It’s a quandary new and experienced bikers face on an annual basis, insuring your two wheels of happiness correctly, completely and of course, cost-effectively. Online Motorcycle Magazine looks at the Do’s and Don’ts of motorcycle insurance.

Starting to ride a motorcycle isn’t as easy as simply jumping on and riding off. There’s a lot of work to be done before a biker can feel the wind in their face as they ride down that road to nowhere.

Finding the right motorcycle, deciding on which gear to wear and probably the least exciting point on the to-do checklist, getting the best insurance. But what is the best insurance? What’s a fair price and how much is enough coverage?

These seem to be the most common and recurrent questions asked in motorcycle showrooms across the country as well as on forum boards around the internet. And not just by new riders, but also from seasoned bikers who feel they’re paying too much also pose the question just as frequently.
 
"Rates really vary a lot," says Ben Sheridan, general manager for motorcycle insurance with Progressive Casualty Insurance Co., the top motorcycle insurance underwriter in the U.S. "From one bike to another, they can be five to ten times different."

By way of example, he says a premium of $200 for insuring a small or midsize commuter-type motorcycle can easily balloon to more than $1,000 for a high-horsepower, canyon-racer sport bike.

In this article we’ll cover everything about motorcycle insurance, from what it is to where it can be found. Since the staff of Online Motorcycle Magazine live in the United States, that’s where we’ll focus on, but many of the principles and tips could apply to countries around the world.

What is Insurance?
Insurance is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined by wikipedia as ‘the equitable transfer of the risk of a potential loss, from one entity to another, in exchange for a premium.’ The first policies date back to the Babylonians in 1750BC for merchant’s who took loans to fund shipments. They would pay the lender an additional sum in exchange for a guarantee to cancel the loan should the shipment be stolen.

In today’s world, motorcycle insurance is required in nearly every state (all but nine require riders to carry motorcycle insurance). At the very least, you'll probably need to purchase liability coverage. Generally, the minimum amount or your motorcycle insurance will be equal to the minimum amount of liability coverage for car insurance in your state. However, if you own property or have a high income, you'll probably want to purchase higher than the minimum limits. While it's more likely that you will get injured, or your bike will be damaged in an accident, your liability coverage also protects you from injuries you cause to a pedestrian.

Aside from being legally required as well as offering financial protection, the proper levels of insurance will ensure that your motorcycle you’ve logged thousands of miles on and become emotionally attached to, gets repaired to its former glory in the sad case of a mishap.

Bikers shouldn’t think that they can ride their way out of an accident either as it appears statistics are against them. Studies conducted by the National Safety Council in the U.S. estimates that a motorcycle accident seriously injuring at least one person occurs once every fourteen seconds. Another study by the National Insurance Crime Bureau Statistics reveals that there is an alarming rise in the theft of motor vehicles especially motorcycles. What is more alarming is that only 20-25% of the stolen bikes are ever recovered.

Motorcycles are small and relatively light, some are compact making it easy for the crime of theft to occur. A fire, explosion or flood is all it takes to destroy your dream machine. Simply put a biker would have to be a fool to even think about skipping motorcycle insurance.

Some states also require Uninsured Motorists/Underinsured Motorists coverage to pay for injuries or damage to your bike in an accident with a driver who doesn't have insurance or not enough to cover your expenses.

And then there are the States that have the confusing no-fault insurance laws.

Virtually every state requiring insurance companies to offer no-fault auto insurance either excludes or allows companies to exclude motorcycles from a no-fault policy.
Although this may not seem fair, when viewed from the insurance companies' perspective, it's understandable. It's also directly related to one of the idiosyncrasies of no-fault insurance. No-fault insurance, known in some jurisdictions as Personal Injury Protection, or PIP, essentially turns traditional liability insurance on its head.

At its most basic, no-fault insures you against losses you may suffer in the event you're in a crash regardless of who's at fault. Traditional liability insurance covers the losses you may inflict on another in a crash for which you're at fault and expects you to recover from the other driver when you're not at fault.

Thus, a 20-year-old with no mortgage, no family to support and a minimum-wage job stands to "lose" much less than a 40-year-old with a mortgage, a couple kids in college and a lifestyle supported by a six-figure income. Thus, the kid will generally pay less for a no-fault policy than the 40-something.

This is precisely the opposite of traditional liability insurance, where the kid is considered the higher risk and more likely to be at fault in a crash and be liable for the significantly greater losses the 40-something will suffer.

But because motorcyclists are more often seriously injured or killed in a crash regardless of who's at fault, insurance companies prefer to write the coverage as traditional liability.

Another tricky thing about motorcycle insurance is that it usually applies ONLY to your own bike. This means that if you are riding somebody else's bike, you are not covered by your own insurance. Every state may have its own rules regarding this. Many youngsters also automatically assume that if they are riding the family bike, they will be automatically covered by the motorcycle insurance.