Why is Motorcycle Insurance so expensive?

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Many young riders find that the high cost of motorcycle insurance makes it difficult to buy 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.

Why is motorcycle insurance so expensive? Why is motorcycle insurance so expensive for some?

  • The driver’s age
  • Their driving record
  • The motorcycle CC’s
  • The motorcycle’s age
  • The motorcycle’s value
  • Crime rate of the city in which you reside

To get a lower quote, consider these factors.  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.

Driver’s Age

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. Because of the accident statistics provided by the government, insurance premiums are much higher for young people.

The percentage of motorcycle accidents that occur to drivers of different ages shows a pretty linear trend.  The highest percentage of motorcycle accidents occurs in drivers aged 16-20. This is because they are generally less cautious on the roads.  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. Although the 20-30 age range is still relatively high, rates for those aged 30-40 and over 40 drop significantly. 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.

When I was 22, I purchased my first motorcycle and paid only $15 per month for liability insurance. My insurance premiums dropped due to a variety of factors. I bought a 1980 Yamaha XS850 for $800. You should also consider your age.

A secondary driver can be added to an insurance policy to offset the higher insurance costs due to your age.  This is legal and can save you money.

Driving Record

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. Despite the fact that the accident wasn’t our fault, our insurance rates increased very slowly over the following 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 is a major factor in the monthly cost of insurance. You can be sure that your insurance rates will rise if you are given a ticket by a police officer.  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. Smart driving will make a big difference in your insurance costs.

Motorcycle CC’s

Your insurance costs are directly affected by the size of your engine. You can expect to pay more for a larger engine. 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.  If you can find a smaller displacement engine which has more horsepower, you will generally be able to save a bit of money.

Every insurance company has the ability to access a database that contains accident statistics for every type 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.

The Value and Age of Motorcycles

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. Your premium will drop if you buy an older motorcycle that is only a few thousand dollars to repair.

Every motorcycle that I’ve owned is about 30-40 years old.  I love this style, and can often find incredible deals on them by simply 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.

You can have the best of both, by buying old motorcycles and making them your own. These are very affordable, easy to maintain, and you can keep your insurance low. I’ve never paid more than $21 per month for insurance. You can read my article about buying a motorcycle new vs. purchasing one used.

The City Where You Live

It wasn’t until this past year that I found out how much your city can impact your insurance rate.  I moved from Idaho with a low crime rate to Mississippi, which has high accident and crime rates. My 1969 Triumph insurance almost doubled. My zip code change caused my insurance to go from $9.00 per monthly to $17 per mois.

Your insurance premiums will likely go up if there are many vehicle thefts in your local area. 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.  Some people do this, however. 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.

Insurance companies may offer discounts for you if you take extra safety precautions or provide additional security for your motorcycle. Click here to view my recommended security products that can help lower 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.

You should be suspicious of high-priced insurance quotes.  If they’re covering your bodily injuries then it’s going to be a sky high cost. Large insurance companies are reluctant to provide coverage for bodily injury due to the fact that statistics on motorcycle accidents are against them.

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.

Personally, I prefer to have the best possible insurance for liability.  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.

Every rider should have an un-insured or under-insured insurance policy. This covers anytime someone hits you and they don’t have good insurance. It will be covered by your policy.  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.

Statistics on Motorcycle Accidents

Because of the lack of safety devices on a motorcycle, statistics show that motorcycle accidents are more deadly than car accidents. There’s no way getting around these numbers, but all of us can share in being a little safer out there. Insurance rates for everyone will drop if we are more secure.

A motorcycle accident has a 5x higher chance of resulting in death than a vehicle 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.

Similar Questions

Which motorcycles are the most affordable to insure? Motorcycles with less than 500cc engines and a low blue book value are the most affordable to insure. Older motorcycles will also have lower insurance rates since they’re not worth as much.

How much insurance do I really need? The federal government doesn’t have a legal limit. Each state can decide. You can ask any local agent for information. Most states require that you have at minimum liability insurance.

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