Auto Insurance
What is auto insurance?
Auto insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy.
Auto insurance provides property, liability and medical coverage:
- Property coverage pays for damage to or theft of your car.
- Liability coverage pays for your legal responsibility to others for bodily injury or property damage.
- Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.
An auto insurance policy is comprised of six different kinds of coverage. Most states require you to buy some, but not all, of these coverages. If you’re financing a car, your lender may also have requirements.
Most auto policies are for six months to a year. Your insurance company should notify you by mail when it’s time to renew the policy and to pay your premium.
FAQs
Your auto policy may include six coverages. Each coverage is priced separately.
1. Bodily Injury Liability
This coverage applies to injuries you, the designated driver or policyholder cause to someone else. You and family members listed on the policy are also covered when driving someone else’s car with their permission.
It’s very important to have enough liability insurance, because if you are involved in a serious accident, you may be sued for a large sum of money. Definitely consider buying more than the state-required minimum to protect assets such as your home and savings.
2. Medical Payments or Personal Injury Protection (PIP)
This coverage pays for the treatment of injuries to the driver and passengers of the policyholder’s car. At its broadest, PIP can cover medical payments, lost wages and the cost of replacing services normally performed by someone injured in an auto accident. It may also cover funeral costs.
3. Property Damage Liability
This coverage pays for damage you (or someone driving the car with your permission) may cause to someone else’s property. Usually, this means damage to someone else’s car, but it also includes damage to lamp posts, telephone poles, fences, buildings or other structures your car hit.
4. Collision
This coverage pays for damage to your car resulting from a collision with another car, object or as a result of flipping over. It also covers damage caused by potholes. Collision coverage is generally sold with a deductible of $250 to $1,000-the higher your deductible, the lower your premium. Even if you are at fault for the accident, your collision coverage will reimburse you for the costs of repairing your car, minus the deductible. If you’re not at fault, your insurance company may try to recover the amount they paid you from the other driver’s insurance company. If they are successful, you’ll also be reimbursed for the deductible.
5. Comprehensive
This coverage reimburses you for loss due to theft or damage caused by something other than a collision with another car or object, such as fire, falling objects, missiles, explosion, earthquake, windstorm, hail, flood, vandalism, riot, or contact with animals such as birds or deer.
Comprehensive insurance is usually sold with a $100 to $300 deductible, though you may want to opt for a higher deductible as a way of lowering your premium.
Comprehensive insurance will also reimburse you if your windshield is cracked or shattered. Some companies offer glass coverage with or without a deductible.
States do not require that you purchase collision or comprehensive coverage, but if you have a car loan, your lender may insist you carry it until your loan is paid off.
6. Uninsured and Underinsured Motorist Coverage
This coverage will reimburse you, a member of your family, or a designated driver if one of you is hit by an uninsured or hit-and-run driver.
NO! Almost every state requires you to have auto liability insurance. All states also have financial responsibility laws. This means that even in a state that does not require liability insurance, you need to have sufficient assets to pay claims if you cause an accident. If you don’t have enough assets, you must purchase at least the state minimum amount of insurance. But insurance exists to protect your assets. Trying to see how little you can get by with can be very shortsighted and dangerous.
If you’ve financed your car, your lender may require comprehensive and collision insurance as part of the loan agreement.
If you lease a car, you still need to buy your own auto insurance policy. The auto dealer or bank that is financing the car will require you to buy collision and comprehensive coverage. You’ll need to buy these coverages in addition to the others that may be mandatory in your state, such as auto liability insurance.
If you’ve financed your car, your lender may require comprehensive and collision insurance as part of the loan agreement.
- Collision covers the damage to the car from an accident with another automobile or object.
- Comprehensive covers a loss that is caused by something other than a collision with another car or object, such as a fire or theft or collision with a deer.
The leasing company may also require “gap” insurance. This refers to the fact that if you have an accident and your leased car is damaged beyond repair or “totaled,” there’s likely to be a difference between the amount that you still owe the auto dealer and the check you’ll get from your insurance company. That’s because the insurance company’s check is based on the car’s actual cash value which takes into account depreciation. The difference between the two amounts is known as the “gap.”
On a leased car, the cost of gap insurance is generally rolled into the lease payments. You don’t actually buy a gap policy. Generally, the auto dealer buys a master policy from an insurance company to cover all the cars it leases and charges you for a “gap waiver.” This means that if your leased car is totaled, you won’t have to pay the dealer the gap amount. Check with the auto dealer when leasing your car.
If you have an auto loan rather than a lease, you may want to buy gap insurance to protect yourself from having to come up with the gap amount if your car is totaled before you’ve finished paying for it. Ask your insurance agent about gap insurance or search the Internet. Gap insurance may not be available in some states.
When renting a car, you need insurance. If you have adequate insurance on your own car, including collision and comprehensive, this may be enough.
Before you rent a car:
1. Contact your insurance company.
Find out how much coverage you have on your own car. In most cases, the coverage and deductibles you have on your personal auto policy would apply to a rental car, providing it’s used for pleasure and not business. If you don’t have comprehensive and collision coverage on your own car, you will not be covered if your rental car is stolen or if it is damaged in an accident.
2. Call your credit card company.
Find out what insurance your card provides. Levels of coverage vary.
If you don’t have auto insurance, you will need to buy coverage at the car rental counter. The following coverages are available to you at the rental car counter:
1. Collision Damage Waiver (CDW).
Sometimes called a Loss Damage Waiver (LDW), this coverage relieves you of financial responsibility if your rental car is damaged or stolen. The CDW may be void, however, if you cause an accident by speeding, driving on unpaved roads or driving while intoxicated. This coverage generally costs between $9 and $19 a day. If you have comprehensive and collision on your own car, you may not need to purchase this coverage.
2. Liability Insurance.
This provides excess liability coverage of up to $1 million for the time you rent a car. Rental companies are required by law to provide the minimum level of liability insurance required by your state. Generally, this does not offer enough protection in a serious accident. If you have adequate liability coverage on your car or an umbrella policy on your home/auto, you may consider forgoing this additional insurance. It generally costs about $7 to $9 a day. If you don’t own a car, and rent cars often, consider purchasing a non-owner liability policy. This costs approximately $200 – $300 per year. Frequent car renters sometimes find this more cost-effective than constantly paying for the extra liability coverage.
3. Personal Accident Insurance.
This provides coverage to you and your passengers for medical/ambulance bills. This type of insurance, usually costs about $3 per day, but may be unnecessary if you are covered by health insurance or have adequate medical coverage under your auto policy.
4. Personal Effects Coverage.
This provides coverage for the theft of personal items in your car. However, if you have homeowners or renters insurance, you may be covered for items stolen from the car, minus your deductible. You need to have receipts or other proof of ownership. This type of insurance usually costs about $1.25 per day. Some rental car companies combine personal accident and personal effects coverage together as one type of insurance, while others sell it individually.
The cost of insurance at the rental car counter will vary depending on the rental car company, state, and location of the dealer and the type of car you rent.
Some rental car companies may check your credit and driving history and may deny coverage. Check with the rental car company to find out its policy.
There is a big difference between when an insurance company cancels a policy and when it chooses not to renew it. Insurance companies cannot cancel a policy that has been in force for more than 60 days except:
- If you fail to pay the premium.
- You have committed fraud or made serious misrepresentations on your application.
- � Your driver’s license has been revoked or suspended.
Non-renewal is a different matter. Either you or your insurance company can decide not to renew the policy when it expires. Depending on the state you live in, your insurance company must give you a certain number of days notice and explain the reason for non-renewal before it drops your policy. If you think the reason is unfair or want a further explanation, call the insurance company’s consumer affairs division. If you don’t get an explanation, call your state insurance department.
boat Insurance
What is boat insurance?
Boat insurance covers you in the event of a loss or damage to your boat. It covers most watercrafts with motors, including fishing boats, pontoon boats, paddle boats, leisure crafts and yachts. Boat insurance does not usually cover canoes, kayaks or personal watercrafts (PWC).
For small watercrafts, you may find some limited coverage under your homeowners policy. You may also be able to add a special endorsement or buy separate coverage. Contact an independent agent for assistance with all of your boat coverage.
FAQs
Your boat insurance policy may include the following:
- Collision damage: Includes repair or replacement of your boat, but may or may not include clean-up of wreckage unless you purchase optional additional coverage.
- Property damage liability: Covers damage you might cause to someone else’s boat, a dock, or other property or structures.
- Bodily injury liability: Covers injury you might cause someone while using your boat; includes medical bills, lost income, pain and suffering, and legal expenses.
- Comprehensive: Provides compensation if your boat is vandalized, stolen, or damaged in an incident other than a collision.
- Additional coverage options: Coverage for medical payments, fishing equipment, oil spills, personal property and roadside assistance, as well as damage and injuries from accidents caused by boaters who are uninsured or underinsured.
The amount of compensation you receive for a claim depends on a few things, including your deductibles, limits, and whether your boater’s insurance covers your boat’s actual cash value, replacement cost, or agreed-upon value.
When you buy boat insurance, you must decide on the amount of coverage you need for your boat, the deductible (maximum out-of-pocket expense per claim) and the types of coverage you need.
If you have an accident, experience a theft, or have another loss that is covered under your policy, you can file a claim and receive a payment covering the loss.
If you were in an accident with another boat that caused serious damage to your vessel, one of the following things would most likely occur, depending upon the insurance coverage you and the other boater have and the laws in your state:
- If you were at fault, your boat liability insurance would cover the damage up to the limits of the policy.
- If the other boater was at fault, their coverage would pay for your damage, up to the limits of their policy.
- If the other boater was at fault, but did not have boat insurance, or did not have enough to cover your expenses, uninsured/underinsured boaters coverage could cover the damage (if you had that coverage in place).
The cost of boat insurance varies depending on:
- The state you live in
- The type, size, and age of the boat you wish to insure
- The size of the motor and how it is powered
- Whether you are using it on inland waters or the open seas
- Whether you have selected additional coverage options
In general, boat insurance can range anywhere from as little as $200 to as much as $500 per year.
Insurance companies also offer a number of discounts. These discounts can give you a price break under certain situations. You may be able to receive a lay-up discount if you don’t use the boat year-round, or a discount for boating in fresh water instead of salt water.
You may also qualify for discounts if you’ve taken a boating safety course, or a good driving discount if your boating record is unblemished. Insurance companies vary in the discounts they offer, so be sure to ask an independent agent to compare quotes and options from multiple carriers on your behalf.
Boaters often want to know whether they have to carry boat insurance to enjoy the water. The answer is that boat insurance can be required for a variety of reasons. Some states require that you have liability coverage.
Marinas may require you to have boat insurance in order to dock your boat there. Additionally, if you take out a loan to buy a boat, the lender will most likely require that you purchase boaters insurance.
The amount of boat insurance you need depends on a number of factors, including the boat’s value, motor size, age, and how you use it. If you have a brand-new high-performance speed boat, you will need more coverage for bodily injury and property damage liability than if you buy a pleasure cruiser.
Insurance professionals recommend buying at least $1,000,000 in liability insurance, and even more if you have a fast, powerful boat that is both riskier and can cause more damage.
For uninsured/underinsured motorist coverage, a typical minimum is $10,000. However, the amount you purchase should reflect the potential injuries and damage you may need to cover if you or one of your passengers is seriously hurt, or your vessel is damaged.
Your other coverage amounts, including collision coverage and comprehensive coverage, should be based specifically on the value of your boat.
Boat insurance covers boat passengers as well as the owner in an accident. Passengers on the boat are covered under the liability portion of the boater’s policy.
However, depending on the policy, this may or may not extend to water skiers you are pulling behind the boat. Be sure to work with a knowledgeable professional who can help evaluate your needs and risks.
Comprehensive boat insurance covers the theft of the boat itself. Personal possessions carried in the boat may or may not be covered, depending on the policy. Therefore, you should carefully review the comprehensive coverage of your policy to determine exactly what is and is not covered.
If you plan to carry expensive fishing equipment or other items of value, you can purchase one or more additional riders, or policy endorsement, to cover those assets.
Depending on the insurance company and structure of your policy, boat insurance may or may not cover hurricane damage. If tropical storms, hurricanes, tornadoes or windstorms are a concern where you live or travel with your boat, ask your agent about storm damage coverage for your watercraft.
Boat insurance sometimes covers engine damage. This varies from company to company, as well as by policy. Some insurance companies have machinery damage exclusions while others do not; it often depends on the age of the motor. Reimbursement may include replacement cost or be subject to depreciation.
If you have comprehensive insurance or property damage coverage built into your policy, your boat insurance will cover collision with rocks, logs, and other marine obstacles.
Boat insurance covers a blown engine under some circumstances. Check that with the insurance company issuing the policy. Many policies will cover a blown engine when the cause is a manufacturer’s defect, but not if is due to normal wear and tear.
Collector Car
What is classic car insurance?
Classic car insurance is a specialty type of auto insurance that covers various types of classic and antique cars. Classic car insurance is similar to standard car insurance, but there are key differences that reflect the unique nature of classic cars.
The main difference with classic car insurance is how the car is valued. Standard auto insurance policies pay actual cash value, or ACV, on claims. Actual cash value takes depreciation into account on the value of the car. And since cars lose their value fairly quickly, this can result in a much lower claims check than what you paid for your vehicle.
FAQs
There are basically two definitions of classic cars:
1) The strict definition of a classic car in insurance
2) The commonly used word ‘classic’ to describe any type of older vehicle
Both definitions are used to describe vehicles that are at least 20 or 25 years old. But there are subcategories of vehicles that are used to describe different types of vehicles that are between 20 years old and over 100 years old.
In this article, the term ‘classic car insurance’ will be used liberally to describe any type of older vehicle, whether it’s a true classic car, antique car, hot rod, modern collector car, or any of the other vehicle types that fall under the classic car umbrella.
Since there is no standard definition of what a classic car is, other than that they are normally over 20 years old, each insurer may classify your vehicle a little differently. Normally, this won’t affect your coverage, it’s just that each insurance company handles these vehicle types a little differently.
Generally, the different categories of classic vehicles include:
- Classic cars. Normally, classic cars are vehicles that are at least 20 years old but no older than 40 years old. Some states and insurance companies extend this definition to cars built between 1915 and 1948, which is how the Classic Car Club of America defines the term.
- Antique cars. Antique cars are generally older than classic cars, which would include vehicles older than 45 years.
- Vintage cars. Vintage cars are generally considered to be vehicles built before 1925, in the first days of the automobile. Other definitions may have a narrower window of cars built between 1919 and 1930.
- Kit and replicas. Kits and replicas are vehicles that you can build yourself or buy that appear similar to famous classic cars. They are valuable in their own right and have their own classification.
- Muscle cars and hot rods. Hot rods and muscle cars are sometimes on a blurry line of what is what, but they are usually modified with extra parts built for performance. Likewise with street rods, though they are typically built for comfort instead of performance.
- Modern collector cars. These are often special edition cars or have unique features that set them apart from regular cars. They are typically built after 1990 but still fall within the large ‘classic car’ realm of insurance.
- Classic exotic and sports cars. If your classic car is especially built for speed, it may fall under this category. Some of these vehicles are involved in racing, which often excludes coverage while on the track.
- Race cars. Similar to exotic and sports cars, some race cars are insured by classic car insurance companies. There probably won’t be coverage while on the track, but you may be able to insure your race car for an agreed value as long as it’s not racing.
These categories aren’t set in stone and vary with each state and insurance company. They mainly serve to help organize the different types of vehicles, rather than just having one broad ‘classic’ car category.
Most classic car insurance companies won’t have any problem insuring most of these vehicles. Standard insurance companies may only be willing to insure vehicles built after 1930 or 1940, which means you’d need to find a specialty company that can insure any of these older vehicle types.
RV Insurance
What is RV Insurance?
Recreational vehicles, or RVs, include a wide range of motorhomes, from camper vans to bus conversions, organized by classes: Class A, B and C. Your RV insurance will depend on the class of your vehicle, how much you use it, whether you live in it full time and other factors.
The classes of RV include:
Class A: This class includes models such as the luxury coach, converted bus and motor coach. These vehicles can be up to 75 feet long.
Class B: This is the smallest class of recreational vehicles. These vehicles do not have a cab-over, and can also include cargo van type designs, travel trailers, and camper vans.
Class C: This group includes vehicles that use a standard cargo van as the driving portion of the RV and the camper portion extends over the cab area. This class covers fifth wheel vehicles.
To find the right RV coverage for your motorhome or camper, contact an independent agent in our network. A local agent can help you compare several different RV insurance quotes and find the right coverage for your needs.
FAQs
RV insurance covers many of the similar risks that auto insurance does, including collision, comprehensive and liability coverage. You can also get additional protection for your personal belongings on board, equipment and attached accessories such as awnings and satellite dishes.
Depending on the insurance company you choose, your additional coverage options may include:
- Total loss replacement coverage
- Campsite and vacation coverage
- Emergency expenses
- Towing and roadside coverage
- Full-timer coverage if your RV is your full time residence
- Uninsured and underinsured motorists coverage
RV insurance protects you, as a recreational vehicle owner, from excessive out of pocket costs in the event of a loss or if you are at fault in an accident that causes bodily injury or property damage. It can also provide compensation for your costs if you have a roadside breakdown.
As an example of how RV insurance works, let’s consider some accidents or trouble you could encounter with your motorhome on a vacation. Your RV insurance would potentially cover you in the following ways:
- If you have uninsured/underinsured motorists coverage and another driver collides with you but is not insured, your insurance company will pay for your damages. The amount of compensation you receive will depend on the amount of damage, your deductible amount, and the limits set on your policy.
- If you are at fault for an accident, the other driver will file a claim with your insurance company. Your insurer will pay the claim up to the limits of your liability policy. You will pay the costs of any damages, injuries, legal fees or judgments out of pocket beyond the limits set on your policy.
- If your RV is disabled after a crash and has to be towed, your insurance will cover some or all of the costs of towing.
- If your RV is stolen, an animal causes damage to your RV, or it is damaged in a hail storm, your comprehensive insurance would provide coverage for your losses, after your deductible and up to the limits you’ve selected in your policy.
The cost of RV insurance will vary widely, depending on several key factors:
- Whether your RV is a Class A, B or C model – Class A is the most expensive coverage followed by Class C, while Class B RVs are the least costly to insure
- Whether you use your RV occasionally or if you are living in the RV full-time
- Your driving history and record of accidents or past claims
- The limits you set on your policy, as well as the deductible amounts – for example, your overall costs will be lower if you choose high deductibles, but you will also have higher costs to pay out of pocket in the event that you need to file a claim
- The additional riders or added coverage you want to add, such as coverage for your personal belongings, towing and roadside assistance coverage, etc.
As a reference point, a Class A RV may cost around $2,000 dollar a year or more to insure, while a Class B may fall somewhere in between $1,000 to $2,000 dollars.
RV insurance is an important coverage because of the large investment you’ve made in your motorhome. It is also important because these are large vehicles that can cause major injuries and significant damage to other vehicles and property in an accident.
Consider also that if you buy a new RV costing anywhere from $30,000 to over $200,000 and haven’t purchased full replacement cost coverage, you can be saddled with significant costs if it is totaled in an accident.
Like car insurance, RV insurance is required in every state. All states require a minimum amount of liability insurance; in addition, some require uninsured and underinsured motorists coverage.
Collision and comprehensive insurance limits are determined by you, the consumer. Be sure to consider how you will cover your costs if you are in an accident and do not have adequate coverage.
Under the following circumstances, you will experience additional requirements:
- If you rent an RV
- If you live in your RV full time – in this case, you will need full-timers insurance which has some similarities to homeowners insurance
- If you finance the purchase of an RV – when you borrow money to buy your motorhome, your lender will most likely require you to buy RV coverage before your financing can be approved
The amount of RV insurance you need will depend on several factors, such as:
- The requirements of the state in which you reside
- The class of motorhome you own
- Where you will be traveling, and whether you will cross state and country borders
- Whether you are using it part time or living in it full time
- Whether you have custom features on your motorhome, which can result in higher repair costs
Additionally, the amount of RV coverage you need will depend upon the assets you want to protect in the event of a liability claim or lawsuit.
For help determining how much RV insurance you will need, contact an independent agent in our network. An agent in your area can help you learn about the requirements in your state as well as the specific risks you may face.
Motorcycle Insurance
FAQs
Motorcycle insurance provides financial protection in the event of a motorcycle accident, loss, theft or damage. Motorcycle insurance includes liability coverage in case you are responsible for another person’s injuries or property damage.
These policies provide coverage for motorcycles, choppers, fast street bikes or “crotch rockets,” mopeds, and even Segways.
If you have just purchased a motorcycle, or have owned one for a while and are considering changing insurance providers, you may have several questions. Do you wonder what motorcycle insurance will cover, and what financial risks you face in the event of an accident?
You can get your questions answered by a local professional who understands the requirements of your state, and will get to know you and your coverage needs. Simply contact a local independent agent in our network who can help choose the right policy for you.
A standard motorcycle insurance policy will cover some portion of the costs associated with damage to your bike. It will also provide compensation in the event that you cause harm another person or their property or have legal fees to pay an accident.
Known as “bodily injury and property damage liability,” your motorcycle liability insurance covers the cost of liability claims and legal fees, up to the limits of your policy, if are at fault in an accident.
You can customize your policy to cover the following:
- Full replacement cost of your bike, in the event that it is totaled
- Comprehensive coverage, which will pay for loss or damage due to causes “other than collision.” This includes hail and other weather damage, damage from animals, and most importantly motorcycle theft
- Medical payments, in the event that you require hospitalization or medical care
- Uninsured/underinsured motorists coverage, in the event that another driver is at fault in an accident and does not have adequate insurance to pay your costs
- Damage or loss to your gear and upgrades, such as transport trailers, sidecars, custom exhaust equipment, and safety apparel like chaps and helmets
When you choose what you want your motorcycle insurance to cover, find a balance between protecting yourself against the risks you face and what you can budget for coverage. The good news is that there are many ways to save on your motorcycle insurance if you are a safe rider with a good driving record.
The amount of motorcycle insurance that you need depends on the type of bike you own and how you plan to use it. For example, if you ride a fast bike such as a racing bike or a super sport motorcycle (also known as a “crotch rocket”) your bike will be costlier to insure.
Additionally, you may want to increase the amount of motorcycle liability insurance as well as your coverage for hospital and medical care.
Any bike with an extremely high horsepower-to-weight ratio is designed for speed and maneuverability, meaning riders tend to ride faster and weave between cars. These riders have a greater risk of serious injuries as well as potential incidents that cause injury to others.
If you plan on racing dirt bikes for fun, you may want to consider increasing your coverage as well. The close-quarters racing and crowded tracks can put you at greater risk of injury, damage to your bike, and an increased risk of causing injury to a competitor or damaging someone else’s equipment.
Motorcycle insurance requirements vary by state, so be sure to work with a local insurance agent who can help you craft a motorcycle policy that best protects you and your financial well-being.
Motorcycle insurance works in the same way that car insurance works. For example, if you have bodily injury and property damage liability coverage, any damage you cause to someone’s property is covered by your insurance policy, up to the limits of your policy.
Your liability coverage will also cover some portion of your legal costs, if an injured party files a lawsuit against you. Again, the amount your insurance will cover depends upon the limits you choose when you buy your policy.
If the cost of the claim is beyond the limits of your policy, you will be responsible for paying any costs out of pocket for the other party’s injuries or damages.
Depending on the amount and type of coverage you have, your policy may also cover medical or hospital costs for you and your passengers. Uninsured/underinsured motorists insurance will pay for the costs of an accident if a driver caused the accident who was not adequately insured.
If you have comprehensive insurance, you will be covered for losses not by a collision. For example, comprehensive covers motorcycle theft of your bike, or parts of it.
After a loss, you will file an insurance claim and receive compensation up to the limit of your policy, after your deductible amount is subtracted.
For example, if you have a $500 deductible, and you suffer $1,300 dollars in damages during a collision, you are responsible for the first $500, and the insurance policy will pay the additional $800 to complete repairs. If the damage amount is less than the deductible amount, you would not receive compensation for the claim.
Most carriers allow you to adjust the amount of your deductible. The lower the deductible, the more you will pay for premiums. If you pay a higher deductible your premiums will be lower, but you will have more to pay out of pocket at the time of a claim.
If you work with an independent agent, you can customize a policy to protect against the threats you are most concerned about, such as theft, property damage, vandalism or weather damage. You can even insure yourself against the bike breaking down and ruining your vacation.
The cost of motorcycle insurance varies widely. If you have a small Honda that you use for commuting and have a claims-free driving record, you may pay a few hundred dollars a year.
On the other hand, if you are a new teen motorcyclist and you are buying a crotch rocket, you may pay $3,000 to $5,000 per year in premiums.
Overall, motorcycle insurance can seem expensive to those who are used to paying car insurance costs. The reason for higher rates for motorcycle drivers is the higher risk they face on the road. For example:
- Motorcycles are more difficult to see on the roadway and in blind spots.
- Motorcycle crashes result in a high incidence of serious and fatal injuries because the rider has little protection as compared to a vehicle with steel reinforcement and airbags.
- Motorcycles, and sport bikes in particular, are easy to steal. Two or three people can hoist one onto a truck and be gone in moments.
- Recovery rates for stolen motorcycles are low because they tend to be sold for parts. Thieves can simply buy a frame from one of the thousands of crashed bikes, remove the engine, wheels, and everything else from the original frame, then mount it onto a new frame and get a clean salvage title.
If you want to save on insurance costs, there are several strategies you can follow:
- Buy an older bike that does not have a high value
- Buy a bike with a smaller engine (under 600cc)
- Take a motorcycle safety course
- Ride safely and remain claims free
- Ask an independent agent to compare prices for you from multiple insurance companies
- Ask your agent to find all available discounts; you may get cost reductions for a clean driving record, riding only a certain amount of miles per year, or memberships in certain associations or clubs
A certain amount of liability insurance is required in every state and in the District of Columbia.
The precise amount varies from state-to-state, however. The state with the lowest liability requirements is Louisiana, which requires motorcycle operators to buy $20,000 of personal injury coverage, and $10,000 in property damage coverage.
The states with the most stringent requirements are Maine and Alabama, which each require cyclists to have $100,000 in injury coverage and $50,000 in property damage coverage.
The injury coverage amount is the maximum amount the insurance company must pay out for all persons injured in the accident, including the operator.
Motorcycle insurance is important to protect yourself and others and to protect your bike. Motorcycles are much easier to steal than are automobiles or passenger trucks.
Also, once stolen, they are easy to strip down, rebuild, and sell. Moreover, motorcycles are much more dangerous to operate than are passenger vehicles, for several reasons:
- They’re small and hard for other motorists to see.
- They’re very fast and maneuverable, which makes them even harder to see.
- They operate on two wheels; a moment of inattention can result in an accident.
- Operators have no protective devices, such as seat belts or air bags.
For all of these reasons, it is vital that you get yourself covered if you plan to operate a motorcycle on the highway. If you plan to race your bike, either competitively or for fun, it is even more important that you insure yourself and your bike. This is true whether you plan to race on level ground or on off-road, motocross tracks.
Whether or not your insurance covers track days depends on your policy and your carrier. Some companies do cover track days, while others do not. Those that do cover track days, however, usually do so with several exclusions.
For example, many will not cover accidents that occur during a race, timed event, or speed test. They will, on the other hand, pay out for accidents that occur on a track day during which you were riding for the purpose of improving your bike-handling skills and to become a safer, more defensive driver.
Because coverage varies, be sure to ask your insurance agent about precisely what is and is not covered under your policy. You do not want to learn what’s covered after you’ve damaged your bike and need repairs.
Depending on your policy, motorcycle insurance may cover theft. Most, if not all, comprehensive insurance policies cover theft of your motorcycle whether it happens at home, on the road, or during transport.
Comprehensive coverage also pays for anything that might be stolen from your bike, such as mirrors, a radio, helmets, or other accessories. Be aware, though, that insurance companies only pay out if the loss exceeds your deductible.
Lower deductibles will require you to pay more for premiums, but you can determine the amount of deductible at the time you purchase your policy. Be sure to keep records of any add-ons or modifications you have made to your bike that affect its value.
Whether or not other riders are covered by your motorcycle insurance depends entirely on your policy and your provider. If you bought only the minimum liability coverage, other riders may not be covered.
Moreover, coverage depends on whether the other rider was a passenger while you operated the bike, or whether you had loaned the bike for someone else to ride.
You can only receive a definitive answer to this question by reviewing your insurance policy with your insurance agent. This is an important question, so make sure you bring it up when you ask your insurance agent for rates and policy information.
Umbrella
Go Beyond Basic Coverage with Umbrella Insurance
Most Americans view auto insurance as necessary to protect against the costs of a car accident. Likewise, it’s common knowledge that homeowners insurance helps families rebuild their lives and homes. An “umbrella” policy is not as well known, but anyone who owns a home or any assets should consider buying it.
Umbrella liability insurance covers you in many situations if you are held responsible for bodily injury, property damage, or personal injury. The product got its name because it adds a higher level of protection above auto, homeowners and boat policies, which are “primary” policies. Umbrella coverage kicks in after primary insurance is exhausted. What’s more, an umbrella policy offers primary coverage for losses not covered by other insurance.
Typically, insurance agents sell an umbrella policy in conjunction with auto and homeowners coverage. You can usually add $1 million-plus of liability insurance for a few hundred dollars per year, and a multiple-policy discounts often can be had. One tactic insurance pros suggest: raise deductibles on auto and homeowners policies, and use the premium savings to pay for umbrella coverage.
Liability insurance under auto and homeowners policies pays expenses (for example, an injured person’s medical care, rehabilitation and lost wages) because the policyholder was at fault through negligent actions. Liability coverage also pays for costs of defending against a claim or lawsuit.
It’s common for a driver, vehicle owner, homeowner, or boat operator/owner to be held responsible for someone else’s injuries, property damage, lost wage and/or expenses. An at-fault driver also can be held liable for personal injury (which is distinct from bodily injury), including psychological injury such as “pain and suffering.”
The umbrella is a shield to protect an individual from having to tap into savings or sell assets to pay a judgment or claim. The umbrella policy keeps the hands of the claimant from the personal, family and business assets of the negligent person.
Intoxicated drivers leaving a party at your home, dog bites, and the neighbor kid falling off the trampoline– these incidents can cause financial losses. Even lending a friend a ski house or lake house for the weekend can create a claim. A tree in your yard that blows over in a storm and crushes the neighbor’s car is another example. A home-based business that requires visitors to come to your house may create a loss that’s excluded from homeowners coverage.
But all these incidents may cause bodily injury, personal injury and loss of wages. These losses might exceed (or be excluded from) primary insurance limits and coverages.
Most homeowners should consider an umbrella, but especially those active in community affairs. Serving in civic, charitable, and religious organizations can lead to conflicts, claims, and even lawsuits. Even if a lawsuit is thrown out of court, you still must defend yourself. Umbrella liability coverage picks up these costs, whether or not a person is actually found to be liable. Defense costs generally are covered in addition to the liability limits of the umbrella policy.
Conversely, a person might face a damaging situation such as a false arrest or imprisonment, defamation, invasion of privacy, wrongful entry, eviction or malicious prosecution. Most will want to defend themselves, but will face legal and other costs to do so. Homeowners coverage won’t cover it; an umbrella policy can.
