Motorcycle Insurance
How Much Motorcycle Insurance Coverage Do You Really Need?

Motorcycle insurance can cost a small fortune, so you understandably want to find the best rate possible on coverage. One of the top factors that will impact your motorcycle insurance rates is the amount of coverage you purchase. Some budget-minded motorcyclists may be inclined to drop coverage to the lowest level possible to save money on their motorcycle insurance. While this is one option that is available to you, it should be done with care. Before you decrease your coverage limits, think about these points.

The State’s Minimum Requirements
One of the first factors to consider before decreasing the amount of motorcycle insurance you purchase is your state’s minimum legal requirements. In all states, motorcyclists must purchase a minimum amount of coverage to legally operate their vehicle, but this requirement varies from state to state. The state’s legal requirement should be viewed as an absolute minimum amount of coverage you should purchase, but there are many instances when it makes financial sense to purchase additional insurance.

Your Financial Liability
As a motorcyclist, you are financially liable for any damages you cause while operating your vehicle. This includes property damage, medical expenses for injuries, vehicle repairs and more. Your motorcycle insurance policy will pay out for these expenses if you file an approved claim, but the insurance coverage will only pay an amount up the established limit that you have purchased. If you owe more money than your insurance company pays for, you will be financially liable for the additional amount owed. It can be difficult to determine how much money you may owe in the event of an accident, but the last thing you may want to deal with is having to pay out of your own pocket if you are in an accident with motorcycle insurance

Your Financial Abilities
Because there is a possibility that you would have to pay out of pocket for damages, it is important to review your financial means to do so. Consider the amount of cash you have available in liquid assets as well as the value of assets that you could convert to cash if necessary. In many instances, motorcyclists simply do not have the financial means to pay out if they are involved in an accident. If this is true for you, it may be worthwhile to pay for additional motorcycle insurance coverage.

A smart idea is to talk to your representative about how much motorcycle insurance coverage you may need. Some states have higher minimums, and you may find that you only need to bump up coverage limits by a small amount. However, if you live in one of the states with a very low minimum insurance requirement, you may find that it is beneficial to double or even triple the amount of coverage that is legally required. You may consider alternative means to lower coverage, such as increasing the premium or shopping around for the best rates and for discounts that would be applicable to your policy.

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