Switching Gears: Navigating Insurance For Your New Motorcycle

Changing your motorcycle insurance to a new motorcycle can be a complicated process. It is important to inform your insurance company about any changes to your motorcycle, as failing to do so could invalidate your policy. Modifications to your motorcycle can be categorised as accessories or modifications. Accessories refer to parts of your motorcycle that are not directly related to its functionality, such as audio systems, top boxes, and mirrors. On the other hand, modifications are changes that affect the performance or handling of your motorcycle, such as alterations to the exhaust system or engine. It is crucial to disclose all modifications to your insurance provider to ensure your policy remains valid.

When switching to a new motorcycle, it is essential to review your current policy, decide on the necessary coverage, and compare quotes from different insurance companies. You should also be aware of the potential financial implications and cancellation charges associated with ending your existing policy prematurely. It is recommended to cancel or transfer your insurance immediately after selling your old motorcycle and finalising the necessary paperwork.

Additionally, when purchasing a new motorcycle, it is important to ensure that the buyer has their own insurance in place. This will help protect you financially in case of any accidents or incidents involving the new owner.

Cancelling your current insurance policy

Timing of Cancellation:

It is recommended to cancel or transfer your insurance policy immediately after agreeing on the sale of your old motorcycle and completing the necessary paperwork. This is considered best practice, regardless of the potential costs involved. However, the timing of cancellation can be tricky due to various factors, such as the remaining time on your existing policy, cancellation charges, and the status of acquiring a new bike. In some cases, it may be more cost-effective to let the policy run out instead of cancelling it prematurely.

Contact Your Current Insurance Provider:

Get in touch with your current insurance provider by phone or online, depending on their available methods of communication. It is advisable to do this at a convenient time, as you may need to wait to speak with a representative. Inform them of your intention to cancel your policy and provide them with the desired date for the policy to end. They may request additional information or details during this process.

Understand the Financial Implications:

Before cancelling your policy, be aware of any cancellation charges or administrative fees that may apply. These fees can vary, so it is important to review your insurance contract or consult directly with your insurance provider to understand the financial implications of cancelling your policy.

Ensure Continuous Coverage:

When switching insurance policies, it is crucial to maintain continuous coverage to avoid gaps in your insurance. Before cancelling your current policy, make sure you have secured a new insurance policy for your new motorcycle. This will ensure that you remain insured during the transition period.

Provide Necessary Information:

When contacting your current insurance provider to cancel your policy, have all the relevant information ready. This may include your policy number, personal details, and any other documentation related to your insurance. Providing this information promptly will help expedite the cancellation process.

Understand the Risks of Early Cancellation:

In some cases, cancelling your insurance policy prematurely can result in financial loss or inconvenience. For example, if you cancel your policy before selling your old motorcycle, you may need to register the bike as off the road, and there may be concerns about fire or theft during the interim period. Additionally, if you have a new buyer for your old motorcycle, ensure that they have their own insurance coverage before allowing them to take possession of the vehicle.

Remember, it is always best to review your insurance policy carefully and contact your insurance provider directly if you have any questions or concerns about the cancellation process. Each insurance company may have slightly different procedures, so staying informed will help you make a smooth transition to your new motorcycle insurance policy.

Deciding what kind of coverage you need

When deciding what kind of coverage you need for your motorcycle insurance, it's important to consider your location, situation, and the motorcycle itself. Here are some key factors to keep in mind:

Minimum Legal Requirements

Nearly every state has minimum motorcycle insurance requirements, which typically include liability coverage for bodily injury and property damage. The specific limits vary by state, so be sure to check the requirements for your location. This is the bare minimum coverage you need to ride your motorcycle legally.

Comprehensive and Collision Coverage

If you're financing your motorcycle, your lender will likely require comprehensive and collision coverage. Comprehensive coverage protects your bike from damages caused by incidents other than road accidents, such as theft, fire, or natural disasters. Collision coverage, on the other hand, pays for damages to your motorcycle after an accident, regardless of who is at fault. These coverages are essential if you want to protect your investment.

Uninsured/Underinsured Motorist Coverage

Consider adding uninsured/underinsured motorist coverage, especially if it's not already included in your state's mandatory coverage. This will protect you if you're in an accident with a driver who doesn't have sufficient insurance. It covers medical bills, lost wages, and property damage, depending on the policy.

Personal Injury Protection (PIP)

PIP is mandatory in some states and available in others. It covers your medical expenses and lost wages after an accident, regardless of who is at fault. This can be especially useful if you don't have adequate health insurance.

Custom Parts and Accessories Coverage

If you've added custom parts or accessories to your motorcycle, consider getting additional coverage for these. Basic comprehensive and collision coverage may not be sufficient to cover all your upgrades. Some insurers include a limited amount of custom parts coverage, while others offer it as an add-on.

Roadside Assistance and Towing Coverage

Roadside assistance and towing coverage can be a lifesaver if your bike breaks down or you find yourself stranded on the road. This coverage typically includes services like towing, fuel delivery, and battery assistance.

Guest Passenger Liability Coverage

If you frequently ride with a passenger, consider adding guest passenger liability coverage. It will protect your passenger in case of an accident, and it might be mandatory in your state.

Other Optional Coverages

There are various other optional coverages to consider, depending on your needs. These include total loss coverage, motorcycle repair insurance, carried contents and personal belongings coverage, and track day coverage. Additionally, if you have multiple motorcycles, you can often get a discount by insuring them all under the same policy.

Remember, the coverage you choose will depend on your specific circumstances and the value of your motorcycle. It's always a good idea to shop around and get quotes from multiple insurers to find the best policy for your needs.

Comparing insurance quotes

When comparing quotes, it is important to consider the following:

• The level of coverage you need: This includes the type of coverage (liability, comprehensive, collision, etc.) and the amount of coverage (deductibles, limits, etc.). It is crucial to compare policies with the same coverage levels to get an accurate idea of the cost.
• Your personal information: This includes your age, riding experience, driving record, location, and the type of motorcycle you own or plan to own. These factors can significantly impact the cost of insurance.
• The insurance company: Different insurance companies have different rates, coverage options, and discounts offered. It is important to research multiple companies to find the best fit for your needs.
• The cost of the policy: Consider the premium, deductible, and any additional fees or charges. Be sure to understand what is included in the quoted price and what may be extra.
• The reputation of the insurance company: It is important to choose a company with a good reputation and financial stability to ensure they will be reliable in the event of a claim.
• Use an online comparison tool: Many websites offer comparison tools that allow you to input your information and receive quotes from multiple insurance companies. This can be a quick and easy way to get an idea of the cost and coverage options available to you.
• Contact insurance companies directly: In addition to using comparison tools, consider contacting insurance companies directly to get more detailed information about their policies and to ask any questions you may have.
• Look for discounts: Many insurance companies offer discounts for things like safety courses, bundling policies, or being a member of certain groups. Be sure to ask about any available discounts when comparing quotes.
• Read the fine print: Be sure to carefully read the terms and conditions of each policy to understand exactly what is covered, what is not covered, and any exclusions or limitations.
• Get quotes from multiple companies: Don't just settle for the first quote you receive. Shop around and get quotes from several insurance companies to find the best rate and coverage for your needs.

Informing your insurer of modifications

Modifications to your motorcycle can be an exciting way to make your bike unique, improve its performance, or enhance its safety features. However, it is crucial to inform your insurer about any changes you make to ensure that your policy remains valid and that you have the proper coverage in the event of a claim. Here are some essential things to know about informing your insurer of modifications:

Understanding Modifications

Modifications refer to any changes or additions made to your motorcycle that differ from its standard manufacturer specifications. This could include performance enhancements, such as exhaust system changes or engine modifications, or cosmetic alterations like specialist paintwork. Even something as minor as adding decals or stickers can be considered a modification. It's important to note that modifications are different from accessories, which are parts not directly related to the motorcycle's functionality, such as audio systems, top boxes, or mirrors.

The Impact of Modifications on Insurance

Modifications can have varying effects on your insurance costs. While some insurers may charge extra for certain modifications, others may include them in your policy without additional fees. Generally, modifications that improve your bike's security or safety features could lead to lower insurance costs. On the other hand, enhancements that increase your motorcycle's power, speed, or overall performance could result in higher insurance premiums. Insurers view these changes as an additional risk, as a more powerful bike may have a higher chance of being involved in an accident or attracting thieves.

Informing Your Insurer

When it comes to informing your insurer about modifications, full disclosure is always the best policy. Let your insurer know about any changes you've made or plan to make, regardless of how minor they may seem. This is because even small modifications could invalidate your policy if not declared. By providing your insurer with detailed information, you can ensure that your bike is properly covered, and you won't be caught off guard by unexpected costs or claim rejections. It's also a good idea to get in touch with your insurer before making any modifications to understand how they might impact your insurance costs.

The Five Percent and Three Mod Theory

It's worth noting that there are some theories about modifications and their impact on insurance. One theory suggests that modifications resulting in less than a five percent improvement in your bike's performance may not lead to an increase in your insurance premium. However, this varies between insurance brokers, so it's always best to inform your insurer regardless. Another theory posits that insurers will accept up to three modifications before your premium is affected or requires updating. Again, this is not a hard-and-fast rule, and it's crucial to disclose all modifications to your insurer.

Cancelling your insurance before selling your bike

You should also be aware that if you cancel your policy before the end of the year, you will not receive your No Claims Bonus for that year. This will have financial implications for your next policy, as your No Claims history affects the cost of your premium.

If you cancel your insurance, you will also need to declare your bike off the road or begin a new insurance policy. Under Continuous Insurance Enforcement (CIE) rules, your bike cannot be uninsured or not declared off the road.

However, despite these potential costs, it is important that you do cancel your insurance when you sell your bike. If you do not, and the new owner has an accident, your insurance company would be obliged by law to cover the cost of the claim. You would then be in breach of your contract, as you would have given an uninsured driver permission to ride a motorcycle on your policy. This could result in serious financial problems.

Therefore, it is best practice to cancel or transfer your insurance immediately after the sale has been agreed and the paperwork completed, regardless of the cost. Most insurance companies will let you do this online or over a 24-hour phone call.

Alternatively, if you are buying a new bike, you can simply update your existing policy. Most companies will allow you to do this, although you will be charged a fee plus any additional premium your insurer may charge.

Frequently asked questions