Motorcycle Insurance Articles
Types Of Coverage Required For Financed Motorcycles
2010-10-07
Many motorcycle owners look into financing options when purchasing a new bike. This can be a great way to afford a bike that would be otherwise out of your budget. However, there are some extra costs for financed motorcycles; riders must pay interest, of course, and they're required by their financing contracts to pay for more motorcycle insurance than they'd be otherwise legally obligated to buy. If you're looking for motorcycle insurance quotes for financed motorcycles, it may be worth your time to understand how financing will affect your insurance quotes and options.
The bank that issues your loan will require you to buy comprehensive coverage and collision coverage for your financed motorcycle. These coverage types protect their investment. Comprehensive coverage will cover any damage to your bike cause by acts of God, vandalism, theft, and other occurrences, and collision coverage will cover damages that result from accidents with other vehicles. Usually, a bank will require equal coverage for financed motorcycles, which means that they'll expect a policy with coverage for the value of the vehicle (not just the amount of your loan). If you don't make payments on your loan, your bank has the option to repossess your motorcycle, and they therefore have a valid reason to make sure that the motorcycle is well protected. Of course, comprehensive and collision coverage is valuable even if you aren't financing your motorcycle, but the fact is that you'll be legally compelled to purchase it. If you don't purchase these coverages, your bank may buy an insurance policy for you. This insurance policy will be much more expensive than motorcycle insurance quotes that you'd be able to find online, so it's best to get a policy and present proof of insurance on financed motorcycles as early as possible.
There's some good news for financed motorcycle owners, however. Financed vehicles are generally less expensive than fully owned vehicles, as insurance company actuarial tables indicate that riders who finance are less likely to be involved in accidents. Because of this, when you pay off the loan on your financed motorcycle, you may notice the cost of your coverage go up if you don't change any of your coverage levels.
Before you apply for motorcycle financing, look for motorcycle insurance quotes online. This is a good way to find out all of the costs of a financed motorcycle. It can be helpful to know about your coverage before you apply for a loan, and you'll be able to make a knowledgeable decision about both your motorcycle insurance and your financing by doing some research before you buy.