your medical bills from a crash, up to the limit, regardless of fault. Always expensive for bikes, not always available. Necessary if you don't have health insurance. Waste of money if you have good health insurance.

4. Medical Payment (MP) coverage

PIP is fine for states that offer it, not all do. Medical Payment coverage pays you/your passengers for any injuries that take place, regardless of fault.

Even with great health insurance, you’re still going to be subject to your plan’s deductibles (DED) and Out of Pocket maximums (OOP). I always recommend people raising their MP limit above their OOP or at the very least their DED, that way if you’re responsible for an accident or you throw yourself from the bike, you wouldn’t have to pay a cent of your own money for any injuries you sustain."

5. UM / UIM

UM = Uninsured Motorist coverage.
UIM = Underinsured Motorist coverage.

Both of these pay you for damages caused to you by the other driver. For example, some distracted driver on her phone runs the red light and t-bones your bike and hurts you. If she has no insurance your insurer steps in as if it was her insurance company and pays your damages, up to the limit you choose to pay for. If she has low limits and your UIM is higher, your UIM pays the damages above her limits and up to the limit you choose to pay for.

Some riders consider this the most important insurance we can carry. If someone is driving poorly and is also uninsured they don't care about you. You do care about you.

You cannot buy UM / UIM in amounts greater than your liability limits. Thus, you want the highest liability limits you can get so you can get the highest UM / UIM you can get. This is worth paying for. I consider it every bit as necessary as a helmet.

6. Umbrella

An "umbrella" policy pays damages above the limit of the other policies you have up to your umbrella limit. The holy grail is an umbrella that stacks with your UM / UIM limits. Umbrellas are surprisingly cheap for the coverage you get.

7. Buying a new motorcycle

Most Auto and Truck policies usually cover newly acquired vehicles for 30 days after purchase. So, you buy a new-to-you used car it's covered without having to call your agent right when you get the keys. Most bike insurance DOES NOT DO THIS. The new bike you buy is not covered unless the insurer knows about it in most states. Know your State's rule on this before you buy or ride any motorcycle not on your policy.