Just What Does Your Motorcycle Insurance Cover? – Part II

Yesterday we talked about Physical Damage Coverage, including comprehensive, collision and custom parts coverage.  Today we’ll expand that discussion to include Loss Settlement.

Loss Settlement
Whether you own a stock Sportster or a complete custom ride, understanding what type of loss settlement is defined in your motorcycle insurance policy is critical.  Loss settlement is how the value of your motorcycle is determined in case your bike is irreparably damaged or stolen and never recovered.  Usually the type of loss settlement in your policy is based on the motorcycle being insured.

There are three types of loss settlement – Actual Cash Value, Agreed Value, and Stated Amount.  Actual cash value uses a third party, like Kelly Blue Book or the N.A.D.A. guides to determine your settlement; this is generally used for mass-produced motorcycles.

Stated Amount settlements are based upon a settlement amount you chose during the insurance quote process.  Settlements are based upon either that amount or a stated value from N.A.D.A. or Kelly Blue Book, whichever is less.  They’ll charge you a deductible too!

If you have a custom or classic motorcycle, and you agreed upon a settlement amount when you bought your policy, then you have Agreed Value coverage; in the event of loss, that is the amount you’ll receive.  In this case there is no deductible.

Knowing the type of Loss Settlement you have can make the difference between replacing your motorcycle or just wishing you could if something happens.  Make sure to identify which type is offered in any policies you consider.  Progressive Insurance offers some great motorcycle policies, and you can start the free quote process through this site.

Ride Hard, Ride Fast.