• Tips on motorcycle insurance

    Posted on April 4, 2016 by in Insurance tip

    insured your motorcycle with an All riders policy

    MOTORCYCLE loss is one of the biggest concerns to owners as well as insurers. The following will help readers better understand motorcycle insurance policies.

    How much should I insure my motorcycle?

    It is essential that your motorcycle is adequately insured as it will affect the amount you can claim in the event of loss/damage. The sum insured should always be based on the market value of the motorcycle at the time of applying for the insurance policy.

    For a new motorcycle, its market value will be its purchase price. Generally, “on-the-road” price includes cost of the motorcycle with vehicle registration fee, road tax, insurance premium, legal, stamp duty and handling fees for financing, etc. However, only the actual cost of the motorcycle, ie the purchase price directly related to the vehicle, should be used as the basis to determine the sum insured.

    What is the difference between a “single rider” and an “all riders” motorcycle insurance policy?

    A single rider policy allows only the insured or a named person to ride the motorcycle, whereas an all riders policy allows any other person who is authorised by the insured, in addition to the insured, to ride the motorcycle.

    In view of the extended coverage, there is a 50% additional premium to the all riders policy.

    Many a time when an accident occurs, it is invariably someone else other than the insured or named person who is riding the motorcycle. Under such circumstances, a single rider policy will not pay for the loss. Insurers always strongly recommend that their customers take up an all riders policy for their motorcycle insurance.

    Why did my insurer pay my claim to the credit/leasing/hire purchase company when the premium is paid by me (the insured)?

    We need to realise first of all that before any financier extends a loan to buy a motorcycle, he will ensure, among other things, that he has some form of guarantee or collateral to protect his interest. As such when a credit/leasing/hire purchase company, which may also be the motorcycle dealer who sold the motorcycle to the policyholder, grants financing for the motorcycle, it will demand certain financial protection. This includes the benefits that may be derived from the insurance policy, although it is paid for by the policyholder. The credit/leasing/hire purchase company has the right under the financing agreement to have its name endorsed in the motorcycle policy as owner of the motorcycle.

    As such, under the motorcycle policy, the credit/leasing/hire purchase company, as the owner of the motorcycle has first right to compensation by the insurance company for loss (that is not made good by repair, reinstatement or replacement) to the insured motorcycle.

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