Motorcycle Insurance Basics

History encountered the first motorcycle in the late 1800s . This bike ran on steam power and had little power or comfort. Today's motorcycles use similar combustion engines to other vehicles and can reach high speeds. They range from sporty to comfort to racing bikes and are extremely popular in the United States.

Purchasing insurance for a motorcycle is very similar to purchasing auto insurance, but it does require a separate policy. Different states have different requirements for motorcycles. Motorcycles are inherently more dangerous than autos - therefore the risk factors are greater. However, most bikes are less expensive, making the total insurance cost less than that of a car.

Motorcycle Statistics

Since first coming on the scene in the late 1800s, with steam powered engines, motorcycles have captured the hearts and minds of many an adventurer.

The number of registered motorcycles in the United States has risen every year over the past decade reaching 8,454,939 in 2012. That's approximately one motorcycle for every 36 people in the U.S. While Texas and Florida have the most total registered motorcycles, per capita, South Dakota is the most active motorcycling state.

Unfortunately, high numbers of registered motorcycles on the road mean high numbers of motorcycle accidents. After a significant decrease in motorcycle related fatalities from 2008 (5,312 fatalities) to 2009 (4,469), the number of fatal crashes has steadily risen each year through 2012, decreasing to 4,381 in 2013 (the last year that data is available for). A total of 93,000 people were injured from motorcycle crashes in 2012. That year the fatality rate for motorcycles was 58.63 per 100,000 registered vehicles. In comparison, there were only 9.66 fatalities for every 100,000 passenger cars.

The steadily high number of injuries and fatalities for motorcycle riders highlight the importance of rider safety and caution. It also shows the importance of having motorcycle insurance on your ride.

Minimum Coverage Requirements

As with most vehicles, motorcyclists are required by most states to carry a minimum amount of liability insurance. Liability insurance is protection for the insured against claims or lawsuits from other drivers who may be involved in an accident. Each rider must know the minimum coverage laws for their state when shopping for motorcycle insurance.

Despite the high number of accidents with motorcycles, not every state requires motorcyclists to have full coverage. A few states (Florida, Montana and Washington) do not require coverage at all.

However, it's advisable to get more than the bare minimum of insurance even if its not required. Knowing what is required is a good starting point.

The chart below shows state requirements, broken-down into their three coverage parts.

  1. Minimum bodily injury liability maximum for one person.
  2. Bodily injury liability maximum for all injuries.
  3. Property-damage liability maximum requirement in each state.

It's important to note that buyers wanting to finance a bike are usually required by the lender to have coverage regardless of state requirements.

Motorcycle Insurance State Requirements

State Minimum liability limits Motorcycle insurance required?
Alabama 25/50/25 Yes
Alaska 50/100/25 Yes
Arizona 15/30/10 Yes
Arkansas 25/50/25 Yes
California 15/30/5 Yes
Colorado 25/50/15 Yes
Connecticut 20/40/10 Yes
District of Columbia 25/50/10* Yes
Delaware 15/30/10 Yes
Florida 10/20/10 No
Georgia 25/50/25 Yes
Hawaii 20/40/10 Yes
Idaho 25/50/15 Yes
Illinois 20/50/20 Yes
Indiana 25/50/10 Yes
Iowa 20/40/15 Yes
Kansas 25/50/10 Yes
Kentucky 25/50/10 Yes
Louisiana 10/20/10 Yes
Maine 50/100/25 & $1,000/person for medical payments Yes
Maryland 20/40/15 Yes
Massachusetts 20/40/05 Yes
Michigan 20/40/10 Yes
Minnesota 30/60/10 Yes
Mississippi 20/50/25 Yes
Missouri 25/50/10 Yes
Montana 25/50/10 No
Nebraska 25/50/25 Yes
New Hampshire 25/50/25 Yes
New Jersey 15/30/5 Yes
New Mexico 25/50/10 Yes
New York 25/50/10 Yes
Nevada 15/30/10 Yes
North Carolina 30/60/25 Yes
North Dakota 25/50/25 Yes
Ohio 12.5/25/7.5 Yes
Oklahoma 25/50/25 Yes
Oregon 25/50/10 Yes
Pennsylvania 15/30/5 Yes
Rhode Island 25/50/25 Yes
South Carolina 25/50/25 Yes
South Dakota 25/50/25 Yes
Tennessee 25/50/15 Yes
Texas 25/50/25 Yes
Utah 25/65/15 or $65,000 single limit Yes
Vermont 20/50/10 Yes
Virginia 25/50/20 Yes
Washington 25/50/10 No
West Virginia 20/40/10 Yes
Wisconsin 25/50/10 Yes
Wyoming 25/50/20 Yes

Source: Insurance Information Institute, 2009

Types of Coverage

The following are the coverage options available on most motorcycle insurance policies

Liability

The most basic type of insurance protects the insured against claims and lawsuits from others in the event of an accident. In most states, certain minimums of liability insurance are required to register a motorcycle.

Collision

Collision insurance covers damage to the motorcycle in the event of an accident. The insurance company will cover the cost of repair or replacement for damaged parts after the insured pays the deductible. Coverage amounts go up to the value of the vehicle.

Comprehensive

Comprehensive insurance covers the motorcycle from damage created by anything other than a collision. Hail storms, falling tree branches, or vandalism would be covered under comprehensive insurance.

Custom, Classic, or Restored Motorcycles

Custom bikes or classic bikes are worth more than most standard bikes, but may not see much time on the road. It can be harder to find coverage for these motorcycles, but it's out there. For those bikes that are showroom-only, the customer can save money by trimming away the collision insurance and carrying comprehensive only. The good news? Since these are not used often, the premiums tend to be lower.

Finding Discounts

There are numerous ways to get discounts on motorcycle insurance. It can vary from company to company and policy to policy, but here are some typical discounts that motorcycle owners can use to lower their premium.

Training Courses

While nearly all states require riders to obtain a motorcycle license, the amount of training may vary. Some insurance carriers offer discounts for riders who take additional motorcycle safety and training courses, especially younger (under 25) riders.

Multiple Vehicle Discount

People who own more than one motorcycle, or have other vehicles covered by the same company, may qualify for discounts with that insurer. Call them directly to find out!

Clean Driving Record

Many companies will give discounts for drivers who have a history of good driving and few or no accidents or motor vehicle violations.

Motorcycle Organizations

Like AAA for cars, there are quite a few organizations for motorcyclists. These include the Gold Wing Road Riders Association and numerous other groups, ranging from advocacy groups to local riding clubs. Some insurance companies will offer discounts to members as a way to increase policy sales.

Lay-up Discount

For those who live in the colder states, a lay-up discount allows riders to save money during the winter months by keeping the bike off the road at designated times. With the roads unsuitable for motorcycle riding anyway, this is well worth taking advantage of. The catch? The bike must stay off the roads during the designated times, regardless of the actual weather.

Theft-recovery System Discount

Having a professionally installed radio or GPS theft-recovery system is a safety feature that can sometimes get a discount on comprehensive insurance.

Safety Equipment

Motorcycles equipped with airbags, anti-lock brakes, or other approved safety features may qualify.

Responsible riders who use a Department of Transportation approved helmet may also see discounts or other benefits on their insurance.

Insurance Policy Add-Ons

Custom Parts/Equipment

Most collision and comprehensive plans only cover the factory parts on a bike. If the rider adds on aftermarket parts and accessories, a custom parts and equipment policy could help cover that windshield or extra chrome.

Roadside Assistance

Roadside assistance can help out if the rider gets stuck on the road with a flat tire, bad battery, or empty gas tank. While it is usually not very expensive, it's worth making sure that this coverage doesn't already exist through another avenue such at car insurance or AAA. No need to duplicate.

Underinsured/Uninsured Motorist

Underinsured/Uninsured Motorist coverage helps to protect the insured from other drivers who do not carry liability insurance. In some states, this is a part of the mandatory minimum coverage. This coverage pays for medical damages, lost wages and may have options to cover the bike itself.

How to Find Insurance Coverage

There are many companies out there that offer motorcycle insurance coverage. Decide what kind of coverage would work best for your style of riding, your bike and your region. Once you know what you're looking for, test the waters and get different quotes. And don't forget to include the add-ons you'd like and any discounts you may qualify for before finishing.

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