Motorcycle Insurance Articles
State Laws And Their Impact On Motorcycle Insurance
2010-07-31
Many bike owners overlook the role state and federal laws can play in a motorcycle insurance quote. State law has a particularly significant impact on motorcycle insurance rates, and often accounts for the discrepancy between insurance premium averages in different states. Insurance law is, of course, designed to protect consumers and keep roads safe. Sometimes, specific laws can have unintended consequences that drive up the cost of motorcycle insurance in a state.
One good example is the effect of state laws on special motorcycle insurance discounts. Many insurance providers offer discounts for bike owners who keep a policy in good order for a certain period of time, usually two to five years. These "loyalty" discounts serve as an incentive to keep riders insured and to prevent them from changing to another insurance provider. Certain states have made loyalty discounts illegal, however, since these discounts aren't available to all insured drivers. The concern is that loyalty discounts may be inherently unfair, and may create a sort of monopoly. In these states, insurance rates may be driven up as a result. Some motorcycle insurance companies have gotten around this law by offering steady insurance discounts, which don't specify that a driver needs to keep constant insurance with their company, but merely a solid insurance record. However, these discounts aren't as significant as loyalty discounts, since loyalty discounts offer insurance providers better profits.
State laws can also affect a motorcycle insurance quote in more direct ways. Different states have different insurance requirements, and this is one of the most significant factors in a given quote; the higher the insurance requirements, the higher the quote. Many motorcycle owners opt for more than the bare minimum insurance requirements, but the laws of the state still affect every quote issued.
The legal system of a state is also a major factor in formulating motorcycle insurance quotes. Most states operate with a "tort" system, which means that an at-fault driver can be sued for damages after an accident. Some states use a no-fault system, which can greatly reduce the average cost of insurance, but limits the litigation rights of motorcycle owners. Understanding your rights is a very important part of buying a motorcycle insurance policy, and before you look for a quote, you should take time to look up your state's coverage requirements and whether or not it operates on a tort system. Every motorcycle owner wants the lowest insurance rates possible, and understanding the different factors that affect each quote is an important way to control the coverage levels and premiums of your motorcycle insurance.