A so-called “classic” motorcycle is generally considered to be one at least 25 years old. If you are one of the lucky riders who can afford to indulge in one of these fine motorcycles from the past, you are going to want to insure it properly. To do that, there are a few things you need to know.
First off, how much is the bike worth? If your beloved classic motorcycle is completely restored or customized, then you’ll want any insurance you buy to reflect that true value. Be aware of two types of insurance: stated value and actual cash value. These two terms are in absolute opposition to one another. Stated value (also called agreed value) is an amount you determine with your insurance agent – these policies will pay off on the value that you and the agent have agreed the bike is worth, if stolen or destroyed. Often, this amount will include custom paint, aftermarket accessories, and even the gear you use for protection, such as helmet and “leathers.” Any thing associated with the classic motorcycle can be insured, of course for a price.
How do you determine what the agreed upon value should be? Insurance companies vary widely on how to arrive at this value. Some, like State Farm Insurance, will require that an appraisal be available from the last 12 months. The owner must supply photos proving that the bike is in mint condition (a classic antique) and that value must be reappraised on a regular basis. State Farm offers liability, comprehensive, and collision, but no medical insurance for the rider. There are strict limitations on the amount the bike can be driven each year (1000 miles only). It’s very difficult to determine exact costs before making your application with any company, but a ballpark figure would be approximately $55 every six months on a 25-year-old Harley Roadster 1000. This figure insures for liability alone; the figure would rise to $177 every six months if you added comprehensive. This figure calls for an annual deductible of $250. You have to prove the value over again with the renewal of your policy.
On the other hand, a policy based on actual cash value will pay off based solely on the book value or depreciation of the bike. If you were to insure an old motorcycle that is not pristine, but simply old, such a policy will cover a very low value. Actual cash value insurance covers only the amount of the value that a bike holds without consideration of any specialized, custom, or extraordinary antique value. Not what you need for a classic bike.
A company like Geico Insurance, while they do cover motorcycles in general, does not cover classic bikes. They refer the customer to another company, American Modern Insurance Group, which has a special department devoted to classics, both autos and motorcycles. AMIG offers three different tiers of miles driven throughout the year. The owner can opt to drive 1000, 3000, or 6000 miles per year; each tier adds $30 or $40 each year to the policy cost, depending on the state.
AMIG insures on agreed value, not depreciation, the theory being that once a motorcycle has reached a certain age, and is in excellent, restored condition, its value will appreciate, or grow, rather than depreciate, or fall in value, over time. They determine value based on the guide from NADA (National Auto Dealer’s Association). American Modern does not require any appraisal, just four-color photos, from the front, rear, and both sides. They determine the value as Fair, Good, Average, and Better-Than-Average, based on these photos.
For the same 1985 Harley Roadster, AMIG’s rate would range from $150-$200 a year, plus the mileage tier you choose. Restrictions include storage in a locked garage when the bike is not being driven, as well as safety features such as motorcycle rider training. There is a limit of $500 on safety equipment like helmets and leathers.
The #1 insurer of all motorcycles in the country, Progressive, insures more Harleys than Harley-Davidson’s own insurance (HOG) covers, offering a more detailed, responsive policy than any other. The driver must be accident-free in the last three years, and he or she must undergo road training. There is no limit on mileage, and trip interruption insurance is included. If you must stop overnight to wait for a part to repair your bike, for example, your hotel is covered to $75. Roadside towing and flat tire repair is included, as are liability, comprehensive, and collision. You can add MedPay, a provision that can be tailored to work with your existing health insurance, to cover co-pay costs.
This policy can be expensive, but worth it if you have what you consider a priceless bike. Appraisal, photos, and perhaps a visit by a company representative determine agreed value. That value is determined at the inception of the policy, not every six months. Be very sure to include custom paint, parts, chrome, bags, riding gear, helmets, and leather in the determination of value, because it’s all covered. That $30,000 Roadster policy comes at a steeper price, $1055 for a year, if paid in full, or an auto-debit payment monthly or as many consecutive monthly auto debit payments as you choose.
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