Motorcycles share the road with its four-wheeled cousin, the automobile, but they require their own specialized insurance. Chuck and Grant break down the reasons for the unique coverage and what riders should be mindful of when getting their bikes covered.
Below is a transcript of the episode, modified for your reading pleasure. For more information on the topics discussed in the episode, see the links at the bottom of this post.
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Grant FINLEY: Welcome to another edition of Your Insurance Connection Podcast. I'm your host, Grant Finley, and joined once again by Chuck Hembree, the President of CLH Insurance. Chuck, how are you today?
Chuck HEMBREE: Doing well, Grant. Thank you.
FINLEY: Excellent. As you well know, spring is here and the weather's going to start warming up, people are going to be spending more time outside. It's that time of the year when people want to get out and ride their bikes.
HEMBREE: The rites of spring.
FINLEY: Absolutely. I thought, "hey, let's talk about motorcycle insurance." It's one of those things that's more commonly heard of or isn't as obscure as some of the other things we've talked about on this program, but it's something that is important all the same. So, without any further ado, why motorcycle insurance? Why not just auto? Why is there a specific insurance for motorcycles?
HEMBREE: It's not covered underneath your auto policy. So why wouldn't we cover this underneath the auto policy? They're on the streets, they share the streets with us. Well, auto is very specific to those types of cars that have four wheels and if we have less than four wheels, which most motorcycles and some ATVs and some of the new hybrid three-wheel cycles that are out there, they do not qualify for coverage underneath a regular, personal auto policy. So, we have a solution for it and it's called a recreational vehicle policy or some standard companies have come out with their own and they'll call it a motorcycle policy to cover this type of exposure because it is so common and needs its own specific types of coverage.
FINLEY: Well, what are some of those specific types of coverage that motorcycles would need that the regular four-wheel auto wouldn't?
HEMBREE: Well, think about it. If I have my car I can lock up some of my things in it. If I've got my helmet it can be inside. I don't normally wear a helmet when I'm driving the car, but I would if I was in Missouri and I'm driving a motorcycle. So, where do I leave that? Do I take it in with me? You'll see a lot of times it's left right there or maybe hooked or chained to the motorcycle. So that, along with other accessories that come along with motorcycles. We can customize the policy to pick up the accessories and the customization to our vehicles. If we buy a motorcycle and then customize it, that customization is not covered automatically unless we add it to the total cost of that vehicle and we can do that with endorsements to make sure that that customization, whether it's a type of paint or a it's a type of feature, a type of lighting, a type of performance improving accessory, or other accessories like the radios, the headphones, the helmets that connect to sound systems so that you can communicate between the rear guest and the driver. All of those are accessories that usually need to be added on to the policy and we want to make sure are included.
FINLEY: So, are there going to be different variables or levels of coverage for a bike that I'm going to take for a Sunday drive and one that I'm going to race on a track?
HEMBREE: Oh yeah, and if you are getting into racing, then you need more specialized coverage because even your normal motorcycle coverage, just like on an auto policy, is going to exclude any racing activities. Some of them even exclude any type of activity on a racing track or field. So you may not be racing, you may just be involved in it and you might be limiting some of your coverage so you want to watch the language in those policies any time you're on a race track whether you're racing or not because it's usually very limited.
FINLEY: Now say I use the same bike to get to and from work and then on the weekends I race that bike. Can I get one policy that's going to cover both sets of circumstances, or do I need one and one that each will apply whenever I'm doing whatever I'm doing?
HEMBREE: Well, it could happen either way. It depends on the carrier. Some carriers have endorsements that they can add that will cover the racing exposure as opposed to commuting to and from work and pleasure riding and some companies will say, "no, we don't want to do that," so they'll issue a separate policy for that racing exposure.
FINLEY: So then what are the cost variables for this? Risk of exposure makes a lot of sense but is there anything else that -
HEMBREE: Sure, it closely follows what you would think of in an auto policy. You're going to need some of the same types of coverage. You're going to need the minimum state limits that the state requires. Uninsured and under insured motorist, you're going to need all of those different things. Or, if you're like our clients and friends over in Kansas, they're going to need personal injury protection. So they're going to make sure it reflects those types of liability exposures. Then, for the cycle itself, we're going to need physical damage just like we do for a car. Comprehensive coverage to cover vandalism, flood, if it catches on fire and so forth, or collision coverage if we're in a crash. Then, as we talked about, there may be extra coverages and extra costs for customization or accessories. Although, we see that on auto policies too. If you have spinner hubs or special wheels or you've redone the hood with air intake. All of those are customizations that need to be added to the general policy in order to pick it up. For those who don't report it to their agent, when they have the accident they're surprised because we put it back the way that it was from the factory, not with their customization unless they're making us aware of that.
FINLEY: So as I alluded to at the beginning of the show, we're coming into spring which means we're just coming out of winter. Now, would you insure your motorcycle over the winter even though you're probably not driving it? Especially in Missouri, if there's snow on the ground you're not riding it. Is there any relief a person can get there?
HEMBREE: Well, some of our diehards, they do drive right through the winter. It doesn't faze them at all. But you're absolutely right, most enthusiasts are driving in good weather unless they live out or reside in New Mexico, California and our warm states. So there is a policy that is called a layup policy and that way it is a little less costly because you're picking specific months where you're not going to drive and they remove those from the policy. The thing you have to remember then is, because they're not on there, don't drive during those months and if you feel like you have to then you need to contact your agent and make sure that full coverage is reinstated for the time you're driving. But, for most of us who are driving in fair weather, then it provides a good savings as opposed to twelve months when we have three months where the cycle's in the garage.
FINLEY: I think I'm going to go hop on a motorcycle now and ride off into the sunset after that excellent episode we just had.
FINLEY: Unless you have any closing thoughts, I think we can get out of here with that.
HEMBREE: You're a valued employee so please wear your helmet.
FINLEY: Alright, you got it. Thanks to everyone who listened today and we'll catch you on the next episode.
Your Insurance Connection podcast can be heard on iTunes and Stitcher or by visiting clhins.com/content/podcast. If you like what you’ve heard you can support this podcast by rating and/or sharing it on your social platforms. CLH Insurance is a “Trusted Choice”, independent agency servicing Missouri, Kansas and Illinois. For more information on CLH Insurance, visit clhins.com or call 636.391.0700 to speak with an agent. Until we connect again, thanks for listening.
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Show Notes - Where you can learn more about the people and ideas discussed in this episode.