What Affects Your Motorcycle Insurance Premium And Why!
Many factors are taken into account in order to rate the risk and ascertain the amount of premium to be paid by an individual who is riding on a motorcycle and if you wonder what they are or why they’re used, you’ve come to the right place for answers!
The more risk involved, the higher the premium will be, which is why there are so many factors taken into account in order to calculate just how much an individual will pay for the privilege of cruising the highway on their sweet ride. Ratings are based on actuarial studies taken over long, extended periods of time and frequently re-calculated, based on information that is constantly being updated and fed into an insurer’s system.
Similar to what happens to a young teen who wants to drive a car, as an inexperienced operator the risk will generally be higher than that of an older, more experienced operator of a vehicle. Not guaranteed, because we know there are higher or lower risk drivers in all age groups, but let’s remember, we’re talking about the average person in a large group.
Similarly, when it comes to a motorcycle there are several key rating factors, with premiums being based on those individual items as well as the combination of the items together.
11 Factors Used To Determine A Motorcycle Insurance Premium
Class 6 License
You need a Class 6 license to operate a motorcycle in Alberta, though you can hold a Class 6 Learners permit as long as you ride along with, and under the care and control of, a motorcyclist or vehicle driver who holds a Class 6. Of course, you don’t need a Class 6 to get insurance with BlueCircle, but you will be rated at the lowest level and will remain there until you get that special license classification and start earning history credits.
Duration Of Holding A Class 6
As mentioned above, how long you’ve been licensed to operate a motorcycle makes a huge difference. Just like any vehicle operator, experience counts toward your risk factors, though they do not take into account the complacency factor. The latter reference relates to the same principal which affects professional drivers, such that a vehicle operator who has had their license a long time often becomes complacent and can be susceptible to an accident as a result. Regardless, the best one can attain on a Class 6 is a 6* rating, one * awarded for each year of accident and claims free operation of the bike.
Tickets And Convictions
Yes, this is a big factor in the modern era, as technology has allowed better actuarial studies, with risky behaviour that results in tickets/convictions having a direct correlation to accident frequency. Some insurance companies will not even accept drivers with more than two tickets and, if they do, they charge a premium for each. Likewise for a motorcyclist, as your license history is a factor on whatever vehicle you are operating.
Motorcycle Insurance History
If you have motorcycle insurance, you’ve got motorcycle insurance history, which gives a written and trackable record of what type of rider you are in respect to accidents and claims, not to mention payment issues and cancellations. All insurance history is kept and shared by all insurance companies through a large database, and out of province or governemtn insurers are willing to share yours if you request it, a requirement from pretty much every broker when purchasing insurance in Alberta.
Gaps In Motorcycle Insurance Coverage
A gap in your motorcycle history is a bit of a red flag but may not be a rating factor unless there is multiple gaps or long breaks between insurance terms.
Gap Of More Than 3 Years
A gap of three years, and for some insurers two years, basically will put you back to square one at least for one year. In the case of the latter condition, you basically have to prove that you are low risk and once a year has passed without an accident or claim, all your previous insurance history will factor in to the mix.
Certified Training Course
Being taught the skills of riding a motorcycle by a professional shows a willingness to learn proper riding behaviour, meaning less risk taking and less likelihood for an accident. BlueCircle advocates training to the point where we offer a discount on your premium if you couple your certified training course with obtaining a Class 6. Hey, it’s not a tonne of cash but every dollar saved helps, right?
Type Of Motorcycle
There’s a variety of riders so there’s a variety of bikes, from sport to cruiser to adventure. And, of course, with each lifestyle comes associated risks that are factored into the rating. Dual Sport or Adventure bikes have unique risks related to gravel and dirt, as do super bikes and RR rated versions in the Sport bike class that tend to have higher power. Unfortunately, regardless of what type of rider you may be on a specific bike, those actuarials we’ve mentioned do come into play and everyone gets painted with the same brush.
Value Of Motorcycle
Of course, that 10 year old used bike that cost you $2000 will be far less costly to insure than that brand new CVO Harley or Indian that’s valued at $50,000. One might even go with a liability only policy on the first type of bike, a possiblity with BlueCircle if you have auto and home insurance with us as well. On the flip side, full coverage is the way to go on a brand new and high priced bike and we automatically add SEF 43R for a set term , with options to extend that coverage or even upgrade to Guranteed Replacement Cost coverage.
Engine Size Of Motorcycle
There’s a lot of power in most motorcycles, with the torque to weight ratio making some of them into rockets on wheels. Even smaller c.c. bikes in the 500- 650 cc range have plenty of power so imagine what happens when you get up into the 1000 c.c. range on a lightweight sport bike or 1800+ c.c. on a cruiser. You can see the potential for excessive speed and/or loss of control and that just equates to risk.
Number Of Motorcycles Owned
On the premise that you can only ride one motorcycle at a time, you can get lower rates on each additional motorcycle you own, as long as you’re the only licensed operator in the household.
Other Licensed Riders In Household
As mentioned in the above post, other licensed riders in the household means they could be riding your motorcycle on a regular basis, adding additional risks based on their own license and insurance history and thereby adding more to the premium.
Accessories and Customizations To The Motorcycle
Sure, your bike is worth ‘x’ amount but what about all those extras? That Stage 3 kit, those special saddlebags and the handlebars you swapped out for some ape hangers, or perhaps a special paint job. Regardless, they all add value and will be a factor if there’s an accident or theft. Keep your receipts and tell the insurer or broker about these upgrades, to ensure you’re properly covered for the additional amounts.
Rider Gear And Value Of That Equipment
You’re all geared up and have all your skin properly covered, but what about your insurance policy and it’s limits. Add up all those leathers you wear, plus the boots, the brain bucket, gloves and goggles, and pretty soon you’ve laid out a few G’s! Are you properly insured? BlueCircle offers policies that consider this, with some of our insurers automatically covering some of the basics, others allowing it to be added, and most with option to upgrade to higher levels depending on what type of gear you own. As always, talk to your broker and explain your situation and we’ll do the work to get you covered.
Of course, all of the aforementioned information is used to rate premiums but not every insurer uses each and every one of these in their determinations, and each insurer has rules and guidelines they follow in qualifying a motorcyclist. Some insurers have minimum age restrictions, some have restricted bikes, some have minimum licensing time requirements, and those are only the motorcycle factors. In order to qualify for insurance, factors such as when and with whom the operator has been insured and if there are payment issues, cancellations for non-payment and other such factors may mean that the rider does not meet the standard for that particular company.
One thing that is currently in place and we hope stays this way is the fact that in Alberta a motorcycle is still considered a “pleasure vehicle” and rated as such. Tickets and convictions, as mentioned above, do affect the operator no matter what vehicle we’re talking about but auto accidents, claims and other factors, such as where you live, will not affect your premiums, and vice versa. If everyone plays by the rules and stays safe, this will hopefully not change!
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