The Cycle of Insurance: The Good and the Bad

You are looking to save money. You have cut costs in several different areas of your life; however one decision sticks out like a sore thumb. Do you sell the truck and buy a motorcycle? The motorcycle is much cheaper right? It’s a great way to save money? While true, motorcycle insurance is one thing you can expect not to drop in cost.

Motorcycle insurance covers a driver against two basic events – accident and theft. Third party insurance for motorcycles is compulsory despite most claims involving motor bikes occurring as “solo events.” This happens because the driver is usually on their own when an accident occurs and generally presents no pose of danger to third parties or other vehicles.

Fire and theft are where rates really blow out of proportion. Insurance companies are unwilling to cover bikes against theft, because they can be stolen quite easy. Fire is also something that insurance companies have problems covering. If you want extended coverage, your premium can spike up in price quite quickly.

Insurance companies are also hesitant to provide accident coverage. Motor bikes are quite dangerous in regard to accidents. Motorcycle drivers are put in danger because they do not wear a seat belt and their entire body is exposed in the open. If they collide with another force, the odds of that force being more powerful are quite high. Unfortunately, motorcycle accidents usually leave the driver in critical and sometimes fatal care.

Insurance companies must remain objective, and not take every motorcycle policy to the extreme. When calculating costs, the insurance company will factor into the driver’s age, experience on a motorcycle, and size of bike and engine.

The insurance company will also factor into the individual’s driving record. How many speeding tickets have you acquired? How many past accidents have you been involved in? These factors weigh in heavily on premium costs and decide how big of a risk you posses.

Last but not least, a bike owner will receive a lower premium if they use the motorcycle more for a recreational activity and less for everyday use. For example, if your primary mode of transportation is a truck and you just own a bike for pleasure, chances are your premium will drop.

Graham McKenzie is the content Syndication Manager at insurance123.co.zaSouth Africa’s leading Motorcycle Insurance information portal