If you own – or plan to own – a classic motorcycle, you’ll want it fully insured before you take it out for that first ride or to the bike show. But standard motorcycle insurance policies that are offered for newer motorcycles may not be the soultion – these plans may not the coverage you need for that high value classic bike.
Indeed, under the terms of a standard policy, the value of your classic may be reduced to that of nothing more than an “old” motorcycle.
Here are some tips on considering the insurance policy options you may have available, not necessarily ranked in order of priority or importance:
1. Request Complete Copies of Policy
Consider requesting complete copies of the policy that would apply in you state (including state insurance law amendments) from each potential insurer so you can make an apples-to-apples comparison of the terms, coverages and perhaps most important, the exclusions.
2.Don’t Skip Definitions at Beginning of Policy
Don’t skip the definitions at the front of the policy. The definitions are essential to understanding how the insurance company implements the coverages in the policy. For example, how the company defines a “classic” or “antique” vehicle may impose certain conditions on the bike such as how often it can be used for anything other than bike shows, club functions, parades and so on. There also may be a number of years old the bike must be to qualify.
3. The Exclusions are Vital
The “exclusions” part of the policy is of great importance—the sales pitch always tells about what is covered but it’s the exclusions page that breaks the news about what isn’t. Exclusions may be listed in multiple places in the policy, so it may be necessary to check them out as they apply to various aspects of the policy. The old adage is “what the bold print giveth, the fine print taketh away.”
- Exclusions to be aware of may limit what types of damage will be covered that you may not think of; damage caused by mold, mildew, rust or environmental conditions may be excluded.
- Losses of parts or accessories by theft where there are no signs of forcible entry may be excluded.
- Racing or other competitive activities may also exclude coverage.
4. Know About Dispute Resolution
Dispute resolution can be a very important aspect of the policy. The policy may require disagreements between you and the insurance company about whether a claim should be paid or how much should be paid, a process such as binding arbitration may be specified for resolving the dispute. That can result in some additional costs for you, so it’s good to know what is required. In resolving the amount of value for a classic bike, the policy may provide that an expert appraiser be brought in by each side to settle it and if they disagree, a third party to resolve their differences. Again, that process results in more cost for the insured, as well as the insurer.
5. Look Over the Obligations
Look over the obligations you have as the insured party in the event of loss or accident. In some instances, failure to follow those requirements may allow the insurance company to not cover the loss. This may include doing things like producing certain records like police reports, medical records and submitting to certain medical exams, if required.
6. Must You Have Another Regular-Use Vehicle
The policy covering the classic bike may include requirements that you must have another regular use vehicle—that the policy may not be your only vehicle insurance policy.
7. Know What Bike Use Affects Coverage
Coverage may be affected if the bike is used in certain ways, such as a rental, lease or for some commercial use. Needless to say, if the bike is used in any illegal activity and is damaged coverage may be negatively affected.
8. Know Policy Territory
The policy territory may be defined in some detail and knowing where the limits are can be important if you plan to ride or show the bike in areas that may not be included, since claims arising out of incidents outside the policy territory may not be covered.
9. Understand Policy Periods
The policy period will be defined in the policy and strictly limits the time period during which the coverage is in effect. Knowing the policy period is essential to assure when coverage could be expected for a given incident.
10. Understand Termination
Termination of the policy can happen in more than one way; it can be cancelled by the insurance company for things like non-payment of premium, if the insured person’s driver’s license is suspended or revoked, or if any information used in obtaining the policy was misrepresented or fraudulent.
Cancellation by the customer can be done by giving notice to the company of the date you want the policy to end. The company may non-renew the policy for various reasons, with advance notice to the customer. Cancellation during the policy period may also result in a premium refund being due.
There’s a lot to think about in getting any insurance policy, so take your time and ask questions of the insurance company’s representatives. If you can locate other classic bike owners—perhaps through a club or national organization—talk to them about their experiences with insurance.
Another good resource for information may be your state’s Office of the Commissioner of Insurance (or equivalent). For help finding that agency in your state, check out the National Association of Insurance Commissioners (NAIC).
Of course, you need to check into the insurance laws in your state and nothing in this article should be considered legal advice. Whenever purchasing insurance, be sure to shop around and remember to read the fine print.
