For many younger riders, the cost of motorcycle insurance is so high that it becomes one of the main deterrents of buying a motorcycle. I’ve done research on the algorithm that insurance companies use to give you a quote and below I have listed the most important metrics to take into account when shopping around for motorcycle insurance.
So, why is motorcycle insurance so high? The reason motorcycle insurance is so high for some people is because of:
- The driver’s age
- Their driving record
- The motorcycle CC’s
- The motorcycle’s age
- The motorcycle’s value
- The city you live in (crime rate)
In order to get a more reasonable quote, you need to take a look at these factors that go into the calculation of insurance cost. If you’re a young, inexperienced rider that is buying a street bike with a high accident rate then you can expect to have a very high insurance premium. In each paragraph below I’ll explain in more detail how these factors make your insurance so high.
The first factor I listed was the driver’s age because as I did my research on this subject, the most common theme seemed to be younger people who were just buying their first motorcycle and don’t realize that insurance was going to be so high. Insurance is much higher for young people because of accident statistics from the government.
There is almost a linear trend of the percent of motorcycle accidents that happen to the age group of the driver. Drivers age 16-20 of course have the highest percent of accidents because as a whole they tend to be less careful on the road. They only have a few years experience and haven’t yet learned how to drive defensively around other people.
As you transition from one age group to the next you’ll see a drop in insurance rates. The 20-30 age group is still slightly high, 30-40 goes down even more, and then the over 40 bracket goes way down. As you get older, your insurance premium will go down if you don’t get tickets or get in any accidents.
Insurance companies understand that insuring someone in a younger age group has a large risk, so they increase the insurance premium (how much you pay a month) by a lot in order to compensate how much money they think they’re going to lose on you.
I bought my first motorcycle when I was 22 and I only paid $15 per month for liability coverage. But there were a lot of factors that made my insurance go down. It was a 1980 Yamaha XS850 that I bought for $800. So age is just one of many things to consider.
One potential way to get around the increased insurance cost because of your age is to have a parent be the primary driver on the insurance policy and add you as a secondary driver. This is legal to do and can sometimes save you a lot of money.
Something very interesting that I’ve learned over the past few years about insurance companies is how they act after you’ve been in an accident. My wife and I were in an accident in November 2016 that was completely the other driver’s fault, we were hit head on by a distracted driver. Even though the accident was not our fault, we saw very slow insurance rate increases on our bills over the next year.
So even though insurance companies will tell you that your rates won’t go up if it’s the other party’s fault, that’s not true. They will slowly increase your rates so you don’t really even notice.
Your driving record plays a huge role in your cost of monthly insurance. If you get any sort of ticket from a police officer you can guarantee that your insurance rate will go up. Even if you’re driving your car and get a ticket, if you have your motorcycle insurance through the same company (which many of us do) then you can expect your motorcycle insurance to go up as well.
In most states your tickets are taken off your record after 7 years, but that’s a long time. It’s best just to stay out of trouble and stay close to the speed limit. Driving smart will have a huge impact on your insurance cost.
The size of your engine has a direct correlation on your insurance cost. The larger the engine, the more you can expect to pay. In every motorcycle insurance form I’ve filled out it asks for the engine cc’s. Interestingly enough it never asks for horsepower, just cc’s. So if you can find a smaller displacement engine that has more horsepower you can generally save a little money.
Every insurance company has access to a database that stores the accident statistics for every type of motorcycle. So as your information is processed through their system and they see you’re looking at insuring a 1200cc motorcycle and you’re only 21 years old, that risk factor jumps way up.
The cc’s of your motorcycle is not what makes a motorcycle go fast, there are other factors that play into that. There are plenty of fast motorcycles that don’t have large displacement engines. The insurance companies don’t use those other factors in their calculation though, most of them just use engine size, which can be to your advantage.
So the best way to lower your insurance cost if you’re looking at larger displacement motorcycle, like bobbers and big cruisers, is to maybe look at slightly smaller displacement engines that are lighter but have more horsepower. You’ll get more a bang for your buck and get lower insurance costs.
Motorcycle Age And Value
The model year of your motorcycle and it’s blue book value go hand in hand, so I’ll discuss them in the same section. Your motorcycle’s age has a big impact on your insurance cost because the people who ride older motorcycles generally get in less accidents than those who ride newer street bikes.
When you look at buying an older motorcycle, the value has probably done most of its depreciation, so the insurance company isn’t going to have to pay out as much if you get in a wreck. The insurance company’s only concern is that they’re going to come out on top in the long run. So by you buying an older motorcycle that will only cost a few thousand dollars to replace, your premium will go way down.
Every motorcycle that I’ve owned is about 30-40 years old. I like that style and I can get incredible deals on them by looking around. I’ve never paid more than $900 for a motorcycle and I’ve never sold one of them for under $3000 after fixing them up a little.
Buying old motorcycles and then building them into what you want is the best of both worlds. You get them cheap, you fix them up for cheap, and your insurance stays incredibly low! I’ve never paid more than $21 per month for insurance. See my article here that discusses buying a new motorcycle vs. buying one that is used.
The City You Live In
It wasn’t until this past year that I found out how much your city can impact your insurance rate. I moved from Idaho, which has a very low crime rate, to Mississippi which has a very high crime and accident rate. My insurance on my 1969 Triumph almost doubled. It went from $9.00 per month to $17 per month just because my zip code changed.
If there are a lot of vehicle thefts in your area then you can expect for your insurance to get much higher. Since it’s so easy for motorcycles to get stolen it can help if you tell them that you keep the motorcycle in a locked garage, or with a wheel lock, or have some sort of security system on it.
I wouldn’t ever recommend lying about what city you live in to get a cheaper rate. I do know that some people do this, but it’s not ever a good idea to lie to an insurance company. If they find out your primary residence is in a different city or state than you told them they have the ability to not pay out on an insurance claim because you weren’t honest.
Some insurance companies give you discounts if you are taking additional safety precautions and providing extra security for your motorcycle. Click here to see my list of recommended security products that may help decrease your insurance premiums.
Comprehensive Vs. Liability Insurance
An interesting fact that a lot of motorcycle riders don’t know is that very few insurance companies offer a package that covers you as a rider. They’ll cover your motorcycle and any damage you cause to other people or property, but rarely will insurance ever cover your bodily injuries.
So if you get an insurance quote back that is extremely high, this might be something you want to check. If they’re covering your bodily injuries then it’s going to be a sky high cost. Most of the large insurance companies refuse to cover bodily injury because the statistics are so high against them on motorcycles.
Basically any motorcycle wreck you’re in is going to result in some sort of injury because there’s nothing between you and the road. That’s why insurance companies won’t cover your body, because they lose money 100% of the time, and that’s not a good business model.
My personal preference is to get the best liability insurance I can. So as long as I don’t cause the wreck myself then I’m completely covered by the other party’s insurance. And if they don’t have insurance then I’ll be covered by my un-insured or under-insured policy.
An un-insured and under-insured policy is something every rider should have. This covers anytime someone hits you and they don’t have good insurance. Your policy will cover it. And since a large percentage of accidents are caused by people without good insurance I feel much safer knowing that my body is insured as long as I don’t cause the wreck.
Motorcycle Accident Statistics
The statistics are there to show that motorcycle accidents are more fatal than car accidents because of the limited amount of safety instruments on a motorcycle. There’s no way getting around these numbers, but all of us can share in being a little safer out there. The safer we are, the lower that insurance rates will be for all of us.
A motorcycle accident is over 5 times more likely to end in a fatality than a car accident. That’s why insurance companies generally won’t cover bodily injury, because they’ll have to pay out 5 times more than they are now.
What are the cheapest motorcycles to insure? The cheapest motorcycles to insure are those that have an engine under 500cc and have a very low blue book value. Older motorcycles will also have lower insurance rates since they’re not worth as much.
What is the minimum amount of insurance I need? The federal government does not have a legal limit, they leave that up to each state to decide. Just call any local insurance agent and they can tell you. Most states require you at least have liability insurance.