Just like a car, motorcycles depreciate when you ride them off the lot. The initial depreciation can be ten to fifteen percent. If you have been in a wreck and your motorcycle is a total loss, the insurance company owes you the fair market value of the motorcycle at the time of the wreck. They do not owe you what you owe on the motorcycle. To complicate things further, no two motorcycles are exactly alike due to customization and accessories, and determining a value for your motorcycle can be difficult.
There are some steps you can take before a wreck occurs to protect yourself from being in a situation where you owe more on your motorcycle than it is worth. First, when you finance the motorcycle at the dealership or the bank, ask for Gap Insurance. Gap Insurance pays the difference between the value of the motorcycle and what is owed to the lender. For example, if you are in a wreck and your motorcycle is worth $18,000 and you owe $21,000, the Gap Insurance will pay the difference to the lender to pay off the motorcycle. Second, when you insure your motorcycle, purchase collision coverage and ask for a stated value or scheduled value policy. This is a policy where you and the insurance company agree on the value of the bike and that is the amount your insurance company will pay if the bike is a total loss. Make sure to meet with your agent and advise them of any significant changes or modifications to the bike that would increase its value and agree upon a new value. Document your motorcycle’s condition and any custom work with photographs and keep all of your receipts.
Classic, Collector and Show Bikes can be very difficult to value. We strongly encourage you to buy a collision policy with the stated or scheduled value coverage as discussed above. It is crucial that you document the condition and customization of these bikes with pictures and receipts. Many of the classic and collector car insurance companies will insure your bike with a stated or scheduled value policy.
Personal property such as riding gear, leathers, helmets, cell phones, and GPS devices are often damaged in a wreck. The insurance company should pay you for these damaged articles as well. Keep receipts for these items in your motorcycle folder with your other receipts and paperwork.
If we handle your case involving personal injury, we will represent you for free on the motorcycle damage claim and fight to maximize the amount the insurance company pays for your motorcycle. If you were not injured, we will give you free advice and ammunition to use with the insurance company when you negotiate the property damage settlement. Read our rider safety tips for more information on insurance and protecting your property, then contact us if you have any questions.