Taking the risk... removing 'full coverage' insurance

[zixxer]

I have a bike worth about $8k and owe about $5k on it.

I've been riding 4-5 years and put about 40-50k miles on bikes with (knock on wood) no accidents. My bike has an alarm w/ pager, is parked in a locked garage, and very visible where I park at work. It is also not a commonly stolen bike (triumph 675).

Before buying the bike I priced out insurance, and can afford to pay the insurance. However, I'm wondering if the logical thing is to cancel full coverage. (My bank allows this).

The risk is that if it's stolen or wrecked (totalled) I would be making payments on a motorcycle I no longer owned.

I'm paying a little over $2000 a year with full coverage.. (this is after shopping around a lot..). At this rate, I could buy another bike for what a couple of years of insurance is costing me.

Should I get liability and uninsured motorist only?

 

[ViviTheMage]

oh wow 2k a year...I would just hope for the best, that is expensive insurance....and like you said, in 2-3 years you could buy the bike back.

 

[KLin]

If I was faced with this decision, I wouldn't cancel full coverage.

 

[radioouman]

I doubt that you'll be allowed to.
Your loan probably requires that you have enough insurance to cover the remainder on the loan in case the bike would be totalled.

 

[ViviTheMage]

Originally posted by: radioouman
I doubt that you'll be allowed to.
Your loan probably requires that you have enough insurance to cover the remainder on the loan in case the bike would be totalled.

he said his bank allows it

 

[Lola]

I always tell my customers to ask themselves one thing: can you afford to take care of any damage that should occur without full coverage or could you buy a new bike in the event of a total loss.

 

[MrWizzard]

I would advise against it.

 

[Don Vito Corleone]

Wow - I had no idea motorcycle insurance was nearly that expensive. That really seems outrageous.

 

[Roguestar]

This can only end well.

 

[IeraseU]

I canceled full coverage. I wouldn't say I advise gambling with what you are not prepared to lose, but I am just saying I did it and it saved me a lot of money.

 

[zixxer]

Originally posted by: LolaWiz
I always tell my customers to ask themselves one thing: can you afford to take care of any damage that should occur without full coverage or could you buy a new bike in the event of a total loss.

Well, with motorcycles it's either something too small to make a claim with (i.e. parking lot tipover, which is ~$500-$600 at very most in parts from ebay) or a major wreck.. i.e. totaled. I'm not one of the idiots doing wheelies down the highway or whatever.. but accidents do happen.

In this case, my insurance is outrageous because of the absolute idiots that are my age and ride sportbikes. Also, most sportbikes are at high risk for being stolen.

 

[Dirigible]

I'd probably take that risk, but it's close. Four years of insurance = value of the bike, so you'd have to go quite a while without major issues. Like LolaWiz said, a lot depends on your personal financial situation. If you could absorb the hit with few problems, it's probably a good risk. If having to pay off the bike and buy a new one would really put the squeeze on you, you should probably keep the insurance.

Insurance is usually a bad bet due to the overhead and profit to insurance companies involved, but you protect yourself from major financial hits. Thus, I don't get insurance when it wouldn't be a big problem (I don't have full coverage on my six-year-old car), and do where a loss would be disastrous (my house).

 

[Lola]

Originally posted by: zixxer

Originally posted by: LolaWiz
I always tell my customers to ask themselves one thing: can you afford to take care of any damage that should occur without full coverage or could you buy a new bike in the event of a total loss.

Well, with motorcycles it's either something too small to make a claim with (i.e. parking lot tipover, which is ~$500-$600 at very most in parts from ebay) or a major wreck.. i.e. totaled. I'm not one of the idiots doing wheelies down the highway or whatever.. but accidents do happen.

In this case, my insurance is outrageous because of the absolute idiots that are my age and ride sportbikes. Also, most sportbikes are at high risk for being stolen.

I can see you have thought it through and are being very smart about the whole thing. You are right, unfortunatly. The average per year for a sport bike is right around 2k that i have seen with full coverage for 18-25 year olds.
So, if you are ok with what could happen, i say, save the money by taking the full coverage off.

 

[Viper GTS]

The real question is what does the liability only number look like?

IMO if you want to save the money you should pay off the bike first, then drop the insurance.

Making payments on a bike you totalled (or had stolen) would seriously blow.

Viper GTS

 

[mercanucaribe]

Do you have health insurance?

 

[smack Down]

Most likely you will come out a few grand ahead without full coverage.

 

[dullard]

Originally posted by: Viper GTS
The real question is what does the liability only number look like?

Exactly. If you go from $2000/year to $200/year then it is really worth it. But if you go from $2000/year to $1800/year, you probably shouldn't drop it.

How much do you save by dropping the full coverage, and how frequently do you expect a claim? Answer those two questions, and you'll know if you should drop full coverage or not. No other data is really necessary in the long run (although you can try to confuse the subject with short run examples).

 

[PingSpike]

We need to know the difference of course. As dullard mentioned, it really changes the equation.

 

[mugs]

Originally posted by: dullard

Originally posted by: Viper GTS
The real question is what does the liability only number look like?

Exactly. If you go from $2000/year to $200/year then it is really worth it. But if you go from $2000/year to $1800/year, you probably shouldn't drop it.

How much do you save by dropping the full coverage, and how frequently do you expect a claim? Answer those two questions, and you'll know if you should drop full coverage or not. No other data is really necessary in the long run (although you can try to confuse the subject with short run examples).

:thumbsup:

 

[zixxer]

Originally posted by: Viper GTS
The real question is what does the liability only number look like?

IMO if you want to save the money you should pay off the bike first, then drop the insurance.

Making payments on a bike you totalled (or had stolen) would seriously blow.

Viper GTS

It's around $600 a year if I drop only full coverage (i.e. still have uninsured motorist and liability. I have health insurance that is separate.)

 

[mrizvi66]

i'd do it for 1200 bucks...take the extra money and pay the bike off early.

 

[Tiamat]

thats a tough choice, you would save quite a bit of money, but the bike isnt even half paid for...

 

[OS]

i like full coverage because there are some situations where an accident may not be totally your fault, but the other party's insurance stonewalls you. If you have full coverage, you can always submit a claim on your own insurance, and then let them fight it out with the other party's insurance.

i had an accident several years ago where a semi made a left turn in front of me despite me going straight towards him. The police report initially said it was my fault, that i was going too fast and should have been able to stop. So I had the car claimed against my own ins and paid my deductible. Upon further investigation, my ins co determined that even if i was going say 10 mph faster, I still had right of way, vehicles making left turns through incoming traffic must fully account for how long the entire vehicle will obstruct traffic, and the short skid marks measured at the scene did not show evidence of high speeds.

my ins co later claimed against the other guys ins and got paid back, and I got my deductible back.

 

[Mrfrog840]

wow thats alot


I pay 324 for full coverage on a motorcylce annually

 

[DougK62]

I wouldn't do it on a motorcycle.

I have four cars and they all only have liability. One I'm still paying the bank for.