How to: Buy motorcycle insurance

Originally published Feb. 12, 2017. Updated Sept. 3, 2018

Many of us buy our insurance in the spring, but many more buy it as the season is ending and we start thinking of storage and perhaps adjusting the policy for a parked motorcycle. All of us need to think about it during the season, to make sure we’re properly covered for the riding we’re doing.

There are two or three months of riding left in most of Canada, fortunately, but this means it’s time for a reminder of what to think about when your policy does come up for renewal, or when you realize that it’s falling short.

Motorcycle insurance: It’s an expense most riders dread, but it’s a necessity in Canada. Given that everyone has to sign up for insurance to legally ride on the street, there are many opinions on how to go about it, ranging from “admit nothing, pay as little as possible,” to “make sure you’ve covered your butt for every eventuality.”

Like any purchase, signing up for motorcycle insurance involves a certain amount of personal discretion and understanding of risks and rewards; however, we’ve got a few tips to help make the process easier.

How to buy motorcycle insurance

1) Make sure your application is accurate

Do you have any speeding tickets in the recent past? How many licensed motorcyclists are in your house? Will you be storing the bike inside, or outside? The sales agent will ask you all these questions, and more; if you give an incorrect answer, you could pay the price. The last thing you need is to have insurance on your new sportbike canceled a couple of weeks after buying it, when the insurance company finds out you neglected to mention a few speeding tickets. And you certainly don’t want to have your bike stolen, then have your payout denied because you had the machine under a tarp in the backyard instead of locked away in a garage.

“Sometimes riders will exaggerate the amount the bike is worth or their level of experience when buying insurance,”  says Daryl Brown of www.motorcyclelawyer.ca. “Sometimes this is an innocent mistake and other times it is not. If someone attempts to falsify information on their application and later makes a claim, they risk losing the policy or being found liable for fraud. Applications for insurance are legal documents and everyone should take care when filling out the forms.”

2) Make sure you’re covered by your policy

How much will your policy pay you, if you’re injured in a crash and the other motorist’s insurance is insufficient, or if they don’t even have insurance? Your policy’s Accident Benefits (or some similar name) will cover your lost wages, your medical expenses, and (in a worst-case scenario) death and funeral expenses. Take a look at this number; if it’s not high enough, talk to your insurance agent about upping the coverage.

“An additional ‘excess’ or ‘underinsured’ policy can help protect an injured motorcycle rider from an underinsured or uninsured motorist,” says Brown.

“In Canada, most of us live near the border to the United States. Drivers in the US can operate their vehicles with little or no ‘third party coverage’ … If the driver has little or no insurance, the ‘excess’ or ‘underinsured’ policy will increase the offending motorist’s coverage to a much higher amount. This is very important because if someone doesn’t have enough insurance, they usually don’t have any assets to pay for the rider’s injuries.”

You may already have something like this on your policy, under another name (my insurer calls it the Family Protection endorsement), but you should ask.

Another factor to consider: Even if you’re not at fault in an accident, your insurer may not pay out immediately if they don’t know who to pursue for damages. For instance, if your motorcycle is damaged in a hit-and-run, you may have to wait for your money if the at-fault driver makes a successful getaway, and your insurer can’t find them. This may be a good reason to run a helmet cam or dash cam. Just don’t do anything on-camera that your insurer can use to deny you coverage.

3) Make sure you have sufficient third party coverage

If you’re on the hook financially in the aftermath of a crash, after running into another motorist or a pedestrian or some similar incident, you want your policy to cover the costs. If you’re held responsible for $1 million in damages, and you only have $500,000 in coverage, you’re in trouble.

It’s true that a motorcycle can’t wreak as much damage as a car or truck, but don’t fool yourself into thinking you should carry minimal coverage as a result. Any insurance representative I’ve ever asked recommended $1 million as the minimum liability coverage, and it doesn’t necessarily cost much more than paying for the least amount possible. Many companies won’t even insure your motorcycle with less than $1 million liability coverage.

Another factor to consider: If you’re riding frequently in the US, you might want to beef up your coverage, as the exchange rate means a crash in the US could be very expensive (not to mention US health-care and litigation costs). My own insurer recommends maximizing third party insurance if riding in the US. It cost me only $13 a year to jump from $1 million in coverage to $2 million, so I did so.

Depending what bike you ride, you could find it much more expensive to maximize your third party coverage, but it’s worth looking into.

4) Payment options

Month to month, bi-monthly, or yearly? Most insurance outfits offer a few different payment plans. Sometimes you pay a bit less with a yearly payment; otherwise, we’re not really sure of any advantages to paying in any specific fashion, unless you’re using it as a way to build a credit rating.

5) Fire/theft coverage

If you’re financing your motorcycle, there’s a good chance you may be required to carry this coverage. If you’re not required to carry fire/theft coverage, then do a cost-benefit analysis. How likely is your motorcycle to be stolen, or burned? If that did happen, how much would it cost to replace? Would it be cheaper to invest in a good bike lock, or a storage shed?

If fire/theft costs you $500 extra a year, and your bike is only worth $2,000, then it might not make much sense, especially if you have a high deductible. If it’s worth $20,000, then it’s a different story.

6) Collision coverage

Just like fire/theft coverage, you will be required to carry collision coverage if you finance your motorcycle.

Then, again, it comes down to a cost-benefit analysis. Is it worth paying $500 a year to have your beater bike replaced after a crash? Probably not. Is it worth paying $500 a year for collision insurance to fix or replace your CVO Wide Glide? It probably is.

Remember, just like fire/theft coverage, if you have a high deductible, it will keep your payments down, but if you actually make a claim, you’ll have a big chunk to pay out-of-pocket first.

7) Find out if your gear is covered

Many insurance policies cover some of the cost of replacement motorcycle gear. Others lump it into your motorcycle coverage, which really doesn’t offer much benefit, as you’ve also got to pay for damage to the bike out of that money. If you’ve paid for a quality jacket, riding pants, helmet, and gloves, then you know the cost to replace this stuff can be high. See what competing insurers have to offer and weigh the value of gear replacement before signing on the dotted line.