Factors That Affect a Motorcycle Insurance Quote

It is no surprise that insurance companies prefer safe motorcycle riders as their customers. A business of risk assessment, many factors go into the calculation of the premium, the cost of the insurance. Riders make regular premium payments for coverage against losses that may be faced due to an accident, theft or vandalism. Similar to other kinds of insurance such as automobile, health, or life insurance, motorcycle insurance does not have one fixed price for all riders, with several factors affecting the price.

Not only do a variety of factors such as age, driving record, and type of motorcycle affect motorcycle insurance quotes, but riders in the market for a new policy should not assume that they will receive similar quotes from each company. In fact, quotes can vary greatly from company to company, which is why it is important to understand the factors that affect pricing, and then shop around to find the appropriate coverage at the best price.

Type of Coverage

One of the first decisions a rider must deal with is what type, and how much motorcycle insurance coverage is needed. A huge factor in determining the rate quote, most states require a minimum amount of liability coverage before taking a bike out on the road. In the event that an accident is the policy owner’s fault, liability insurance will cover the cost of damages to the other party, which may include bodily injury as well as property damage. However, while the minimum coverage may be cheaper, it may not provide enough protection and cost a rider more in the long run.

Motorcycle owners will have a higher rate quote if they choose to expand their coverage by purchasing a policy with higher limits or additional types of coverage. Some additional coverage types include comprehensive, collision, and uninsured/underinsured motorist:

• Comprehensive coverage usually protects motorcycles from damages due to theft and vandalism, or weather-related incidents such as flooding or wind.
• Collision covers damage from an accident with another automobile or object, such as a building or pole.
• Uninsured/underinsured motorist coverage usually covers medical costs or damages to a motorcycle resulting from an accident where the other driver is at fault and does not have any, or enough insurance.

Additional types of coverage that can increase the cost of insurance include medical payments, guest passenger liability coverage, custom parts and equipment, and roadside assistance, among others. Each type of coverage should be carefully considered to avoid over-insuring and incurring unnecessary expenses.

Key Individual Factors

Along with the type and level of coverage selected, insurers use many individual factors in determining a rate quote, which vary from biker to biker. The following are the key individual factors that an insurer considers:

• Age: Similar to car insurance, the age of the driver is a big factor. Younger drivers tend to have less experience on the road and should expect higher rates. In addition, younger riders are perceived to drive faster than older riders, increasing the risk of insuring this age group.
• Gender: Along with age, younger males between the ages of 16 and 25 years old are considered higher risk than females of the same age, generally driving more miles per year and receiving more speeding tickets. As a result, males in this age group tend to face higher premiums. Some companies may always offer women lower premiums, although the rates tend to even out with age.
• Riding Experience: New riders are more risky to insure than experienced ones, so first-timers who just purchased a new bike should expect higher rates. To try and balance this higher cost, insurers often give discounts to first-time riders who complete motorcycle classes. Insurers will want proof of completion, so it is important to remember to keep copies of any certification.
• Driving Record: Insurers always check a rider’s driving record and this is one of the most important factors when issuing a quote. Not surprisingly, the more traffic tickets and involvement in accidents equates to higher risk and consequently, higher rates. As such, riders with clean records are usually quoted lower rates.
• Credit History: Insurance companies may look at an applicant’s credit history as a factor when determining the rate quote. The cleaner the credit history, the lower the rate. Put simply, insurers consider riders who are not financially responsible with bills more likely to be less responsible when driving a motorcycle on the road.
• Location: Where a rider lives and works can be a big factor in determining insurance rates. If a rider lives in an urban area with a higher crime rate and more vehicles on the road, higher premiums can be expected compared to those in a rural area. Insurers may look at the neighborhood’s crime, accident and theft rates, and whether or not a rider has invested in a secure location to store the bike or installed any anti-theft devices. In addition, certain states tend to have higher rates than others.
• Occupation: Insurers inquire about the occupation of an applicant to help with their risk assessment. Basically, riders who have jobs that are considered safer, such as educators, have lower premiums. Other jobs considered to be lower risk include scientists, actors and artists. Insurers tend to consider higher risk jobs as those that are stressful and require long hours, such as doctors and attorneys.

As with any type of insurance, consumers need to shop around. Rates can vary greatly from insurer to insurer, with each company setting its own rates for coverage. Talk to existing insurance providers, family, friends, and search online. Taking the time to understand individual factors and research rates should pay off for riders in the long run.

Resources for More Information

• Insurance Information Institute Covers a broad range of topics including determining the price of an automobile policy.
• DMV.org Private company sharing knowledge about DMV-related topics including motorcycle insurance rates.