Why Motorcycle Insurance Rates Increase
If you buy motorcycle insurance, then you have to pay for it. Your agent will inform you of your premium at the time you buy your plan. However, each time that you renew your policy later, you might see your rates increase or decrease.
Higher insurance rates are inconvenient for everyone. However, they are part of the deal sometimes when it comes to your insurance. All insurers charge premiums based on the policyholder’s risks to them. As your risks change over the years, you might have to pay more for your coverage.
Still, with the help of your insurance agent, you can conscientiously work to keep your premiums affordable, so that you always know you and your bike are protected wherever you go.
How Risks Impact Motorcycle Insurance Rates
By agreeing to insure you, insurance companies take on a financial risk. They will have to pay you when you make a qualifying claim on your motorcycle insurance, so they will want to know exactly how likely you are to cost them a lot of money. Various factors might influence this risk, and when enrolling you in coverage, the insurer will have to address it. Those bikers who have higher risks of filing claims, and costing the insurer a lot of money, are likely to pay more for their coverage.
Common Reasons Premiums Increase
When you renew your motorcycle policy, you might face an increased premium. Sometimes, it will be nominal, but other rate increases can be significant. Common factors that might trigger a rate hike are:
1. Filing a Claim on Your Policy
When you file a claim for motorcycle damage or other losses, you directly prove to your insurer that they will have to pay you. Therefore, compared to someone who has never had a wreck or filed a claim, you are a higher insurance risk. Your rates might rise as a result.
You are most likely to see an increased premium if you are at-fault for an accident. This is a clear indicator that you are not the safest driver, and therefore you require more investment from the insurer. However, if you are not at-fault for the cause of the claim—for example, if you are the victim of a hit-and-run accident—then your insurer might waive any premium increase.
2. Expiring Discounts
Most motorcycle insurance policyholders qualify for discounts. These might be for accident-free bikers, those who choose automatic premium payments, student bikers or bikers who have passed defensive driving courses. However, discounts can expire, and when they do, your rates might rise. For example, if you have a wreck during your policy term, then your accident-free discount might disappear. Once you graduate, you might no longer qualify for a student discount.
3. Breaking the Law
Drivers must follow the rules of the road and breaking the law could mean fines and penalties. It might also equal higher insurance rates. Insurers will likely review your driving record when they quote or renew your plan. If they see that you have a history of speeding tickets, DUIs or at-fault accidents, then they have confirmation that you are a riskier operator, and they might charge you more.
4. Buying More Coverage
You might decide to increase your motorcycle policy’s coverage limits. Or, if you buy a new bike and finance it, then you might have to buy additional physical damage protection. If you buy more coverage, then you are going to pay more for your plan. The simple laws of supply and demand apply.
Driving risks vary from place to place, even from street to street. Therefore, if you move, then you might see changes in your premium. For example, if you move to an urban area where there are higher risks of wrecks or vehicle theft, then you are likely to pay more for your plan.
6. Riding More
Some bikers only ride on weekends. Others ride every day. Depending on how much you use your bike, your risks of accidents will increase. So, if you have used your bike more in the last year, then your rates might increase because you are in more situations where you might need to file a claim.
7. Lowering Your Deductible
Some parts of your policy, namely your physical damage insurance, will likely have deductibles. A deductible is a dollar value that you agree to pay for the cost of a claim yourself. For example, if you have a $500 collision deductible, and your bike sustains $3,000 in damage, then your insurer only has to pay you $2,500, because you agreed to let them deduct the remaining $500.
If you lower your deductible, then you shift more of a cost burden onto the insurer. Therefore, the insurer might have to raise your rates to make up the difference. Still, you should never raise your deductible so high that you can’t afford it, just to save money. After all, it will still be your responsibility to pay.
By working with your motorcycle insurance agent proactively, you’ll be able to get affordable coverage right from the start. You can then work with your agent well into the future to make sure you always keep those rates affordable.