A full coverage motorcycle insurance policy includes many protective covers for the vehicle and the owner, which makes it a tad expensive, compared to others. How does one get an inexpensive insurance policy, in such circumstances? The simple answer is, by understanding underwriting and actuarial evaluation factors.
When you purchase insurance for the motorcycle, you become a policy owner and have to pay a premium to the insurance company, based upon which, it covers or provides financial protection against unexpected expenses incurred as a result of any damages to the vehicle.
Now, when you become the holder of an insurance policy, the company views you as a potentially risky asset. It tries to assess the possibility and probability of you getting into an accident or the possibility of an expenditure being incurred. The premium depends upon the probability of the vehicle incurring damage. The rule of thumb is that more the probability or risk of damage, more is the premium amount. This concept of determining risk is known as actuarial science and underwriting. By knowing the factors that increase the risk and therefore, the premium, you may find out ways to reduce the amount.
Features of a Full Coverage Motorcycle Insurance Policy
A full coverage motorcycle insurance is the kind that provides a comprehensive indemnity or protection against future loss to motorcycle owners. The words ‘full coverage’ imply that it is granted for several losses or expenditures that may come up for the vehicle. The elements or expenditures that are covered are mentioned in the insurance agreement. Since there are more number of indemnities that are included in the policy, the overall cost of the policy often turns out to be high.
The standard cost of repair is covered by the policy and related costs such as that incurred for towing is also included. Some of the best policies also cover the costs of third-party repairs, if the insured person has been at fault.
Property damage is another element that is covered in such a policy. The damage to public property as a result of the motorcycle or any another damage to property, which is not a vehicle, is also covered.
The third important element is the liability insurance coverage. In cases where the motorcycle or its owner is responsible for damages, the liability insurance component provides coverage.
It must be noted that there are different instances, probabilities, and possibilities of the compensation being granted. Underwriters and insurance company representatives often consider several aspects before granting a compensation against the claims made. The compensation is also never fully granted and the insured person has to pay some amount, which is termed as the deductible.
To sum up, the most common features of such a policy include bodily injury and property damage liability coverage, collision coverage, uninsured/underinsured motorist coverage, personal injury protection (PIP) or no-fault coverage, comprehensive coverage (includes compensation for a stolen motorcycle), total loss coverage, and medical payments coverage. Some companies also offer custom parts and equipment insurance as part of comprehensive coverage. The more the damages covered, higher is the premium.
How to Land Up with the Cheapest Full Coverage Motorcycle Insurance
As mentioned above, the cost of the insurance or rather the premium depends upon the underwritten risks of the insured person or object. There are some simple ways in which the premium amount can be reduced.
Shop Around and Compare Prices
Just shopping around for quotes and comparing them, will get you cheaper quotes. There are hundreds of companies that provide auto and vehicle insurance. In fact, there are some companies which specialize only in motorcycle insurance. Among the available options, you are bound to find an inexpensive one, that offers the best tradeoff in terms of features.
A Clean Driving Record
An important aspect, that is considered by the companies, is your driving record. Hence, the better your record, lesser is your premium. A good step to cheapen your premium is to join driving classes. This considerably lowers your premium and will brighten the chances of getting a cheaper one.
Opt for a No-frills Motorcycle
The specifications of the motorcycle also affect the cost. Hence, if it is an advanced expensive model, the premium is bound to be huge. However, if the motorcycle is a standard manufactured one, the premium is bound to be bit low. The engine capacity of the motorcycle also matters a lot. The basic equation is that more the engine capacity, more is the premium going to be.
Choose Safer Motorbike Alternatives
Next off, the type of the bike also matters. A cruise bike has a lower probability of getting into an accident, in comparison to a sports or mountain bike. Ergo, your choice of bike will inherently affect the cost involved.
Bolster Safety Features
Adding a good pair of brakes, parking the bike in a garage, using a helmet, good safety clothing, and using safety accessories are some of the other things that would bring down the premium rate. Factors such as age and medical conditions also play an important role in determining the premium amount.
Older You are, Better Deals You Get
One of the few compensations of growing older is landing up with cheaper motorcycle insurance. Yes, if you are past your 30s, your premium value is bound to go lower as actuarial databases show a lower risk of people within your age group, driving bikes recklessly. On the other hand, those in their 20s or individuals below 20 years of age should expect a higher premium.
Customize Deductibles and Coverage Features
Many insurance companies offer customizable policies, where you can choose the deductible and coverage features, according to your requirement. This gives you room to control the cost of a charged premium. Higher the deductible you opt for, lower is the premium that you need to pay.
Look For Discounts
Depending upon your usage pattern of the bike and its specifications, the insurance agent might offer you discounts. For example, if your bike has a higher safety rating or if you only use it occasionally, logging only a few miles a week, you may get a cheaper insurance premium.
Safer Neighborhoods May Lower Premium Cost
If you happen to be living in a neighborhood with low crime rate, it will lower your premium costs. However, people living or working in high crime rate areas should expect slightly expensive premiums.
This insurance is actually quite expensive and would amount to a bit more than the premium for a car. Driving safe is the most prudent way of reducing costs. That way, you save money spent on damages and reduce the hazard on roads for other individuals. Some of the best companies to shop for motorcycle insurance include Allstate, Progressive, Nationwide Insurance, and State Farm.