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Collision Insurance For Motorcycles
As you shop around for motorcycle insurance, you will probably notice that the most commonly required motorcycle insurance is liability insurance, which only covers other people's property damage or injuries after an accident you cause. If you want insurance that covers your own property damage or injuries, you can purchase different types of optional motorcycle insurance coverages that are commonly available.
One such optional coverage is collision coverage, which can help pay for damages to your bike after a traffic accident.
How Collision Motorcycle Coverage Works
Your motorcycle insurance collision coverage will help pay for repairs to your bike after a traffic accident.
Typically, your collision coverage will pay only up to the current cash value of your motorcycle after you have paid your deductible (see below). It is important to understand that the current cash value of your motorcycle might be considerably less than what you actually paid to purchase it.
Your motorcycle insurance will not pay out until you pay your deductible (your out-of-pocket expenses towards a claim). Typically, companies will offer different deductible options. Keep in mind, however, that while choosing a higher deductible will lower your motorcycle insurance premium, you may have a difficult time meeting the deductible if it's too high for your budget.
Who Needs Collision Insurance?
If you own a motorbike that is worth more than it would likely cost to repair it, you should consider purchasing collision coverage. On the other hand, if your motorbike is worth less than what it would cost to repair―in which it would be considered a total loss in an accident―you probably don’t need collision insurance.
For example, if your bike is worth $1,000 but it would take $1,500 to repair damage to the bike body, your insurance company will only compensate you for what the vehicle is worth, and collision insurance is superfluous.
However, if you own a new or highly customized bike with a Kelley Blue Book value of $15,000 or more, it will likely cost less to repair the bike than the bike is worth, and collision insurance will cover the cost of repairs.
For this reason, it is important to know what your motorcycle is worth, and to be aware of how the value is changing over time or with the addition of customized parts. You can access the Kelley Blue Book online to find values of various bikes.
For classic bikes, contact your insurance agency directly to find its estimated worth.
Custom Parts and Equipment (CPE) Motorbike Insurance
In addition to collision insurance, highly customized bikes require accessory coverage for motorcycles, which is also known as custom parts and equipment (CPE) insurance.
The purpose of CPE insurance is to cover damage to custom equipment added after the motorcycle has left the factory floor. Custom equipment added after the bike has left the factory is not covered under your collision or comprehensive insurance policy. For this reason, it is important to have adequate CPE coverage for all customized parts and motorbike accessories.
Consider Comprehensive Motorcycle Insurance
You might also consider comprehensive insurance for your motorbike. Unlike collision insurance―which covers damages due to collisions only―comprehensive insurance covers damages due to theft, vandalism, natural disasters, and weather conditions, such as hail, fire, and flood.
Finally, if it seems that adding additional types of insurance to your liability coverage will get too expensive, remember that there are plenty of ways to save money on motorcycle insurance.