Having adequate insurance coverage is not exactly a controversial subject. You just gotta have it. Just as with your riding gloves, glasses, and cash, you wouldn’t leave home without it. Without motorcycle insurance you can lose your license and your bike, or worse, your livelihood, your house, and your financial future. Getting caught with your insurance pants down is a scary thing in the Age of Litigation. There’s also the high cost of bike repairs or replacement and soaring medical expenses to consider. In addition, you need to insure yourself against those scofflaws who don’t carry insurance. And then there’s the matter of bike thieves to add to the mix.

Motorcycle insurance can be a quandary and a pain in the pocketbook. So you need to do your homework, but, most importantly, you need insurance. From whom, what kind, and what level of coverage are factors to be considered in-depth if you are to ride free of insurance nightmares.

Q. How much insurance do I have to have?

Answer: While regulations vary from state to state, liability coverage is usually the mandatory minimum required, with liability (or bodily injury) meaning that you can pay for the damages you cause if you hit something or someone. How much liability coverage is a matter of choice. The minimum might get you official clearance, but if you’re at fault, the minimum can be way too minimal when the lawyers get to work. Various levels of insurance premiums afford you higher levels of coverage. Pay more, get more protection: a simple cause-and effect equation. To check on your state’s insurance requirements, log on to your local Department of Insurance.

Generally, you must have minimum liability coverage of $15,000 for one person, $30,000 for all injured parties in case of an accident, and $5,000 for property damage (car, motorcycle, house, and so on). Most companies (and logic) recommend expanding that coverage to $100,000/$300,000. While your bike is smaller than a car and would seemingly cause less damage, think about pedestrians or your passenger, and the coverage makes sense. Some companies (for example, Allstate) offer special “Passenger Protection” options.

Q. How do they figure out how much I have to pay for bike insurance?

Answer: Motorcycle insurance premiums vary from company to company and are computed as a function of the bike’s displacement, type (e.g., sport, cruiser, dirt), rider’s age and driving record, location (higher in urban areas), gender, marital status, whether you’ve taken an MSF course, and whether the bike is garaged or not.

Q. What is “collision” coverage, and how much do I need?

Answer: Collision means collide. It covers damage caused to the owner’s motorcycle from a collision caused by another vehicle. Collision coverage pays to fix your bike, minus your deductible, which comes from out-of-pocket money depending on your choice of amount-the higher the deductible, the lower your premium. If someone hits you, their insurance should pay for your repairs…if they have insurance. Best to cover yourself with collision coverage and ante up a deductible you can afford. There are lots of bad drivers out there with bad or nonexistent insurance.

Q. What about motorcycle medical coverage?

Answer: While car insurance comes with automatic medical coverage, bike insurers don’t offer automatic medical coverage, though some offer optional coverage as an added premium. Your personal health insurance has to cover you if you are injured while riding your bike or that of a family member living with you. However, if you happen to have borrowed a friend’s bike but also own a car and crash, incurring injury, your car insurance pays up thanks to an “extended medical benefits” provision. Check to see if you have it, as coverage varies from state to state. For example, California Medical Payments Coverage covers the cost of necessary medical care provided to you as a result of a motorcycle accident and applies no matter who is at fault, although the coverage is often limited to medical care you get in the first one, two, or three years after the accident. It’s also limited to a specific dollar amount.

Q. What is “uninsured motorist” coverage, and do I need it?

Answer: If you’re unfortunate enough to get hit by someone, you’ll wish you had it. It covers the insurance for your bodily injury caused by a hit-and-run driver or an at-fault driver who has no auto or motorcycle liability insurance. Check out the provision for uninsured and underinsured coverage (UM and UIM, respectively). A good rule of thumb is to pay for the same UM/UIM limits as your liability coverage. Your agent will always ask you whether you want the coverage, as it’s not mandatory.

Q. What if someone rips off my bike? Do I get a new one?

Answer: You can be compensated for a stolen motorcycle if you have “comprehensive coverage,” which takes care of fire, theft, falling objects, earthquake, missiles, explosion, riot, civil unrest, and vandalism. That compensation is based on the current book value of the particular bike if stolen and amount of repairs if damaged. Again, factor in your deductible…$50-$1,000. Here’s a caveat: Most likely you won’t be covered for those aftermarket billet mirrors or hand-tooled custom leather seat, so check. Some companies do offer specific additional coverage for accessories and custom parts. If you carry comprehensive or collision coverage with Geico, you are eligible for $500 coverage for optional accessories. (Note that Geico is available in all states except Delaware, Massachusetts, Michigan, and New Hampshire.) Bottom line for your add-ons: Remember to keep accurate records and proof of the cost of the items. Backing up your insurance with photos is also a smart move.

Another insurance factor to check is whether bike towing and car rental is part of the package.

Question. If I buy a bike by financing it, how much insurance do I have to have?

Answer: Usually full coverage. The finance company wants to cover all the bases in case something happens to the bike, as in an accident or theft. Full coverage can be a tidy chunk based on the bike, your age, driving record, whether the bike is garaged or not, and geographical location: Insurance costs more in Los Angeles, less in Tumbleweed, AZ.

Q. Any ways to cut my insurance costs?

Answer: Be over 30, have a perfect driving record, and take the Motorcycle Safety Foundation safety course. You have no control over your age and (we hope) a bit more over your DMV record, but the MSF course is available for anyone and usually gets you an insurance discount. Alarms and theft-recovery systems such as Lojack can get you a discount. Many companies offer a number of other discounts, including membership in certain bike organizations, senior citizens, multiple vehicles, and so on. Check with your insurance rep.

Q. Should I report even small fender-benders to my insurance company? And when do I call an attorney?

Answer: Insurance companies say to report any accident immediately. They even give you little cards to carry to fill out with the pertinent information. You might not report it, but the other person might, despite what you agree upon at the scene. If there is physical damage or injury, many states require the filing of an additional form, often sent to you by your insurance company. As far as calling an attorney, that’s your choice. In the event of sustaining physical injury (often likely in a bike mishap), an attorney is basically mandatory, no matter what side of the mishap you were on fault-wise. Check for motorcycle-specific lawyers; there’s a bunch.

Q. I have a rare 1907 beltdrive Harley. I think it’s worth a lot of dough. Can I get it insured?

Answer: For antique-bike fans, insurance costs and coverage vary from company to company. Age, make, and model are factors. Sometimes certified appraisal is required. Remember, most antique-bike insurers (and an “antique” is just 15 years old for some insurers) allow only a certain amount of annual miles (frequently 2,500), and the bike can only be ridden to events and not as transportation.

Gone In Less Than 60 Seconds

California topped the charts as the state with most bikes stolen in 2005. It’s a matter of numbers, of course. California has more riders than many other states, but being No. 1 in this category is nothing to cheer about, especially if your insurance is not up to snuff.

According to the National Insurance Crime Bureau (NICB), the top 10 states for snatched bikes were as follows:

Other stats include a total of 70,613 ripped-off bikes, which translates to a loss of more than $434 million to bike owners and the insurance companies. Only 25 to 30 percent of stolen bikes are ever recovered.

NICB has tips. Watch out for bikes titled as “assembled vehicle,” and, if you can, get your insurance agent to check it out before buying. Watch out for “replica clones” titled as a major brand but made from parts. Watch out for title histories with way too many manufacturers’ statements of origin for major component parts. Get an expert appraisal and/or insurance policy pre-inspection before purchasing and insuring a used cycle.

More info is available at www.nicb.org.

In Praise Of Appraisals:The Semi-Million-Dollar Custom Bike Insurance Question

You finally have your dream custom that’s cost blood, sweat, and maybe even an ex-wife. You’re worried some yahoo in his SUV might back over it in a parking lot and leave no witnesses. Or someone will snatch it and ship it to a customer in Slovenia. What’s up with custom bike insurance?

Here’s the short answer: First, check with your other vehicle insurer, be it car, boat, or truck. They might want to help you out since you’re already a customer. But some riders have reported three times the rate for a custom over a stock OEM bike. At last check of the Internet, we hear that neither Progressive nor Geico covers custom bikes. Farmer’s in California apparently does insure custom bikes, as does Markel Insurance Company in Pewaukee, WI (262-548-9880). Note that Markel (last time we looked) requires front and rear turn signals and allows for a maximum rake of 38 degrees. If you’re on the East Coast, another reported good source is Berglund Insurance (www.berglundins.com or 800-537-2555). Note they don’t insure for Arkansas, Hawaii, or New Jersey. Two companies that will insure custom bikes for liability are Allstate and Foremost. The word is that many companies will only insure custom bikes for actual cash value subject to limit on the policy. Stuff such as superchargers and turbochargers can raise insurance coverage walls.

Here’s The Longer, More Informed Answer:To get to the latest-breaking custom bike insurance news, we spoke with Bobby Royal, whose company, Royal Enterprises Inc., offers bike appraisals through a network of certified appraisers. He says the insurance industry has come a long way in respect to custom bikes, but there’s room for further progress. “One of the major issues is how a custom bike is defined. Depending on the insurance company you deal with, their idea of a custom bike may be a stock Harley with a couple of aftermarket pieces, another may be envisioning a bike that’s heavily modified, while still others focus on a concept of special construction.”

In other words, you need to determine the appropriate category under which your bike would fall to get the right coverage within an insurance company’s parameters.

“When you start modifying the frame or the frontend or engine, you need to communicate that information to your insurance company to stay on top of your game as far as coverage,” says Royal. He goes on to say that in the past the insurance industry has had trouble keeping up with the escalation in the amount of money people were spending on customizing their bikes. Whereas a few years ago motorcyclists were spending $500-$1,000 on their new parts, now it’s as much as $10,000, $20,000, and beyond. This affected the matter of the industry’s “agreed-upon value” of the bike. “That’s where my role as an appraiser becomes of value as a better way to document what makes up the market value of your bike,” says Royal.

As for the matter of the all-important appraisals, for many years insurance companies didn’t require an appraisal; basically, you’d just take photos and keep a price list as documentation in case something happened to your bike. That became a little sketchy for the insurance companies, which began to look toward professional appraisers to place a value on a particular motorcycle. However, just about anyone could say they’re a bike appraiser. For example, someone might have experience with antiques or cars and could offer their services for bike owners as well. Royal adds, “In 49 states there is no requirement for any license to appraise property (other than real estate, where a license is required). In effect, you can be a self-proclaimed appraiser. There is a method for determining values based on existing standards that’s used by all appraisers, but the difference is the level of the appraiser’s motorcycle expertise.”

At the end of 2005 there was an effort to certify motorcycle appraisers, the reason being that the industry wanted the consumer to have confidence in a motorcycle-specific appraiser. It would also benefit financial institutions and the insurance companies. Such appraisers focus only on motorcycles and demonstrate a proven expertise and professional knowledge of the subject. They also have passed written as well as field examinations in conjunction with the national Uniform Standards of Professional Appraisal Practices (USPAP), a national standard for both real property and real estate.

Royal stated that while most established and licensed production custom motorcycle companies offer their own insurance carriers to their customers, bike owners should still make sure the coverage is of the extent they want. Being insured can be viewed as a matter of degree, and being under-insured can be a rude awakening. It can also get tricky when you try to insure a bike from a smaller manufacturer or shop. Royal explains that this has been one of the most controversial areas of the motorcycle industry. “Custom bikes were being priced pretty much at what the market would bear. In some cases, $20,000 kit bikes have been sold for $40,000, but when you start talking to an insurance company, the value will be based on the kit price, so you might find yourself coming up short on insurance. An appraiser can come in on the presale to determine the value of the bike, which could be different from the market. An appraiser will look to see if the builder has an established market with a proven track record for that price to be accepted by an insurer.

“One of the biggest headaches we have had to deal with are the ones where the bike owner really believes he has a $60,000 custom and the appraisal comes back at $40k or $35k. They get real pissed. But the appraisal can be verified by the facts. If you can buy the same engine for $4,000, and you’ve been charged $8,000-well, that’s where the difference is.”

When you get into the mega-buck bikes, an appraiser can still be handy, says Royal. “The appraiser can really tell the insurance company why the bike is so rare and what went into the bike that’s in a category called ‘Rare of a Kind’ in the appraisal industry, a whole other ball of wax. You have to remember that an insurance company has two options, the first being they have the discretion whether they will pay a claim and how much they will pay. The second option in the case of a disagreement is that the bike owner can request that an appraisal be done. Based on those appraisals, the insurance company then determines how much it will compensate the customer.”

In the case of a stolen bike with nothing to appraise, the owner’s best defense is to keep the original appraisal, including photos and documentation. For the guy who builds his own bike in his garage, spending great gobs of time and money, it would be to his advantage to have an independent appraiser come in and document his effort. “For awhile some bike builders were telling customers and insurance companies they were appraising their own bikes. Insurance companies would say just take a few pictures and add up the price list to determine the value. The only thing I can say is ‘buyer beware.’ The whole idea of appraisal is to get an unbiased, disinterested opinion about a particular motorcycle,” states Royal. “And it should be based on a flat fee regardless of value, not a percentage or graduated fee based on the bike’s value. And the appraiser also has to document that he has no vested interested in owning or buying the bike.”

Obviously a specialist in motorcycle appraising is the way to go, says Royal, because you will get a more accurate accounting of your bike as documentation for any insurance claim, and the certified appraiser can also testify in court on your behalf. “You can get appraisals over the Web for $20 to $30, but you get what you pay for: a lot of information taken straight from the NADA book, and an appraisal that often doesn’t take into consideration any custom parts. The MAA-certified appraisers charge from $125 to $180, and these are extensive appraisals with the appraiser coming to your location.”

Royal also reminds bike owners it’s recommended that you alert your insurance company of any changes made to your bike. You need to find out if you need to pay more for your insurance if you add something new to your bike. Otherwise, you may find yourself out on a limb and underinsured.

Most insurers will start with the base value of your stock bike and separate your aftermarket parts. Then they depreciate the bike and the parts. You really need to find out the maximum amount of coverage your insurance company provides on your aftermarket parts. This is important since some of them may only cover one-third to one-half of the market value of your stock bike to determine the total amount of coverage for your aftermarket parts and accessories. Remember, insurance companies make their calculations with depreciation in mind, often by the Blue Book or NADA, or even by contacting local bike shops. They have their formulas, which you’ll need to find out about.

While Royal stays away from recommending particular motorcycle insurance companies, he does keep an extensive list of the options and features of the various companies for comparison.

The Motorcycle Appraiser’s Association offers the services of the 20 people who so far have qualified for motorcycle appraisal certification. Their names and locations are listed on their website: www.motorcycleappraisersassociation.com. To speak personally with Bobby Royal, you can call him at (866) 266-2227.