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What Lien Means On A Motorcycle Insurance Policy


It's important to understand the various terms used in motorcycle insurance quotes. After all, you can't really find the best policy for you if you're not sure what you're reading, so all bike owners should spend a few minutes looking over terms that relate to coverage and payment. In particular, it's important to know how a motorcycle lien affects your policy.

In an insurance contract, a motorcycle lien is the debt of the loan used to buy the motorcycle. The lien holder is the person or organization which offered the loan to the bike owner, usually your bank or credit union. The lien also refers to the interest the bank has in keeping your bike insured. If you were to suddenly stop paying for your motorcycle, the bank would repossess it; if the bike was in a ruined condition due to an accident, you wouldn't have much of an incentive to keep up on your payments. Therefore, the bank will want to keep the motorcycle in a reasonably good running state. As the lien holder of the motorcycle, they can legally require you to buy a certain amount of insurance coverage over the legal requirements for your state. Banks will usually exercise this right.

In most instances, banks will require you to carry a certain amount of comprehensive coverage to protect your vehicle in the event of an accident. Depending on the bank and your state of residence, they may even require additional coverage. This has the general effect of increasing the cost of your motorcycle insurance quotes, since you're buying more coverage than you're legally required to buy. However, usually the coverage amounts required by your lien holder are quite reasonable, and will serve to protect you in the event of an accident. If you don't buy an adequate amount of motorcycle insurance, your bank will have the option to buy forced placed insurance. Basically, they purchase insurance coverage and charge you for it-but you'll usually pay far more for forced placed insurance than you would pay for the same coverage through your own insurance company, so it's best to keep your coverage up to date.

When you look for motorcycle insurance quotes, be sure to keep in mind whether or not you have a motorcycle lien, and how your lien holder affects your policy. Make sure you're looking at sufficient amounts of coverage, and have your new insurance provider fax proof of insurance to your lien holder as soon as possible when the new policy takes effect. This will help you to stay protected and avoid the high cost of forced insurance.

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