Cycle News is a weekly magazine that covers all aspects of motorcycling including Supercross, Motocross and MotoGP as well as new motorcycles
Issue link: https://magazine.cyclenews.com/i/141041
pay fo r the losses of a few. They co mp ile statistics which in dicate the possible los ses. T he companies then calculate your insurance rates to cover th ese loss es withou t depleting their reserves or e x ceed ing the state regulations. Specialized statisticians, called actuaries, compile , and interpret these insurance co mp any. They have hired statistics, thus the name actuarial tables. lawyers to defend t hem , and you, T h e real money-making potential in against sui ts. They want to keep in surance comes from the required settlements low. When two people with reserves. Rather than le t the reserves sit insuran ce get invo lved in a suit , the ir a ro u n d, the insurance c omp anies insurance co mp an ies battle it out. The arrange to break even with their companies will arrive at a satisfactory premium income and tum a profit from settlement from their poin t of view, the various investments they have made which may be sa tisfac tory fro m yours, with the reserves. too. A small insurance company cannot Mos t insurance co mp an ies would like satisfy the state reserves requirement by you to believe that the in surance agent itself. The sm all ' sp ecialty companies is a valu ed famil y co un selor; a dedicated join to gether to meet the stan dar ds se t professional who prote cts his clien ts by th e state insurance commissioner. from the fin ancial co nseq uen ces of For this reason , most of the companies active living in our society. Many people wh i ch specialize in motorcycle see insurance agents as pushers of a in surance are di re ct writers. They serv ice th at will return a nice profit. underwrite insuranc e on the reserves of Unfortunately , you will encounter the a group, while a direct writer has .' seco nd ca te gory most often in your sufficient resources to underwrite search for motorcycle insurance. insu rance policies on its own. For all M ot o r c ycle salesmen and sh op practical purposes, these big comp anies owners take a cr ash course to pass the take lit tle in teres t in motorcycle state licensing exam. They like th e insurance . They say that they have no guaranteed tw en ty percen t commission motorcycle accident statistics to go on , that accompanies every in surance sale . so th ey don 't differentiate between wh ich , in tum, acc omp anies every motorcycle and au to mo t ive risk in their motor c ycl e sold on tim e . These actuarial tables. gentlemen hav e thei r hands full just Th e insurance co mpanies y o u see on running their sh ops. T h ey usually do television commercials have left the not h ave time to study ins u ran ce and motorcycle ins urance field open for spe cialt y comp anies l ike ,Elite , Eldorado, Interst ate General , Universal Un derwri ters, Balboa, Maynard, and Res erve Ins uran ce. You can also obtain insurance through membersh ip in seve ral organiza tions, such as M.O.R.E., AAA , and the A.M .A. These offers vary cons ide rably, and you would be wis e to study th em we ll before relyi ng on on e of th em for all of y o ur in surance protec ti o n. The AAA seems to offer the be st in su ran ce of th e gro ups - we ll w o rth checking in to . A n ex planation of a ty pical m o to rcy cle insurance ' policy m ay h elp you to estimate the val ue of an insu rance offer. First , the ins urance co mpanies use the same statistical sample to set thei r rates, so basic co sts d o no t vary greatly from company to company. T he differen ces occur in res triction s, add-on coverage, claim s services, an d de d uc tibles. T he avera ge basic m otorcy cle insu rance policy offers coverage in the fo llowing areas: 15 / 3 0/5 bodily injury and p roper ty damage, liabi li t y , co ll is io n coverage, an d co mprehe ns ive. T he last is a term for fire, th eft , van dalism, falli ng aircraft an d o th er ins tances of loss specified b y th e co mp any in yo ur p olicy . All moto rcycle insurance policie s are restrictive. Yo u must p ay extra for uninsured motorist coverage , medical you 're going to need more than the good luck to p ayments, driving another cycle, p assenger liability, towing and r oa d service, financial responsibility , and c on ve rs i o n , emb e zzlemen t and secretion . The last two items on that list are so mewh at special and worth taking the in surance con tract they offer to time out to explain. . you. Also , th ey can no t usually take the F i n an cial responsibility coverage time to help out if you have a problem deals with the guy who just had an with your insurance. The shop owner is a c ciden t and has to meet the an insu rance salesma n. As a salesman , he requiremen ts of the state Financial is bound to the company. He cannot Re sponsiblity Law. An in suran ce modify the ins urance co n tact. He just company can cover him in such a case, sells y ou the insurance. but the paperwork is lengthy and The in de pen den t insurance agent has comp lex in such a case . This situation a li ttle more power than the insurance applies only to . a person uninsured at salesman. The insurance companies the time of his accident. 'co mpe te fo r his business just as he Conve rsion, embezzlement, and c o mp e tes for your business. The secretion c overage applies in a case independen t agen t can use this power as where the loan co mp any considers the a lever for you r b en efit in certain motorcycle buyer a bad credit risk. The s ituation s. Insuring through an loan compan y will force the in d ep en de n t agen t allow s y ou the motorcyclist to buy the special maximum amount of fle xibility possible coverage. That way, the loan company w ith y o u r ins u ra nc e coverage. has protection if the buyer skips with Un for tun atel y, thes e desirable the motorcycle. In some cases , 'a intermediari es 'are in sh o r t supply righ t particular b ank or lo ancompany may now. T he indep enden t insuran ce agent require suc h coverage on every loan wh o carries motorcycle insurance is rare th ey make. Th e insurance companies o r non-existent in most part of th e may require suc h coverage on all the country. Grow th in the number of loans mad e by a bank which has asked motorcy clists will eventually bring for such coverage in the past. They want gr ow th in th e number of in de pe n de n t to sp read out th eir risks. m o to rcy cle insurance agen ts. You sh o uld sh op ar ound to avoid Mo to rcy clin g's incr easing populari ty these required options. Because t he h as alre ady created a m arket fo r ins u rance co mp an y or th e bank can insu rance co mp an ies wh ich sp ecialize in fo rce y o u to buy th ese coverages, they motorcycle insuranc e. Some of them are di fferen t from the normal options, m ay ap pear to b e hole-in -the-wall though th ey ap pear in the same list on o utfi ts with cheesy names. This image is m ost ra tesh ee ts. You don't need them. in co rr ect. N o m a t ter how small their In cr eased liability coverage is the hole an d cheesy th eir name, all only other op tion available on most insurance underwriters have to meet motorcycle insurance policies. You can st a te standard s of capi taliza tion and . usually buy up to 100/100/10 liability reserves . .. . . . _ I coverage fo r .ar o un d twenty.five dollars. In su rance companies make money by Unlike 'th e . SasiC' 15 730/p, 'haliility:"the >pooling the re sources of the many to cost of th~ ! ~xtra liability /cove rage 'does ' i What YOU Need to Know ; About Motorcycle Insurance . c: .., by Sp ence Bur ton When Joe Biker sets o u t to buy h is ~ new motorcy cle , h e th in ks about im age ~ and ide ntity , not insu ra nc e. His mind is w full of horsepower, handling an d p rice, ~ not "torts" or "de ductible" . Joe w ants ~ to get out and cru ise. He d oes n ot want , tJ to lis ten to a salesman ex p lain actuarial ta bles. Joe Biker m ay n o t w an t anything to do wi th motorcycle insurance. Yet, insurance has a gre a t deal to do with Joe. He must buy ins urance for his new motorcycle in orde r to o btain a loan to buy it. Insurance will protect J oe 's inve stme n t in case of theft. It will pay the bills if Joe gets into an accide n t . Insurance can help Joe Biker in m any ways. On the oth er hand, insurance may be a big pain. F or every three guy s w ith no co mp lain ts, y ou can ' fin d on e fello w who tell s a tale of in surance wo e. Joe ma y see himself as a helpless vic tim; screwed by outrageous rates, trapped in the predatory jaws of kill er lawyers. In surance can confuse, fri gh ten , and b ore an average m otorcy clist like Joe. T he purpose of this article is to help Joe Biker and y ou understand motorcy cle insurance well en ough to avoid feeling th at the sugar-co ated insurance policy you j ust purchased has a lemon in side. N o matter wh at you think of insuran ce, th ere ' are th ree things you should know. Fi rst, no m atter how go od your credi t, y ou cann ot ge t a loan to bu y y ou r new motorcy cle withou t in sur an c e. Secon d , th e S tat e of Cali fornia an d forty-five o ther states have Fi nancial Responsibility La ws. T hese law s requ ire you to p ut up securi ty when invo lved in an acci dent, o r else h ave ins urance. Third, th e other p ar ty inv olved in your accident can sue yo u for d am ages, even t ho ugh the phy sical d am age is sma ll. T he insurance company b ecom es a strong ally in such a case .. Let's loo k at insurance and credit first. Under ' the p resen t system of finance, possession of p ro p er ty w it hout fu ll ownership is o nly possible because the lende r can p rotec t his interest wi th insu ran ce. The loan co mp an y does n o t wan t you to crash " th eir" mo to rcycle. They d o no t w an t to see it stolen. But if somethi ng bad does hap pen to the m o to rcy cle befo re you have paid off the loan, th e ins urance th ey have forced you to bu y will p ro tect them from any loss . You p ay fo r th e loan co mpany's protection as par t of the cost of b orrowing m on ey . This prote ction is two-side d . Fo r instance, y ou don't want to make payments on a mo torcy cle whic h dis appeared fr om th e parking lo t y este rday . In surance will ease y o ur obligation to the lo an co mp any. If -you crash , in surance will help repair the motorcycle as w ell as y ou. The loan company will require y ou to purchase collision, deductible, and co mp rehensive fire and theft insurance to p ro tect their inve stment, and yours. While the lo an co mpany co nc erns itself with your proper ty, th e S tat e of California among other ju risdic ti ons concerns itself with the co nse q ue nc es of y our involvement in an 'accid en t. Along with all other western st ates, California h as en acted Financial Resp on sib ili ty Laws. Those of y ou who will never have an accident d o not h ave to worry. Th e Fin aricial Responsibility Laws come into effe ct when dam ages exceed two-hundred dollars . The law requires all p arties involved in an acci de nt, regardless of fault, to post bond for th e damage inflicted, or proo f o f fu ture responsiblity, or both. The S tate of Oregon ha s n o mimmum damage figure : y ou mus t always post bond. These states co nsi der i ns u ra nc e c overage an acc ep table substitute for b ond an d p roof of fu tu re resp on sibility . So strong pe rsuasion to buy insu rance exists th ro ugh the laws of y o ur s tate. The legal sys te m th a t con tai ns these law s evolved from English Common Law, a legal system th at pl aces grea t importance on individual ri ghts an d individual resp onsibility . T he word resp o nsib ili ty keeps appearing in an y dis cussi on of in surance. Responsibility is the ke y stone of th e co nc ep t of liab ility, wh ich Webs ter defines as "the st a te of b ein g legall y re sp onsi ble to make good an y loss or damage th a t oc curs in a ransaction.. " a~eFs named the IegaJ pro cess fo r de'termin iI>g res p o n slli ili ty andUforcing · m • responsible p arty to make go od on the loss "bringing suit fo r damages". Insurance comp anies co nside r coverage on this process much more importan t than c ollision o r theft coverage. Co llision and theft deal wi th rel atively small, easily me asured amounts of money . Damage suits, or liab ility, de al with the intangibles of medical bills and mental anguish. The costs are higher , and directed toward a more general target : your en tire estate . U n f o r t u n a t ely, property-oriented Am eric an so ciety looks at sp ecifics. Like y ou or I, Joe Biker thinks about protect ing h i s mot or cy cle with in suran ce. He may also think about protecting his body . He wants insurance to pay his hospital bills and replace his wrecked motorcycle. Joe doesn' t think about his personal liability. The usu al motorcycle insurance buyer tries to save money by buying th e minimum amount of liabili ty coverage. In most Western states, the minimum amoun t is 15,0 00 dollars property damage ; known as 15/30/5. You can easily see wh ere th e emphasis li es . Prop erty damage settlernen ts gen erally cost th e insurance comp any much less than liability settlemen ts. Medical cos ts an d other When you convert you r pride and joy into this, escape alive. in tan gib les can run a liability settlemen t up to fifty, o r evern five-hun d red thousand dollars. You could never affo rd the cost of such a settlement as an individual, Like Joe Biker, y ou may hav e pumped gas to buy th at four-cylinder Flash. Yo u may have gon e into deb t to buy a deadly, new Wolfpack motocrosser . You do not wan t to add to th at burden. Man y young mo torcycle buyers would prefer to save some money "lind take their chances. They d on 't want to add seventy-five dollars a ye ar to the price of that Wolfpack , bu t th ey p ack t o. They p roceed to buy th e minimum liability. Liability coverage is the on ly area where the insurance buyer has a ch oice on his motorcycle policy, and he will make the most of it. He ma y also b e making a mistake. The ex tra liabili ty coverage d oe s not ad d m uch cos t - to the p rice of a premium, and offers gre ater ben efit s for you r dollar than the bulk of th e coverage you buy . I t is as close as you can come to a bargain in m o torcy cle insurance . In su rance m ay p rove to be a b lessing if n ot a bargain in ano ther area: th e co ur ts. The w o rkings of ou r legal system make it nece ssary to accuse so meone o f resp onsibility in an y situa tio n of loss . Sometimes lawyers will file kn owingly false suits under the th eory th a t the bes t defen se is a go od o ffense . Su ch a suit m ay acc u se th e mo torcyclist b ecause he usually ab s th e flim siest protection an d smallest reso urces. Even if the suit is false, y ou must mount a legal defense. If y o u have insurance, your in teres ts then OlnClde witll til interests of t1ie