You’ve spent lots of time – and money – customizing your bike to make it one-of-a-kind. But what happens if you’re in an accident? Let’s start with the basics.
If your bike is destroyed in a crash, insurance companies will pay you for the bike’s fair market value – the amount the bike was selling for in the condition immediately before the accident. While extras and modifications can increase the value of a motorcycle, fair market value is not computed by adding what you paid for the bike plus the cost of customizations and accessories.
Let’s say you added custom wheels with polished rotors and tires, custom handlebars and forward controls. All that chrome cost you around $4,000. But, after an accident, you may only see half of that from the insurance companies if they pay you the fair market value of the bike.
Instead, insure your motorcycle for a certain amount, often called scheduled or stated-value insurance. This will help protect you from losing all your investments in custom parts, paint and accessories. To do this:
- Document all accessories with pictures and receipts.
- Tell your insurance company what it’s all worth and agree on an amount (stated-value).
Then, if your bike is a total loss, the insurance company pays the pre-set amount you both agreed to, no negotiating. If your insurance company doesn’t offer scheduled or stated-value insurance, ask them about insuring your bike for its replacement value instead of fair market value – that ensures your bike will be replaced after an accident and won’t be at the mercy of the free market. Many insurance companies also offer accessory coverage. This type of coverage will pay you for the cost of the accessories up to the limit that you buy.
We know how special your motorcycle is to you. And we know the many things you’ve done to make your ride the perfect ride. So make sure you – and your bike – are covered.
If you want to learn more about accident preparedness, motorcycle insurance or download a Power of Attorney template, download our “Prepared Rider Kit.”