The standard motorcycle policy includes liability coverage that is required by law if you own a bike. It also may include the following optional coverages depending on state statutes. Medical payments uninsured motorist coverage and damage to your covered motorcycle. It is principally designed to cover motorcycles that are owned by an individual or by a husband and wife who reside in the same household. This type of policy may also insure Trikes, Mopeds and Custom Bikes.
Common Insurance Terms
Liability – Liability is defined as the legal responsibility for injury to another or damage to their property. Whether someone is liable (legally responsible) for an accident is something that ultimately is decided by a court of law, if the adjusters and attorneys don’t agree on who is liable first.
Bodily Injury (BI) Liability Limit – The per person BI limit is the most the carrier will pay for all BI damages in any one accident. Bodily injury means bodily harm and includes medical expenses, all necessary costs of medical treatment for injury, past, present, and future; loss of income, loss of future earnings resulting from an injury; disfigurement, compensation for scarring and loss of looks; pain and suffering, this is an amount determined by a court to address the emotional or physical stress an accident or injuries caused.
Guest Passenger Liability – This provides coverage for bodily injury suffered by passengers on your bike because of an occurrence. This coverage may not be included in your policy and should be added to provide protection in the event a passenger is injured while riding with you while on your bike. Make sure you check with your agent to ensure this coverage can be added to your policy.
Property Damage (PD) Liability Limit
Property damage means damage to or destruction of property including the cost to repair the damage when the property is economically repairable; this is what is owed; actual cash value of damaged property, generally, the market value of the damaged property. If repair costs are more than the value of the property, then all that is owed is what the property is worth. Loss of use of property is included. This coverage includes the cost to rent substitute property, like the cost for a claimant to rent a car while their car is being fixed. It, also, includes loss of income suffered by a business if their building was damaged.
Split Limits – provides separate amounts of coverage for bodily injury and property damage. The amount of bodily injury coverage is further split into two sub-limits; a limit of coverage per person and a limit per accident. On a declarations page of the auto policy, the liability limits will commonly look like this. $100,000 bodily injury per person/$300,000 per accident and $100,000 property damage.
Minimum vs. Adequate limits – Every state has a minimum liability that a motorcycle owner must carry to register the vehicle. There is no way for you to limit how much you can be legally responsible for paying for damages. In some cases, judgments for damages can’t even be avoided by taking bankruptcy, so it is important to discuss with your agent the amount of coverage that you feel is adequate to cover your assets and future earnings.
Medical Payments – Medical Payments is a “no-fault” coverage. It pays for people being hurt in accidents, regardless of fault. The limit of liability for medical payments noted on the declarations page is a” per person” limit, and there is no limit to the number of people that can collect.
Uninsured/Uninsured Motorist Coverage – Uninsured/Underinsured Motorists Coverage is liability coverage that the policyholder purchases in case other people negligently injure the policyholder and/or damage the bike with their vehicle and do not carry any, or not enough, car insurance. To collect Uninsured Motorists coverage, the vehicle that injured the insured must be uninsured/underinsured, and the vehicle operator must be at fault.
Damage to Your Motorcycle – Physical Damage must be purchased to be in effect and coverage is provided for loss to your covered motorcycle.
It consists of two different coverages, Collision and Other than Collision. “Other than Collision” is often referred to as “Comprehensive”. Each coverage will have its own deductible. The policy pays the amount of the loss that exceeds the deductible.
Policyholders can purchase just Other than Collision coverage or both coverages. Companies won’t sell Collision coverage by itself due to the wording of the policy, and that collision is just considered an additional coverage to be comprehensive.
Definition of Collision – Collision is defined to mean the upset of the bike, the bike being overturned; the impact of the bike with another vehicle or object, this includes hitting something with the bike or the bike getting hit by something else, whether moving or stationary.
Definition of Other than Collision – Other than Collision specifically includes, but is not limited to, the following causes of loss:
- Contact with a bird or animal
- Missiles or falling objects
- Theft or larceny
(when a covered auto is stolen and then wrecked by the thieves, theft is considered the proximate cause, not collision)
- Explosion or earthquake
- Hail, water or flood
- Malicious mischief or vandalism
- Riot or civil commotion
- Breakage of glass.
If the insured has glass broken in a collision, they can choose to cover the glass under collision, so they don’t have to pay a second deductible on their other than collision coverage on the glass.
Additional Coverages – Your agent can help you with other coverages that are available on the motorcycle policy such as optional equipment coverage, trip interruption coverage, towing and labor coverage, roadside assistance, rental reimbursement, and replacement cost to name a few.
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