Motorcycle Insurance Articles
Differences In Public And Private Motorcycle Insurance Companies
2010-08-30
Motorcycle insurance is one thing that no rider can afford to be without. Should even a minor accident occur, having no insurance puts both you and the other rider in a precarious position and could lead to a large fine or even a license suspension. While there are a number of motorcycle insurance options currently available on the market, many are quite costly and involve a large amount of monthly premiums for what is often considered to be a minimum of coverage. In the United States, the most common form of motorcycle insurance is what is known as private insurance, or that run by non-government agencies. In other countries, however, auto and motorcycle insurance is often run by state-sponsored agencies, and this is known as public insurance. There are a number of significant differences between the two types, and both come with advantages and disadvantages.
Private insurance is the type that most motorcycle riders in the United States are familiar with. A company charges money for a policy and is loosely regulated by the state they are operating in. Every state will have different requirements for insurance companies operating within its borders-some will be stricter than others. In a private model, all private insurance companies are competing with each other for the premium dollars of customers, which can make for a market in which clients can find good deals if they choose to shop around. Unfortunately, in some markets collusion between companies can mean an increase in rates across the board.
A public insurance company, meanwhile, is owned and operated by a state or federal agency and does not have as its mandate making profit. Instead, the company operates simply to provide insurance as required by law. This makes the base price of insurance cheaper, but also means that the company has no incentive to compete or offer discounts, as they are not interested in breaking even or turning a profit. While this type of insurance will be more highly regulated, it does not always result in better coverage for an insured.
As a motorcycle rider, it is important to find a balance between the cost of monthly premiums and the coverage that they afford. Ideally, finding a company that balances some of the ideals of a public insurance provider with the bottom-line focus of a private business is ideal, but this can often take time to seek out. Make sure to visit your state's insurance board website or contact them directly in order to determine exactly what insurance companies are required to offer in your state for motorcycle insurance, and to find out what type of options you have available for coverage.