1) How much should I insure my motorcycle for?
First off, what they say about “less is more” should go out the window when it comes to insuring your motorcycle! Always make sure that you have enough coverage as it’ll affect the amount you can claim in case of any loss or damage. You can use the market value of your motorcycle as the basis to determine the right sum to insure.
For a new motorcycle, its market value will be the purchase price (or ‘off-road price’), and that’s it! Don’t take into consideration the other miscellaneous costs involved such as the vehicle registration fee, road tax, legal paperwork, stamp duty and handling fees for financing. Those are all part of the ‘on-the-road’ price tag and have nothing to do with the actual cost of the motorcycle.
For example: The premium you'd have to pay would be calculated differently from a car owner's. It'll be based on the sum insured, without considering factors such as rider age, experience or riding record but including exact engine capacity. A motorcycle like the Honda EX5 (insured for RM4,400 in value), will be charged RM292.38 as premium.
As for an older motorcycle model, you can always double-check the value of your ride through various online portals (such as Mudah and Motor Trader) selling the same make and model. From there, you’ll at least have a rough idea of how much is worth paying for the insurance coverage and premium.
2) What’s the difference between a ‘single rider’ and an ‘all riders’ policy?
The names of both are pretty self-explanatory, which is:
- A single rider policy is where only the insured/named person is allowed to ride the motorcycle.
- An all riders policy is where apart from the insured/named person, any other person (who has been authorised first, of course) is allowed to ride the motorcycle.
It’s normal to hear your insurance agent strongly recommend you to take up an all riders policy. And for a good reason too. A motorcycle is the preferred mode of transport for those in the middle and lower-income groups, as well as for those who find it more convenient to travel when the roads are congested. So it’s normal to find unauthorised riders behind the handlebars.
A single rider policy will not pay for damages if it was your neighbour’s cousin’s friend who was riding it at that time. Worse is when the other party who was involved is unable to be compensated as well.
3) How come I pay for the premium, but my insurer doesn't give the claims to me?
You crash your motorcycle and thankfully, you have the necessary insurance. But when you make a claim, your insurer pays it out to the the moneylender (for example: the bank you took your loan from) instead of to you! Sounds like an unfair situation, doesn’t it? Not really.
You see, you need to realise that before any moneylender allows you to take out a loan to purchase your motorcycle, there must be some form of guarantee (also known as a ‘collateral’) to protect their interests. As such, when you get the financing you need for the motorcycle, don’t be surprised if they demand a certain safeguard.
This includes the benefits that may come from your insurance policy, although it is paid for by you. In fact, the moneylender has the right (under the loan agreement) to have their name endorsed in the motorcycle policy as the owner of the motorcycle. So, your moneylender will have the first right to claim compensation from the insurance company for any loss (that isn’t repairable or replaceable)!
It's always better to be safe than sorry
We hope we’ve helped to clear the air on some doubts you may have about purchasing a motorcycle insurance. If you’re a responsible person who prefers to keep his motorcycle to himself, then the single rider policy would be just the right protection for you. However, if you’re in the habit of sharing your two-wheeler with the rest of your family members, then go for the all riders policy to ensure you’re covered against the worst case scenario. It doesn’t hurt to be protected!
Above all, make sure you do your due diligence when it comes to choosing the right insurance company and read all the legal documents thoroughly. You need to know exactly what you’re signing up for so that you don’t have any unpleasant surprises to deal with, on top of the heartache of a loss or damage! So make sure that you're properly insured against anything unexpected, head on over to our handy motorcycle insurance page to get the latest quotes right at your fingertips!