Motorcycle Insurance

Although it isn't something that most like to discuss, you need to be prepared if you get into a motorcycle accident in California. Motorcycle insurance is crucial to protecting yourself and your family from financial ruin. A motorcycle accident in California could result in overwhelming loss if you don't have the coverage you need with motorcycle insurance. California bikers should know what the different kinds of coverage provide.

Don't wait until you have a motorcycle accident to discover you don't have a full coverage policy when you thought you did. Too many California bikers find out they weren't fully covered when they make a claim. A full coverage motorcycle insurance policy means it has coverage in all categories, not full coverage in all categories. California bikers should know exactly how much coverage they have in all categories since it varies by motorcycle insurance policy. You don't want your personal assets on the line or not be fully compensated for damages sustained at the fault of another.

Liability, property damage, uninsured/underinsured, collision, comprehensive and medical payment are the standard motor vehicle insurance categories. An umbrella policy provides additional protection, should you choose to add it to your California motorcycle insurance policy.

Below is more information on the type of coverage each category provides:

Liability: If you're found responsible for injuring another party with your vehicle

Property damage: If you're found responsible for damaging another party's property with your vehicle

Uninsured/underinsured: If you're injured by another party and the other party does not have insurance or adequate insurance to compensate you

Collision: Cost of repairs to your vehicle regardless of who is responsible for the damage

Comprehensive: Your motorcycle and its parts from theft and damage caused by vandalism and, depending on the specifics of your policy, by flood or fire

Medical: Cost of your medical bills.

Umbrella insurance: For those rare situations in which the damages are extensive

LIABILITY COVERAGE

Liability insurance covers you for any personal injury damages you cause to someone else, such as bodily injury, medical expenses, loss of earnings, and pain and suffering. Minimal coverage is required in many states, such as $15,000/$30,000. The "$15,000/$30,000" means if you're found responsible for causing someone injuries, a total of $15,000 is available for each person injured up to a total of $30,000 for each accident if there is more than one person injured. This figure is very low and even a minor accident could easily result in damages exceeding this minimum.

PROPERTY DAMAGE

Property Damage covers you for the cost of any damages you cause to another's property. Many states require minimal coverage, such as $5,000, but these minimum requirements are very low and provide little protection for you. Even a minor accident could easily result in damages exceeding those limits. If you don't want to risk paying out of pocket for damages or have assets to protect, you should reevaluate your limits (see below for recommendations).

UNINSURED AND UNDERINSURED COVERAGE

Uninsured/underinsured coverage protects you if another party with insufficient insurance was found at fault and you are injured or your bike is damaged. The other party could have no liability or property insurance or insufficient limits to fully compensate you for your damages. Since there are hundreds of thousands, if not millions, of under-insured drivers, this coverage is extremely important. And because most people with the minimum requirements have very little assets, recouping the cost of your damages is difficult.

With uninsured/underinsured coverage if you are injured by a negligent driver who has no insurance, your own insurance company will pay for your proven damages up to your uninsured limits.

If the other party has some insurance but insufficient limits to fully compensate you for your damages, your insurance company, in some states, would pay up to your underinsured limits, over and above the other driver's liability limits. For example, if you had $100,000 in underinsured coverage (see below for recommendations) and the other party only had $15,000 in coverage, and your proven damages are at least $115,000, your own insurance company would pay you your full $100,000 limits for a total recovery of $115,000.

In other states, your insurance company will only pay the difference between the coverage extended by the other driver's policy and the underinsured limits of your policy. For example, if you had $100,000 in underinsured coverage (see below for recommendations) and the other party only had $15,000 in coverage, and your proven damages are at least $100,000, your own insurance company would pay you the difference of $85,000 after the other party's limits are paid to you. Your total recovery would be $100,000.

COLLISION COVERAGE

Collision insurance covers damages to your bike. Review your motorcycle insurance policy to ensure you have sufficient coverage to fully repair your bike. We frequently see riders not getting compensated for the thousands of dollars worth of added custom equipment or a custom paint job. Unless you specifically name these items, most likely they are not covered by your policy. Some insurance companies offer this additional coverage as an option, but generally, you have to ask for it. Most policies have a deductible of $250, $500, etc., which requires you to personally pay the deductible amount before your insurance kicks in.

COMPREHENSIVE COVERAGE

Comprehensive covers your motorcycle and its parts from theft and damage caused by vandalism and generally, by flood or fire. Comprehensive is usually subject to a deductible also.

MEDICAL PAYMENT COVERAGE

Medical payment coverage pays for medical expenses related to the accident up to the limits of coverage. If you have good health insurance, you may want to opt out of this coverage.

UMBRELLA POLICY

Depending on your assets and net worth, you may want to consider an umbrella policy that provides additional liability coverage of, generally, one million or two million dollars above and beyond the limits of your underlying policy. These policies are relatively inexpensive relative to the protection they provide. Generally, you must maintain high underlying limits to qualify.

THE BOTTOM LINE

It's crucial you understand your coverage and limits. You need to ensure they are sufficient for your individual situation. You should discuss your needs with a qualified California motorcycle insurance broker or insurance agent, or several, who understand how coverage applies and can advise you accordingly. We strongly recommend minimum bodily injury liability limits and uninsured/underinsured limits of $100,000/300,000 and minimal limits of $50,000 for damage to others' property.

It's also important to discuss and understand the areas in which your insurance company specifically excludes coverage. You should also discuss how the insurance may apply differently in no-fault states.

Remember a full coverage does not necessarily mean sufficient coverage. Make sure you are properly protected.