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General Category >> The Cafe >> Motorcycle Insurance Issues - Too Easy to Total
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Message started by Dave on 10/23/18 at 04:38:20

Title: Motorcycle Insurance Issues - Too Easy to Total
Post by Dave on 10/23/18 at 04:38:20

A good friend has a BMW R100GS Paris Dakar bike (1984 I believe), and he was involved in an accident recently. He is an excellent rider/road racer and he and a few other friends were riding on a US Forest Road in Virginia, and the weather was wet and the dirt roads were very slippery and he crashed - he doesn't know exactly what happened but he was traveling about 15mph and his bike slid sideways and slammed him into the side of an embankment. He was hurt too badly to ride out and the Police/EMS all responded. He broke his collar bone and had to be hauled out in an ambulance, his bike had to be picked up on a flatbed truck - but the bike was functional and could be ridden had he not been hurt so badly. (And.....the VA police showed up at the hospital and issued him a citation for reckless operation - and he may need to drive back to VA to attend court!).

The motorcycle had a bent engine guard, turn signal and mirror on the right side, and a broken windshield. He got a few estimates for repair from bike shops and the cost was around $1,500. The insurance adjuster claimed the bike only had a value of $ 2,200, and they would total the bike if he pursued his claim - he could buy his bike back with after the payout with a "salvage" title for around $500.....so he could get his damaged bike and end up with $1,000 in his pocket and a bike with a salvage title that still needed repairs.

The insurance adjuster suggested that he not pursue a claim - that having a salvage title on his bike would forever hurt his bike value, and that since he was able to do the work himself he could likely repair the bike for $500 or less....and be money ahead if he ever decides to sell the bike.

Although this resolution sounds and feels very wrong, it seems to be very common when a motorcycle is damaged - and bikes are very often written off rather than repaired. The insurance companies use the NADA guide for the value, and it often doesn't really reflect the true market value of the motorcycle (unless the bike is a very current bike that is still very new and low mileage and still available as a new bike at the dealer....and the flooded used market is lowering the NADA listed values). The NADA guide for his BMW states the bike has a "GOOD" value of $2,156 - you can't find a similar bike on the market for less than $6,000, and some are asking far more as the Paris Dakar bike is valued by collectors.
https://www.cycletrader.com/listing/1989-BMW-R-100-GS-5004282904

SO - The purpose of this "rant" is to make you aware that the insurance you carry on your motorcycle is not guaranteed to make you "whole" if you have an accident and need to file a claim. It is very likely that carrying any kind of "FULL" coverage that includes repair to your Savage is not likely to get you any useful money. Motorcycles are very expensive to repair, as the cost of "new" parts and the dealer labor can very quickly exceed the value of your motorcycle.....especially on our Savage motorcycles that likely have a very low NADA value - the value of my 2007 is listed at $1,020 low retail and $1,340 average retail.

For my little Ninja and my Savage I don't carry any insurance for the repair of the bikes - I carry the needed liability/medical/uninsured motorist coverage, and if my bike is damaged I am going to have to do the labor and buy the parts to repair it (which is likely to be what happens even if I paid for the collision coverage) - I do carry a stated value comprehensive on those bikes in case they are stolen, and I also include additional coverage for the accessories (helmet, radios, GPS, etc.). I do carry the collision on my 2 year old BMW, as it is likely to be very expensive if it needs repaired.

Here is a link to a business in the Cincinnati area that buys motorcycles from insurance companies - if you look through the inventory you can see how little damage it takes to get a motorcycle totaled....sometimes it is limited to scratches on the bodywork.
http://www.racersedge411.com/

Here is a very long YouTube video that shows a fellow that slides out on his BMW GS and gets bodywork damage and a bent shifter....and the bike is totaled by the insurance company. This bike could be repaired pretty easily and made to be a completely functional bike again - however the dealers have priced the repair with all new parts to replace every piece that was scratched or bent in the accident, and evidently this got really expensive on this bike.
https://www.youtube.com/watch?v=yl-RJi1XZak

OK....rant over. I just wanted to make you all aware that you need to review your policy and what you "expect" it will cover.

Title: Re: Motorcycle Insurance Issues - Too Easy to Tota
Post by ohiomoto on 10/23/18 at 04:48:17

Liability only on my bike. Partly for that very reason. It's not worth much on paper and even if the insurance company did repair it, the deductible would probably cover half the costs. Why would I pay the insurance company extra for that "service"?

Title: Re: Motorcycle Insurance Issues - Too Easy to Tota
Post by verslagen1 on 10/23/18 at 08:04:13

Yes, unless it's new, liability only.
And it can be easily argued what the value of the bike is with the adjuster.
They can search for comparable bikes for sale and establish a value, it just takes some effort.

Title: Re: Motorcycle Insurance Issues - Too Easy to Tota
Post by Dave on 10/23/18 at 10:00:04

7F6C7B7A65686E6C6738090 wrote:

They can search for comparable bikes for sale and establish a value, it just takes some effort.

My friend said he could fight it - but the bottom line for him was that he could likely repair the bike for less than his deductible (or the pain meds just made him unwilling to fight at the time). He was however a bit disappointed that he had been paying for insurance that ended up being pretty worthless in helping him.

Title: Re: Motorcycle Insurance Issues - Too Easy to Tota
Post by ohiomoto on 10/23/18 at 12:21:40

What a bummer. I think you can put a rider of some sort on if you are dealing with the right kind of company. I would ask how the deal with a collector or classic car if I was looking to for full coverage.

Title: Re: Motorcycle Insurance Issues - Too Easy to Tota
Post by Gary_in_NJ on 10/23/18 at 13:33:45

6F54594E5F53484E555D504F3C0 wrote:
He was however a bit disappointed that he had been paying for insurance that ended up being pretty worthless in helping him.

I've never taken out a loan for a new bike, so I've never been faced with having to purchase physical damage insurance. Most of my bikes are $3,000-$5,000 machines that I have for fun, not primary transportation. If one were to get damaged, oh well - sucks for me. Repair, repaint and move on.

With what insurance companies charge for PD coverage, and when you factor in the deductible, you could make almost any repair in just three years of coverage.

Even on my cars, once the value dips below $10k, I cancel PD coverage.

Title: Re: Motorcycle Insurance Issues - Too Easy to Tota
Post by springman on 10/23/18 at 14:56:13

Title: Re: Motorcycle Insurance Issues - Too Easy to Tota
Post by MMRanch on 10/23/18 at 20:15:52

Yep, all I carry is the required liability. Well it does have some additional benefits like paying for hotel if my bike breaks down 75 miles or so from home. I think it covers my gear also. For about $120/year, I'm not complaining.

That sounds good , mine (Geico) only covers towing ($75.oo) and 1 hr labor . But not motel bill ! :-[

I'm paying $225.oo a year on three bikes. Think they call it "Compressive" ?
If I add "un-insured motorist the price doubles … :(

Title: Re: Motorcycle Insurance Issues - Too Easy to Tota
Post by Dave on 10/24/18 at 03:06:03

I have the un-insured motorist coverage, as it is mandatory in our state. 1 out of every 7 drivers in the US does not have any insurance!

Title: Re: Motorcycle Insurance Issues - Too Easy to Tota
Post by justin_o_guy2 on 10/24/18 at 07:42:39

I should go to Vegas.
I'm able to get hit by only one in seven.

Title: Re: Motorcycle Insurance Issues - Too Easy to Tota
Post by stewmills on 10/24/18 at 13:11:50

I have full coverage on both bikes because the difference in liability only is maybe $25/year total. I also have uninsured motorist (assuming it is required in AL since we have so many uninsured). The uninsured motorist piece on both bikes is $87 of my $243 annual premium. That's 36%! Also looks like I have roadside assistance and accessory coverage up to $3000 among the other standard coverage items.

I guess this is fair...I just do what my agent tells me. She's one of the few very solid and logical insurance agents.

Title: Re: Motorcycle Insurance Issues - Too Easy to Tota
Post by LANCER on 10/24/18 at 15:42:33

My wife worked in insurance for over 30 years and when I was about cancel the uninsured motorist portion because of the $ amount for it she said “OH NO, you need that on there even if it is not required by the state”.
Thank you my wife. [ch10084][ch65039]

Title: Re: Motorcycle Insurance Issues - Too Easy to Tota
Post by MMRanch on 10/24/18 at 21:08:41

The medical coverage is the main thing for me. The bikes are cheep compared to any kind of medical needs that might come out of an accident. Even the new bike ain't nothing compared to a hospital bill , unless its a Goldwing or Harley type.
I might not have uninsured motorist on the bikes but I do have good medical coverage on the side. ;)
Tn. requires only Liability Coverage , and if you don't have proof of insurance durning a traffic stop it don't end well .

Title: Re: Motorcycle Insurance Issues - Too Easy to Tota
Post by zipidachimp on 10/28/18 at 20:44:35

Since I rarely pay more than $3000 for a bike, liability only, a loss won't wipe me out, and any bike I do buy will be an easy fix. Salvage title on a bike is a lot less serious than on a car, I'd buy a salvage bike, but never a salvage car. YMMV! Cheers! 8-)

Title: Re: Motorcycle Insurance Issues - Too Easy to Tota
Post by MMRanch on 10/28/18 at 22:19:56

My first truck had a Salvage title , but it was a cheep truck … Datsun 510 for $630.oo out the door. Well , I never knew the difference in titles till much later in life.

I found out my "compressive" coverage is $1,000.oo deductible so I'll drop it on the Savage and drop the deductible on the Guzzi when I re-new it in March.

Without his post , I'd never even looked at it ! ;)

Title: Re: Motorcycle Insurance Issues - Too Easy to Tota
Post by LANCER on 10/29/18 at 08:11:26

I monitor all items on my insurance policies and recheck after any changes are made. I’ve got good insurance but mistakes can happen or a correction doesn’t go through correctly. It is rare for me to find a mistake but it happens.
When I crashed in 2011 the 3 days in ICU, 5 days upstairs in a regular section, along with lab work led to the initial invoice (but not the last) which listed over $47,000 in charges. That did not include the many MRI’s, CT’s and xrays that we’re done, nor did it include the doctors fees. That was just the hospital rooms and care, which I needed greatly.
Medical expense adds up FAST.