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Fri, 12 Jul 2013 04:15:00 GMT | By Gordon Powers, MSN Money

Motorcycle insurance costs set to rise

As motorcycle sales across the country continue to grow, the cost of insurance is likely to increase as well.


Gordon Powers, MSN Money

When Saskatchewan Government Insurance, the Crown corporation that governs insurance rates in the province, recently announced it was considering a steep increase to the premiums paid by motorcyclists, the riding community quickly began to fight back.  

Saying it continually loses money on motorcycle insurance, SGI’s proposal would have seen insurance costs for this sector go up by as much as 70 per cent. But anger from riders was so great that the agency agreed to cap the increase and instead study how motorcycle rates are set.

To that end, SGI wants to install telematics devices on the bikes of several hundred motorcyclists, which will record where they drive, how often and at what speed, as well as how well they handle varying road conditions.

Ultimately, such data might be used to determine premiums, although SGI maintains that the pilot program would only be gathering information and wouldn’t have an immediate effect on rates.    

“Usage-based insurance is the ultimate in rating fairness because it essentially lets the driver control their own insurance rate through their driving behaviour,” Donna Harpauer, the minister responsible for SGI maintains. “Simply put, those who drive responsibly pay less and those who don't pay more.”

Notwithstanding these sentiments, SGI is still moving ahead with increases, effective August 1.

Motorcyclists with annual rates greater than $1,000 will be capped at a maximum increase of 15 per cent, while those with annual rates beneath that threshold will face dollar caps ranging from $25 to $150.

This certainly suggests that motorcycle enthusiasts across the country should expect similar pressures on their premiums as well. That means comparing costs, between insurance companies and on different bikes, will become that much more important — particularly for those just entering the market.  

Before you choose what bike you're going to buy, call around to some insurance companies to get an idea of what the costs will be. At the same time, check out a motorcycle club in your area and ask the members what company they use. You might uncover some local brokers that offer motorcyclist-friendly rates.  

It may not seem fair, but statistics show that newer motorcyclists are more prone to crashes than more experienced drivers, thus driving up overall insurance costs.

According to the Traffic Injury Research Foundation, a motorcyclist is four times more likely to be injured in a collision and 14 times more likely to be killed than someone in a car. And, despite the number of older riders on the road, young riders are most at risk.

If you’re a new driver, consider taking a motorcycle training course. As long as it’s an accredited program in your province, most insurers will offer a premium reduction as a result.

In Ontario, for instance, roughly 85 per cent of all newly licensed motorcyclists sign up for the Gearing Up program, a training program offered by the Canada Safety Council.

The more expensive a bike is to repair or replace, the higher your insurance premium will be, since any claim on that motorcycle will cost more than average. Secondly, the frequency of theft for a particular type of bike will affect your coverage costs.

In general, newer bikes and faster bikes merit higher premiums, as they’re targets for thieves and tend to cost more to repair, notes InsuranceHotline.com.

On the other hand, if you already have an older bike, you may want to think about dropping the collision coverage. You have to weigh the savings with the value of your ride and the amount of the deductible.

Motorcycles are easy targets for thieves, especially with the frequency that they are parked for extended periods of time in Canada, InsuranceHotline.com warns.

Ideally, keep your bike inside, in a locked garage. If you can't do this, some insurers may not cover you for theft. If it has to stay outside, use an insurer-approved security device. This may help reduce your premiums. 

The more kilometres you put on your bike the higher your premiums will be. Look for motorcycle insurance quotes that offer discounts for low annual mileage. Since you pay less if you drive less, not getting this right can lead to you paying too much.

To help further with costs, be sure to have a look at seasonal rates which take into account the fact that a motorcycle is usually only used for part of the year.

While coverage is in place for the full 12 months, the premiums are reduced to factor in the winter months when a motorcycle is usually off the road. In most instances, the premium is charged for the months of March through October.

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