Comprehensive and Collision coverage on your motorcycle will cover the damage to your motorcycle if you are in an accident that is your fault up to the “Fair Market Value,” of your vehicle. It will also cover your vehicle up to Fair Market Value if it is stolen.
Some Comprehensive and Collision coverage’s will cover damage to your motorcycle even if the accident was not your fault.
If the cost of repairing your vehicle exceeds the Fair Markey Value of your vehicle, than the insurance company will consider your motorcycle to be a “total loss,” and only pay you Fair Market Value for your motorcycle.
Now what is Fair Market Value? Fair Market Value is the amount of money that your vehicle is actually worth on the street. Many people confuse this issue. You may have paid $20,000.00 for your motorcycle, and you may owe $15,000.00 on you motorcycle, however, once you drive the motorcycle or vehicle off of the dealers lot, it automatically decreases in value. Although you have paid the above amount for your motorcycle, and you may owe the above amount for your motorcycle, the Fair Market Value of you motorcycle may only be $10,000.00!
Insurance companies value your motorcycle on many factors which include but are not limited to: Year, Make, Model, Mileage, Condition, what identical or similar motorcycles are selling for in your area, etc.
Many times people find out the hard way when their motorcycle is totaled or the repair cost exceed the Fair Market Value of the motorcycle, that the amount you receive from the insurance company is way below the amount owed on the motorcycle. In today’s market where new motorcycle average $19,000.00 or more this situation is not uncommon, especially when the cost of repairing simple fender and paint damage may exceed $5,000.00.
I recommend that you always purchase Comprehensive and Collision Insurance. Without this type of coverage, you will get nothing for your property damage if the accident is your fault, and/or you will be at the mercy of the other drivers insurance company if you are not at fault. Check with your insurance company and read your policy for any limitations of coverage.
By Norman Gregory Fernandez, Esq. , Copyright 2006
